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Policy Brief / Energy

Thoughts on an Electricity System and Grid Paradigm Shift in Response to the EU Energy Transition and the Clean Energy Package

Author(s): LAVOINE, Olivier

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ABSTRACT

The EU Clean Energy Package aims to facilitate the transition to a low-carbon energy system based largely on renewable energy sources while furthering the completion of the internal energy market. The achievement of such “double goal” implies a profound paradigm shift in the way the electricity system is developed and operated. 

The growth of distributed energy resources, on both the generation and demand side, cannot be neglected anymore. On the contrary, such resources connected to the distribution grids must be fully integrated and subject to grid codes that ensure a level playing field.

The operation of transmission and distribution grids must change and adapt to the new dynamics introduced by the growth of distributed energy resources. Transmission and distribution system operators must develop new coordination mechanisms to ensure efficient balancing and preserve the security and continuity of electricity supply. Such coordination must not stop to real-time system operation but extend to grid planning and expansion.

More sophisticated network tariffs and new market players enabled by digital technologies are crucial to improve the active management of demand and simplify the balancing of the system. 

These significant changes in system and market operation and in system development question the share of tasks and responsibilities between the different system levels (local, regional, national, European). In this respect, the creation of multinational control areas operated by actors that go beyond the remit of the single national companies has the potential to simplify the coordination challenge and improve market functioning.