Electricity distribution networks form a critical part of local energy systems with distribution system operators (DSOs) charged with ensuring reliable electricity supply, which is delivered in a safe and secure way. Following the Covid-19 crisis, DSOs are again under increased financial stress as they face high electricity purchase costs without the possibility of their recovery though network tariffs. In a position paper published today, Energy Community electricity DSOs call on national regulatory authorities to amend the rules and procedures for distribution tariff setting in order to ensure they can react adequately to rapidly changing developments on the electricity market.
When it comes to purchasing electricity for covering network losses, the majority of DSOs are exposed to market prices. However, the unprecedented increase of the costs of purchased electricity cannot be passed through to consumers in an expedient and timely manner, partly because tariff methodologies and procedures are not flexible enough to react adequately to the new reality, but also due to the social elements present in the electricity tariffs. The delay in the recognition of the actual costs of losses in the network tariffs has caused a severe liquidity crisis and could endanger DSOs’ ability to provide reliable and continuous supply of electricity to customers.
Read the position paper for the complete list of recommendations.
The position paper is based on research conducted by the Coordination Group of the Energy Community Distribution System Operators in Electricity (ECDSO-E) - Task Force for Network Tariffs. ECDSO-E is a platform dedicated to discussing issues pertinent to DSO operation and developing common views and guidance documents and issuing recommendations for implementation.