Distributed generation, increasing electrification of the economy, and rising flexibility needs are pushing DSOs into unfamiliar territory. Digitalization can be a tool in facilitating this evolving and demanding role – but what does it mean in practice?
We spoke with Alberto Sánchez Pérez, Co‑Founder and CEO of Gridfy and a member of GEODE — a European association representing distribution system operators. He shared his views on the issues highlighted in a new industry report on DSO digitalization and how grid operators are navigating their digital transformation.
We have been talking about digitalization for something like 10 years. Many DSOs talk about digitalization, but very few can clearly explain which decisions it is improving. We are working with 15 customers, DSOs, and we find that every DSO has a different vision of digitalization. They also can have different understandings of the value of digitalization and how it can support different decisions.
We try to educate the DSOs about digitalization and organize it into five levels. The first level is the sensors in the field and organizing how the devices support data collection and provide that to the DSO. The second is to organize greater visualization of the data, but only in a monitoring way – to provide visibility. And the third level is to provide the data in a way that delivers confidence about the behavior of the grid.
The next step is the analysis in terms of how the monitoring allows decisions to be made in the short term – to improve the O&M, and planning. And finally – and this is a long journey from after taking that first step – is how to get intelligence on the grid, using different technologies like AI to make decisions for a better tomorrow. This final step will allow DSOs to improve development plans and operation.
These five levels are the ideal pathway for the digitalization for a DSO. If we can start working on the first level, it can take five to six years to arrive at the final level. However, reaching higher levels is not just about technology maturity. It’s about whether the DSO can trust the data enough to base investment decisions on it.
That said, DSOs do not need to wait for the final level to capture value. Significant benefits can already be achieved much earlier if digitalization is focused on concrete operational and planning decisions.
One of the weaknesses I have seen at all DSOs is the personnel. Often, the teams are very focused on electrical engineering, but with digitalization we are not talking about electrical engineering. Instead, we are talking about communication, data processing, information infrastructure, and cloud technologies. So, the DSO needs to impart in its teams different capabilities and skills within their organization. Different teams within a DSO also need to be brought together.
One important message, and I always say this at conferences or in conversations, is that there is a lot of innovation, a lot of solutions, with very good technology that can be applied. I try to convey to DSOs that if we can establish a proof-of-concept with a start-up or company, then we can accelerate some of these processes.
The technology nowadays can solve almost every problem that a DSO has. But the barrier can be the staff, the engagement of the people, to build confidence within these teams to use the technology to help them make decisions.
The other challenge, I imagine, is just the rate of change. DSOs are facing a rapidly changing world in energy – where before there was generation, distribution, and loads. Today, there is a mix of generation throughout the network, intermittent generation, energy storage, and increasing demand.
It is more of a chaotic world for DSOs.
DSOs are in a big, chaotic world and are facing challenges with congestion, voltage issues, and the uncertainty of how distributed energy resources (DERs) are growing. And I think the big challenge there is the visibility, and more of a focus on the low-voltage grids.
I have heard it said that on the low-voltage grid, the DSOs are firefighters – if something happens, they will solve it, but in a reactive way. But that can change if they get more visibility into the low voltage grid.
We have aging assets in our grid, so we are working on how we can improve the life of the assets. And we’re exploring how visibility can allow us to improve investment decisions to prolong the life of that asset.
For example, how best to change or replace a transformer in a certain area, because the DERs are increasing and the behavior of the grid is changing. Digitalization can help a DSO to get that information in the right way and to allow it to do a different type of analysis.
Digitalization allows DSOs to prioritise investments based on real network behaviour, rather than historical assumptions, which is increasingly important under new regulatory frameworks.
DSOs can access Horizon Europe, the Connecting Europe Facility, and national Recovery and Resilience Plans, which support digitalization, grid modernization, and flexibility solutions. These instruments reduce financial risk and enable DSOs to pilot innovative technologies before large-scale deployment.
In many cases, regulation is becoming a driver, even if indirectly. Some countries now require detailed reporting that is simply not possible without digital tools. At the European level, there is also a strong push towards common data standards and new regulatory models that recognise software and digital services as legitimate grid investments.
However, regulation alone cannot force cultural change. DSOs still need internal commitment and a willingness to experiment with new approaches.
The GEODE report, Digitalisation of Distribution Grid Operation is available for download here .