Microgrids and National Regulatory Authorities in the EU: An Empirical Analysis

Microgrids are decentralised electricity systems that offer a local approach to the energy transition. They help to bring electricity generation closer to the consumer, facilitate the integration of renewable energy, and increase energy security. However, the implementation of microgrids currently requires regulatory exemptions as they do not fit into the existing regulatory framework. Therefore, regulatory reforms are needed. Those reforms are influenced by National Regulatory Authorities (NRAs). Although NRAs are supposed to make technical decisions, their choices have political implications for microgrid development by creating a technically (un)favourable environment. This article explores the narrative of NRAs in facilitating the development of microgrids as part of the transition towards a more sustainable energy mix. An exploratory multi-method study is applied, combining surveys and interviews with representatives from different NRAs in the EU. The article finds that despite the potential benefits of microgrids, NRAs are generally unsupportive of microgrid development. Alternative models, such as closed distribution systems and energy communities, have been proposed instead. Furthermore, the interviews reveal that the perceived costs of developing microgrids outweigh the benefits when considering the functioning of the overall electricity grid.