FEATURE - CEER Paper on Dynamic Regulation to Enable Digitalisation of the Energy System
For the period 2019-2021, CEER’s main focus as set out in CEER’s 3D Strategy is on:
• Digitalisation in the consumer interest
• Decarbonisation at least cost
• Dynamic regulation: European solutions for adaptive regulation in a fast-changing world
CEER’s newly released Digitalisation Paper is a perfect illustration of regulators’ efforts to deliver on the digitalisation agenda of CEER’s 3D Strategy.
What’s in CEER’s Digitalistion Paper?
The CEER Digitalisation Paper:
• explores what digitalisation means for consumers and the role of the regulator in stimulating change in a positive way for the consumer
• identifies the risks and challenges of digitalisation; the core elements of a sustainable regulatory strategy on digitalisation in the energy sector; and the priority areas where regulators and DSOs can add most value
• recommends actions to unlock the benefits of digitalisation for consumers
Where’s the benefit of digitalisation for consumers?
In CEER’s view, digitalisation is not an objective in itself but rather is a means to deliver benefits for the energy system and ultimately for energy consumers.
Digitalisation of the energy system drives change and creates value propositions for consumers. In terms of the system changes, CEER identified that digitalisation:
• increases the productivity of the current energy system;
• enables new services that alter energy demand; and
• brings new platforms and market places that transform the sector.
The potential benefits that digitalisation can bring to consumers include:
• cost savings;
• consumer participation; and
• quality and security of supply.
What is CEER’s proposed regulatory strategy for energy digitalisation in the consumer interest?
The CEER Digitalisation Paper sets out a pathway to get the best out of digitalisation in the consumer interest. Six elements lie at the heart of CEER’s regulatory strategy for energy digitalisation in the consumer interest:
1. Giving the right price-signals: Generation, consumption and network data needs to be given a clear market value to incentivise prosumers and their intermediaries to profit from using the data to optimise their behaviour.
2. Encouraging Distribution System Operators (DSOs) to use flexibility: A great deal of the value in data comes from DSOs making efficient use of the information to increase the system efficiency.
3. Empowering consumers: Digitalisation needs to be used to empower consumers to ensure that they can benefit from increased digitalisation of the energy sector.
4. Generating the right sort of data: Appropriately granular data on the electricity system is needed, data which is beneficial for managing the whole system.
5. Making data accessible and useful: Data needs to be collated and made available not only to network operators but also to current and potential market participants:
a. Accessible and interoperable data for current and potential market participants, subject to appropriate cost-benefit analysis.
b. Data needs to be secure, in line with cybersecurity and data protection requirements.
6. Allowing innovation: For consumers to benefit from innovation and digitalisation, regulators and DSOs need to be adaptable and respond to developments in markets.
Recommendations in CEER’s Digitalisation Paper
To fulfil these core elements, CEER identified seven recommendations for regulators, DSOs and others:
1. Ensuring data protection
2. Strengthening cybersecurity
3. Monitoring market evolution
4. Designing the right grid service products
5. Deepening TSO/DSO relationships
6. Empowering consumers through new products
7. Regulating intermediaries
This “CEER Conclusions Paper on Dynamic Regulation to Enable Digitalisation of the Energy System" is the result of a public consultation.
Linking to the digitalisation theme, CEER also recently published case studies on technology aspects of the Clean Energy Package (2019) and in 2018 a Smart Technology Development report.
The latter identifies five technologies that are changing the traditional role of the customer and how they interact with retail energy markets. Digitalisation of the energy sector will remain a pillar of our work in 2020 and 2021.