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13 November 2015

The TSO-DSO interface: what are the opportunities and challenges?

Traditionally, there has been a clear distinction between the roles performed by Distribution System Operators (DSOs) and Transmission System Operators (TSOs):

  • DSOs connected new loads and ensured that the distribution network was reinforced and maintained to be able to deliver power to consumers all year round
  • TSOs connected the generators needed to supply those consumers with power, and managed the real-time flows on the network

In truth, this clear delineation has never quite existed, but the caricature helps to illustrate some of the emerging challenges that sit at the TSO-DSO interface. Even before DSOs start becoming truly “active”, the increasing levels of Distributed Generation (DG) introduces a number of challenges:

  • The TSO needs to anticipate future demand growth, which is made more difficult by DG offsetting that demand, especially when a lot of it is hidden behind customer meters, as is the case with rooftop solar.
  • It may be cheap and quick for a DSO to accommodate a new generator, particularly where there is sufficient local demand to consume that generation. However, if generation on the associated section of the transmission network exceeds demand, this additional DG can trigger either transmission reinforcement or the curtailment of transmission-connected generation. A process has been implemented requiring DSOs to inform the TSO if large DG connections are expected to cause such issues.
  • On operational timescales, the TSO needs to balance the system, which requires forecasting minute–by-minute changes in net demand. The problem is that some DG is both unpredictable and invisible to the TSO (rooftop solar is a real concern for TSOs), making this balancing more difficult and more costly.

As DSOs take on more of an active role, more potential issues arise. Active Network Management (ANM) allows more DG onto a given network, exacerbating all the problems identified above. More than this, though, the rapid and autonomous behaviour of ANM can undermine balancing actions taken by the TSO. Some of the issues can be resolved through greater information sharing between DSOs and TSOs. Others may require protocols defining which parties can take which actions under what conditions.

It does seem as though the current trajectory creates more problems than opportunities for the TSO, but there is a potential upside. If the technology and processes can be sufficiently harmonised, the TSO could gain access, either directly or through aggregators, to a large number of small generators and flexible consumers able to provide balancing services at lower cost than the current market participants. That said, if a fully active DSO role does emerge, the TSO may have to compete to secure those new players’ services.

The emergence of an active DSO role could result in profound changes to the interactions between the TSO and DSO, and the way in which the whole electricity system is balanced. The extent to which this presents an opportunity or a challenge to the network operators will depend on the decisions made in relation to:

  • market design
  • regulations, and
  • technologies.

We cover each of these in the remainder of this blog series.