recommendations on the role of dsos in the european union’s … · 2020-06-26 · developing...

Recommendations on the Role of DSOs in the European Union’s Recovery Plan and the

Acceleration of the Green Deal Agenda

In cooperation with

Recommendations on the Role of DSOs in the European Union’s Recovery Plan and the Acceleration of the Green Deal Agenda

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Contents

1. Context and objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 1

2. Storage and fl exibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 3

3. Electric mobility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 7

4. Equipment, components, services and capabilities sourcing . . . . . . . . . . . . pg. 11

5. IT, data and cybersecurity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . pg. 15

6. Way to move forward and potential short-term measures to gain traction . . pg. 18


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1

Context and objective

The purpose of this document is to articulate how Europe’s distribution system operators (DSOs)

could contribute to the European Union’s recovery plan. It focuses on a set of recommendations

that could accelerate the development of a more sustainable, effi cient and resilient energy system in

Europe following the Covid-19 crisis to stimulate Europe’s economies and contribute to the EU’s

Green Deal agenda.

This document has been commissioned by E.DSO, based on a set of interviews conducted with

members of the E.DSO Executive Committee.

It is important to acknowledge that the energy system has demonstrated its resiliency during the

Covid-19 crisis. Business continuity has been ensured for all stakeholders, including security of

supply, functioning of market mechanisms and the interface between suppliers and customers, as

well as the safety of internal employees, service providers and suppliers.

Moving forward, a sustainable, safe and competitive energy supply will continue to be critical to

improve the competitiveness of Europe’s economies. With more than 350 million citizens served,

27 billion euros of investment per year and 7 million kilometers of distribution lines representing

35% of the value chain of the electricity sector, DSOs can play a critical role in delivering on this

ambition by:

• Addressing customers’ evolving needs related to decentralized generation, demand management

and energy savings information

• Continuing to digitalize the network, particularly through smart meters and other smart grid

technologies

• Supporting sector integration with renewables, electric vehicles (EVs) and other evolving options,

as well as with more disruptive technologies such as hydrogen

• Maintaining high reliability and quality of supply by balancing electricity loads on networks, all

while supporting fl exibility and preserving affordability

These activities can and should be achieved while continuing to partner with stakeholders across the

energy ecosystem and raise performance standards along the energy value chain.

The Covid-19 crisis has also highlighted the fact that the transition to a greener world is both necessary

and possible. Many stakeholders expect to seize the opportunity in this crisis and the related recovery

plan to accelerate the EU’s Green Deal agenda.

Investments in distribution networks will have a very positive and distributed impact across the EU

and will enable other related investments, such as in renewable power. These investments will help


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create and maintain thousands of jobs across EU countries while stimulating the competitiveness of

their economies. An acceleration of the capital expenditure (CAPEX) plan for DSOs over 2021–2024

should be a great platform to demonstrate fast and substantial results across all criteria.

E.DSO, together with its DSO members, has decided to focus on four topics:

• Storage and fl exibilities

• Electric mobility

• Equipment, components, services and capabilities sourcing

• IT, data and cybersecurity

A few critical guiding principles emerged across these four themes to be considered as key success

factors in recommendation design and deployment:

• Reaffi rming the role of DSOs as key market enablers in EU markets in the context of the energy

transition

• Recognizing the increasing role of DSOs, together with transmission system operators (TSOs),

in managing the energy transition and its related impacts on the energy system and its balancing

• Giving the opportunity for DSOs to play a priming and experimentation role in new technologies,

thereby accelerating the experience curve and initiating a virtuous cycle

• Promoting a diversity of options in new business models for the benefi t of the customer and to

avoid competitive distortions and concentrations

• Keeping a subsidiarity mindset in the design of solutions for greater agility and to refl ect different

starting points across EU countries


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Figure 1: Battery capacity is growing at 21%, with two-thirds of that going behind the meter

Storage and fl exibilities

What is at stake?

External studies predict the widespread development of storage solutions across the board, both in

front of and behind the meter, with 100 GW of storage capacities available worldwide by 2030, of

which about 24% will be in EU countries (see Figure 1). Roughly one-third of this storage capacity

will be designed to help optimize distribution network effectiveness, facilitate the integration of

renewables and help balance network loads, including peak capacities.

The last few years have shown that relying completely on the competitive market to invest in the

energy storage capacity required to develop greater fl exibility does not meet expectations due to the

absence of profi table use cases.

As the energy transition scales up, storage solutions will become critical to integrate intermittent

renewable power generation (within both the transmission and distribution parts of the grid) and to

ensure grid balancing. For example, to reach the EU’s carbon-neutral ambition by 2050, Europe will

need to reach 650 GW of renewable capacity by 2030 (see Figure 2).

The deployment of storage capacity at scale needs to consider two major factors:

• The business case for storage is not sustainable today in most situations, and therefore an approach

requiring multiple use cases will be necessary to make the investments attractive.

• The deployment of storage solutions should promote the integration of renewable energy in the

network and should not prevent the development of a true fl exibility market.


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For deployment to be effective and sustainable, the evolution of the storage market and regulatory

framework needs to cover all kinds of storage solutions, not just batteries, and those solutions must

consider different time horizons that look beyond short-term storage needs.

