DNO to DSO – it’s all in the regulations, say experts

At the recent Current+’s conference, an expert panel discussed the acceleration towards DNO/DSO transition and concluded that incentive, regulations and timing will determine success.

With the latest round of RIIO-2 consultation now closed, and the regulations due to come into effect in early 2023, the transition of DNOs into DSOs is also gathering pace. An expert panel, put together by Current+  for its latest conference, included representatives from the likes of the Energy Networks Association, Citizens Advice, Northern Powergrid and global engineering consultants WSP.

The general consensus was that, while the transition was gathering pace, RIIO-2 would have a significant impact on the speed and decision-making by the DNOs, particularly in relation to the incentives and price controls. In addition, it was pointed out that there was no single solution for how transition would be made, given that each DNO faces unique challenges in their regional areas. 

Head of Policy Development at Northern Powergrid, Jim Cardwell, was reported as stating that price controls set by RIIO-2 would have “a massive bearing on what we as DNOs do”, but acknowledged that these controls were positive in focusing DNOs on ensuring absolute clarity on what they want to achieve and how that should be incentivised.

For Citizens Advice Head of Energy Networks, Stew Horne, it was about ensuring price controls were flexible and responsive, both to the needs of the DNOs an consumers. Overall, it was felt that the regulations were moving in the right direction in terms of guiding the course of transition and having a positive influence of the culture of the DNOs themselves. 

However, there was a warning from Anna Ferguson, Power Systems Director at WSP, that whilst the regulations were positive in driving behaviours, there was a limited amount of time for Ofgem to “get that right and provide the right leadership.”