Smart Grids and the role of the DSO A critical part of the framework required to enable decentralised energy and smart grids is to have a system operator at the local distribution level of the electricity network. The development of regional or distribution system operators is, therefore, the area where the most effort is being put in by policy makers and regulators across Europe to enable smart grids. Smart grid technology provides the means to match up supply and demand at a local level. With the development of decentralised generation from wind and solar this flexible approach can reduce the need for network infrastructure to move power around the system and for backup generation capacity. However, to recognise the value of smart grids the electricity system needs to be operated in real time with live data about the actual flows on the network. This is a huge change from the traditional approach. There are two, complementary, strategies being used to drive this shift to regional system operation. One is to plan out ahead the functions of a regional system operator as part of a broader smart grid. The European Union has supported the development of a “Universal Smart Grid Framework” which aims to provide common standards. In the UK the Energy Networks Association Open Networks project is using that framework to develop a common approach for “Distribution System Operators”. The other approach is innovation trials of new approaches to monitoring and managing the network and then using this information to create a market for flexibility to which service providers, such as battery storage operators, can provide services. This more bottom up work is providing the real world experience as to how to operate a smart flexible network in practice. As the diagram below illustrates the transition to DSO is still in the early stages. Changing how we operate critical infrastructure such as the electricity network is a major undertaking. However, for all those involved in smart grids this is a key shift to understand and follow as it will provide the route to market and value streams for smart grid technologies.