Ofgem position paper on Distribution System Operation: our approach and regulatory priorities

Publication date
6th August 2019
Information type
Policy area

We are publishing a position paper on our regulatory priorities and approach to distribution system operation (DSO).

Decarbonisation, decentralisation and digitisation are driving rapid change to the distribution system. To realise the opportunities this presents – including more efficient use of existing assets, new ways for customers to engage with the energy system, and progress towards a low carbon economy – we require more active, coordinated and effective DSO.

We want DSO to deliver four strategic outcomes: clear boundaries and effective conflict mitigation between monopolies and markets, effective competition for balancing and ancillary services, and other markets, neutral tendering of network management and reinforcement requirements, with a level playing field between traditional and alternative solutions and strongly embedded whole electricity system outcomes.

In this paper we set our underpinning approach to DSO, what these strategic outcomes look like and offer energy consumers, and the programme of work to progress DSO policy that delivers these outcomes.

We describe the analysis we have done to date that has informed our work programme, indicate what outputs can be expected from us, and set some expectations on industry to drive progress now. We invite stakeholders to engage with us on our DSO work.

Please provide any views to flexibility@ofgem.gov.uk by 15th October 2019.