Balancing public values during the energy transition – How can German and Dutch DSOs safeguard sustainability?

Abstract

Distribution of electricity constitutes an essential link in the energy sector value chain for which Distribution System Operators (DSOs) bear the responsibility. While executing that role, DSOs are expected to take into consideration public values, such as the availability, affordability and sustainability of the infrastructure they manage. The energy transition causes DSOs to deal with increasingly unpredictable flows of locally generated renewable energy, requiring the use of, for instance, electricity storage or demand response, options current legislation insufficiently provides. This paper uses legal-empirical research (interviews and surveys) to demonstrate that German and Dutch DSOs increasingly struggle with the limited consideration they can give sustainability during the transition towards a smart and renewables-based energy system. DSOs experience an imbalance within the energy public value triangle. Unbalanced public values, as perceived by DSOs, are a symptom of the mismatch between the DSOs’ daily practice, shaped by the challenges of the energy transition, and existing legislation. This paper compares European, German, and Dutch (forthcoming) legislation intended to further the energy transition, and analyses the pros and cons of the various approaches in terms of their impact on the DSOs’ challenges. On that basis, legislative changes are recommended to clarify the role of DSOs, reduce public value tensions for DSOs, and support DSOs in a more balanced overall response to the energy transition.

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