The stage is set for Distribution System Operators (DSOs) to deliver the energy transition. But to do so, they need to take drastic action.

As our latest Digitally Enabled Grid report proved, the energy transition is causing massive disruption. And nobody is feeling that more than network operators.

Industries, governments and consumers are all looking to their utilities to develop new methods to maintain and manage the changing network; an expectation that can be an inspiration or a concern.

But with uncertainty about the impact of decentralized Distributed Generation (DG), electric vehicles (EVs), widespread electrification and changing weather, taking charge is no simple ask.

So, what can DSOs do to meet the demands of the energy transition?

Master new skills

To find a way forward, DSOs will look to enhance their current capabilities, but also to master new ones.

It’s a fine balance that means integrating the actions of new influences like prosumers, DG, and aggregators with traditional actors - Transmission System Operators (TSO), consumers, and retailers.

With pressure growing that’s easier said than done, but there are actions that can kickstart the process:

  1. Increase grid visibility and control by making existing capabilities - like asset management, grid, and field operations capabilities - more effective.
  2. Develop the capabilities needed to benefit from developments like flexibility management, weather events management and consumer profiling.
  3. Adopt technology (AI, IoT, Digital Twin, XR) that boosts current capabilities and speeds up the move to becoming a data-driven business.

As the transition accelerates, DSOs will be expected to cope with bigger changes even more quickly – while lowering emissions and staying profitable.

Weaving sustainability and technology into an organization’s DNA can empower them with the tools, tactics and techniques needed to play a leading role.

Build a platform for progress

Mastering a growing set of capabilities means combining applications, infrastructure, communication, and security elements that together release the business benefits of the DSO approach.

It means building the DSO Platform of the Future: the applications and infrastructure needed to address immediate and incoming challenges.

But why take on the added complexity now?

This approach sets the scene for DSOs to evolve beyond current regulations and positions them to create new services and solutions in collaboration with a wide ecosystem of partners.

It’s a move that secures the future.

Take charging: A new role

The energy transition won’t end. It’s an exercise in evolving efficiency.

That’s why, to succeed, the transformation must extend beyond known technical challenges and create a way of working that is consistently refined.

Building this mindset into a business model calls for a phased approach.

Internally, DSOs may benefit from a full change management approach. It’s more important than ever to empower employees; to excel in their jobs, and so that they can pursue their personal and professional goals and help to build the business of the future.

Putting people first will help you to hold onto your current talent, and to attract any new hires you may need to develop different offerings.

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This focus on people is also needed for external relationships. With regulations and investment trends changing all the time it’s important to work closely with regulators and stakeholders.

Taking a collaborative approach allows everyone to set realistic targets and realise the benefits that come with creating 360° value.

A 4-point action plan

DSOs are set for a dynamic future. Delivering what’s expected will challenge them to master new capabilities and enrich their offering so that they are able to guide regulators, industries, and consumers to a net zero reality.

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Stepping into the spotlight is an opportunity not without risk, but there are clear actions that can empower DSOs to take charge of the change ahead:

  • Collaborate with regulators to evolve the regulatory model and become the engine driving innovation
  • Embrace open innovation from the entire ecosystem (partners, customers, VC/PE accelerator, start-ups, universities, etc.)
  • Accelerate digital transformation by taking the opportunities that technology presents
  • Redefine the employee experience by re-skilling your teams.

Contact me to discuss the best way to build a platform for progress.

Gregorio Ogliaro

Managing Director – Strategy & Consulting, Utilities, Transmission and Distribution Global Lead

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