Cooperation is a must for TSOs & DSOs!
Chris Peeters, CEO of ELIA group, and keynote speaker during European Utility Week discusses his views on the cooperation between Transmission System Operators (TSOs) and Distribution System Operators (DSOs) and the role of the TSO in a changing market, as well as the future plans of the ELIA group.
With more than 30 million end users in Belgium and Germany, 2,343 employees and about 18,600 high voltage lines, the ELIA group can rightfully claim a spot among the top five largest TSOs in Europe. The ELIA group aspires to be a catalyst for a successful energy transition, which will in turn, lead to a reliable, sustainable and affordable energy system. Because after all, as the ELIA group “manifesto” highlights, the power grid is a key pillar of the energy policy that supports our socio-economic prosperity.
- The “Clean Energy for All Europeans” initiative and measures’ package of the European Commission encourages cross-border collaboration. Since ELIA’s acquisition of an additional 20% stake in the German TSO 50Hertz that was completed in April, what plans have been put in place to encourage a stable, more competitive, and more sustainable energy sector?
The acquisition is fairly recent, but we have launched a programme to see how the coming together of our two companies can reinforce the execution of our strategy. And our strategy is focusing on facilitating the energy transition. There are a number of dimensions that are critical for society, and we are aiming to deliver the required solutions on time.
For example, if we look at the importance of the reconfiguration of infrastructure, we can see that there is a societal expectation that this infrastructure will be delivered as soon as possible in countries like Germany. However, in reality it is a very complex thing to do, given the fact that one needs to build new infrastructure in an environment where new pylons may not be welcome. What we really focus on here is the use of best practice techniques to deliver on time, as far as this is possible.
On the other hand, for a country like Belgium, the important thing is collaborating with neighbouring countries. So, ELIA will deliver two interconnection projects. NemoLink® will be commissioned early next year to connect us with the UK, and AleGRO at the end of 2020 and to connect us with Germany.
We have also launched a project among a number of European TSOs, which focuses on how we can update the market design of the energy system in order to cope with a world with more renewables. This is an ELIA group initiative, which argues that it will be hard to maintain the market design in its current format due to the increase in renewables.
- Do you believe that TSOs and DSOs also need to collaborate in order to achieve a clean energy transition? If so, what do you think needs to change in order to make this happen?
Yes, and collaboration is happening already. What we see is that the roles are shifting. TSOs continue to be the ones that have the responsibility to keep the lights on - they are still responsible for balancing the system and so on. But, and this is something already visible now and that will become more so in the future, DSOs will need to take a number of functions under their responsibility, such as managing congestions and enhancing the management of voltages in their grids.
This is something new to them, because so far and for as long as we have only had one-directional flows, they haven’t had to take on these functions. DSOs were not confronted with the same issues as the TSOs. But as the system is transforming, DSOs will start experiencing these issues. Therefore DSOs and TSOs have to synchronise their efforts, and TSOs need to share their knowledge with the DSOs. ELIA is trying to do this by leveraging on the collaboration platforms that we have. For instance, in Belgium we have built a joint data platform to share information and enable access to data in order to encourage market flexibility.
Dominique Ristori and Roberto Viola penned an article arguing that digitalisation is going to enable us to operate a complex grid. Do you agree?
Yes, I agree. However, the thing is that we are still on the verge of understanding how that will happen. The electricity system is a complex one because we need to guarantee a permanent balance between supply and demand. This necessity provides a reason to keep at least some centralised functions.
But if one goes from a couple of hundred to a couple of million injection points, can you still have all the calculation and communication capacity in a centralised entity? That seems unlikely. So, I think we will end up with a combination, on the one hand a more central view about how to ensure the system security, and on the other hand, we are still going to have local tasks and teams that can ensure that local problems can be solved on the spot.
- BEUC (the European Consumer Organisation) was saying during the EU Sustainable Energy Week that the consumer should be at the centre of the energy transformation. Do you think that we need to give the consumer more control or more services?
I believe that both go hand in hand. In the end, the control that the consumer is interested in is the one that can guarantee the comfort level that they want to enjoy at the lowest possible price. And the ‘service layer’ is actually the translation between these two things.
So, as far as I am concerned, ‘the consumer at the centre’ is not the person that spends half of their evenings optimising their energy consumption. Instead, ‘the consumer at the centre’ is the one that expects the utilities to deliver a system that understands and optimises their energy consumption, and that helps them use the system to resell their excess capacity. And that brings the consumer at centre, in the sense that today they have no incentive to ‘play the game’ in the system, but in the future they will get incentives and benefits from giving their flexibility back to the system.
In order to achieve that, one needs service companies and specific applications. TSOs will never be service companies because they are not in the energy and flexibility business, they are in the infrastructure and market facilitation business. Therefore, TSOs need to ensure that the system is capable of supporting these kinds of service providers.
- What do you think needs to change within the sector to be able to attract more young engineers (talents) to work for a TSO, instead of being lured by the likes of Google, Facebook, etc.?
Actually, the energy transition will still provide work for at least a generation. So, we can provide jobs for at least another generation. Therefore, attracting the right talent is critical for us as a sector.
Firstly, it is a matter of communication. I believe that we need to better explain the interesting challenges in the sector, as well as the fact that we have very interesting job offers for them.
Secondly, as a sector we need to accelerate bringing in the solutions for a number of those challenges of the future. For instance, if we take the digitalisation of the sector, we can safely assume that it is at an early stage. Today, smart meters exist, but the applications that facilitate mass adoption are not there yet.
So, what we need to do, is inform young talents that there is a lot of room to grow in our business. And secondly, that they can be part of something that is still in its early stages and that will evolve, similar to the early years of the Internet revolution.
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