Integrating demand side management into EU electricity distribution system operation: A Dutch example

The EU goals for renewable electricity cause significant changes of electrical loads in distribution systems, in which most renewable electricity sources are integrated. This poses a challenge for distribution system operators (DSOs) as their networks are not designed for such load changes. DSOs could use networks more efficiently with demand side management (DSM), where consumers of electricity alter their consumption patterns, shifting (production/consumption) loads in the distribution system. In such a setting, consumers would trade DSM services with the DSOs. However, currently, DSOs follow the ‘copper plate approach’, which assumes the system should have sufficient capacity to ensure that the desired volumes of electricity can be transported. This seeks to guarantee regulated third party access (rTPA) for all system users. Next to rTPA, based on regulated tasks, DSOs should ensure secure, reliable and efficient systems. In doing so, the DSOs are bound by unbundling requirements, which do not allow them to be involved in any activities other than those related to distribution. Therefore, especially production and supply are not allowed. Still, it seems debatable whether EU law allows DSOs to apply DSM, as it has an impact on both the access conditions to the electricity system, and the production, supply and trade of electricity. This article further analyses how DSM relates to the legal framework of DSOs, which obstacles are present, and how DSM could be traded between DSOs and system users.