The ongoing energy transition—through large-scale electrification, decentralised power generation and new flow patterns—poses a challenge for network companies at all levels, including regional and local distribution networks. In both Norway and the EU, the regulation of operational coordination and cooperation between TSOs and DSOs is being reviewed. We analysed the benefits of developing new tools for cooperation and changing the division of operational responsibilities between Statnett and Norway’s regional network companies.
The analysis is based on those challenges affecting the network companies today that are expected to grow. There are four areas where the network companies experience concrete challenges and their roles are regulated: the coordination of outages, establishing system diagrams, voltage regulation and congestion management.
Existing examples demonstrate the importance of coordination in avoiding excessive costs and connection delays. In the analysis you can, among other examples, read about how Arva avoided investments amounting to 200 million NOK by using operational measures and thermal upgrades. We also discuss how Agder Energi reduced the annual costs of electrical losses by 1–2 million NOK through voltage upgrades. In both cases, these achievements required cooperation with both Statnett and the affected network customers. However, several of the network companies that we talked to highlighted the challenges posed by the lack of a formalised process for cooperation with Statnett.
We find that many of the challenges that network companies are facing today could be solved by making use of the room for manoeuvre available in the system operation regulation, including the European System Operation Guidelines (SO GL) that came into force on August 1st, 2021. Additional benefits could be realised by introducing new regulations and standardised processes to enable cooperation between Statnett and the network companies, provided that systems for the exchange of information are put in place.
Ongoing changes in the industry will also be important enablers for regional network companies to take a more active role in the operational management of their networks. These changes cover everything from digitalisation to the formal clarification of responsibilities. In the long term, changes to the division of responsibilities between the actors could also be considered.