DSO Entity’s observations on the reform of the Electricity Market Design

On 3 May, DSO Entity submitted its observations on the proposal of the targeted reform of the Electricity Market Design (EMD) to the European Commission as a reply to the “Have your say” consultation.

Together with ENTSO-E, DSO Entity was assigned by the European Commission to develop a Network Code on Demand Response (NCDR) until March 2024 which will be a vital part to achieve this energy transition. Given the close link between the reform of the EMD and the development of a NCDR, in which the technical details to enable flexibility and demand response are developed, DSO Entity would like to emphasize some aspects that are relevant for the EMD from our technical point of view. 

Given the technical nature of the exercise, DSO Entity would like to share some observations on the EMD proposal, especially on the proposals for demand response, flexibility, and metering:

  • Flexibility (Art. 19c of the Electricity Market Regulation 2019/943):
    • The European Commission proposes to assign DSO Entity to develop a methodology to assess flexibility needs together with ENTSO-E by 1 March 2024. 
    • Given the relevance of flexibility, DSO Entity is certainly ready to take up the task in close relation with the work on the NCDR. 
    • DSO Entity will strive to avoid redundancies with the existing provisions of the Electricity Market Directive and the Framework Guidelines on Demand Response.
    • However, we are concerned regarding the extremely tight timeline of less than a year for this important and highly complex task.  

  • Dedicated metering devices (Art.7.b. and Art.2(79) of the Regulation):
    • Originally, it was foreseen that a definition of “submeter”, i.e. “dedicated metering device” and its usage should be developed in the NCDR (Framework Guidelines of ACER in December 2022).
    • Given the introduction of this term now already in the Regulation, DSO Entity strives to integrate the new provisions when developing the NCDR together with ENTSO-E.
    • The current proposal of the European Commission seems feasible since the introduction of a ‘dedicated metering device embedded in an asset’ sets a clear distinction to ‘regulated meters’ which are directly connected to the network, i.e. the public grid connection point.
    • It is pivotal that all meters that are used for billing of energy and/or settlement of a service need to fulfil a certain set for (technical) requirements to be officially accepted by market parties and to secure smooth operation.

  • Anticipatory Investments (Art. 18 (2) in the Regulation):
    • DSO Entity appreciates the emphasis on the need for “anticipatory investments” since more support to enable proactive investments are urgently needed, especially for deploying renewables, empowering consumers and expanding and smartening the grid.
    • Given the magnitude of the investment challenge, even further guidance for NRAs to ensure a stable and reliable regulatory framework with sufficient economic return on investments in the proposal would have been welcome.

Find all DSO Entity’s observations on the Electricity Market Design reform here.