In addition to these investments in storage, the energy transition has highlighted the need for greater

cooperation among TSOs and DSOs to better integrate intermittent and decentralized energy sources

in the energy system.

What could the EU do differently as part of the recovery plan?

As part of their mission as market enablers, DSOs need to play a role in promoting and, when relevant,

leading the development of competitive storage solutions. This is critical both to ensure the integration

of renewables in the power grid and for system balancing. Within this context, the role of DSOs in

battery and storage solutions could include:

• Advising and guiding investments in storage to locations that improve system sustainability

• Promoting battery usage through co-investments or public-private investments (for example,

renting out some storage capacities)

• Providing technical expertise for broader storage capabilities beyond short-term fl exibility (for

example, long-term solutions that benefi t the network) and batteries (for example, R&D and inno-

vation support for hydrogen-to-gas conversions and other renewable sources of gas, as well as for

other less mature technologies)

Figure 2: Europe will need to install 650 GW of solar and wind power by 2030 to achieve carbon-neutral ambitions


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Beyond the storage question, DSOs should provide ancillary services to the market in the context of

the development of decentralized and intermittent renewables. Local demand-side management (DSM)

and other fl exibility services may help ensure local network supply-demand balancing. DSM should

become an area where DSOs can invest and operate with mechanisms that comply with market rules.

It could also include the opportunity or even the obligation for DSOs to sell back the storage capacities

they own once the market has matured and profi table use cases have emerged, perhaps driven by

some kind of “use it or lose it” regulation of spare capacity.

Without the priming role of DSOs, the EU will not be able to capture the experience curve benefi ts

in due time and profi t from a decrease in the total cost of storage ownership. A few enablers are

important to consider moving forward, including:

• Demonstration of the value of storage solutions for DSOs in terms of cost avoidance for the

network and added rewards for all stakeholders in the energy system

• Evolution of the grid fee structure from tariffs based solely on volume to an arrangement based

on both volume and capacity – a shift already underway in some countries

• Reinforced coordination between TSOs and DSOs to ensure the supply-demand balance, including

the use of low-voltage fl exibility mechanisms

• Creation of tools that will enable fl exibilities to work, along with digitalization of the network to

optimize both the system and energy fl ow

• Development of the right incentives for DSOs to invest in storage systems, including business

visibility for the DSO

• Convergence at a European level on technical standards, in addition to the work already accom-

plished and ongoing at the national level in most EU countries

This evolution should be done while tasking DSOs to promote a diversity of fl exibility solutions,

especially at the local level.

What are the other areas to consider moving forward?

As energy storage ramps up in Europe in multiple layers of the network, questions arise about

the battery supply chain and how to avoid depending on Asia or other regions outside the EU, all

while still guaranteeing environmental traceability and security, and maximizing added value from

within the EU.

DSOs will need reliable and cost-competitive batteries. To achieve that, their contributions could include:

• Development of EU norms and standards for storage solutions that connect to the grid

• Creation of general rules that favor the localization of battery manufacturing facilities in Europe,

such as the US’s “national security” approach


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Another question concerns the development of competitive storage solutions other than batteries and

the role that DSOs could play in their development, including:

• Integration of power-to-gas conversions and long-term fl exibilities (such as hydrogen or other

renewable sources of gas) in the solution portfolio to be leveraged and developed by DSOs as part

of optimized local and regional energy systems

• The possible contribution to R&D and innovation projects with manufacturers to gain scale on

some of the more promising power-to-gas technologies, which would in turn make them more

attractive economically (for example, consider the experience curve acceleration on technologies

such as electrolysis for hydrogen)

Finally, the EU may also consider promoting cross-country storage experimentations (without going

through TSOs) at a lower grid level where fl exibilities and supply-demand optimization opportu-

nities exist from a market point of view but also favor the integration of the additional renewable

capacities to come.


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Electric mobility

What is at stake?

For several years, EV development in Europe has faced a “chicken and egg” challenge that has hindered

the shift away from internal combustion engines (ICEs):

• Automakers were not developing robust EV offerings because the lack of charging station networks

prevented customers from using them extensively

• Infrastructure players were not investing heavily in charging stations because the lack of compet-

itive EV offerings reduced demand

Recent EU regulations that set new emission targets for automakers in Europe have accelerated EV

development, which should help break this cycle. For example, automakers will launch 25 new EV

models in Europe in 2020, with more to come in the next few years.

The acceleration of the experience curve on batteries and the development of more EVs have also

reduced the cost of EVs compared to ICEs. This, along with government incentives for EV owners,

will bring the total cost of EV ownership down to levels comparable with ICE vehicles by 2020

(see Figure 3). The US expects to reach a similar break-even point in 2021.

Globally, China continues to be the front-runner in terms of charging stations: in 2018, China had

more than half the world’s charging stations, with 40% more than in the EU and US combined.

Figure 3: The total cost of ownership (TCO) of battery-powered electric vehicles in Europe to be on par with internal combustion vehicles by 2020


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For the most part, the business model around charging stations has not yet stabilized (except in

some very dense urban areas), and most EU countries are behind their targets in terms of EV market

penetration and EV charging station deployment.

There is also some risk that the Covid-19 crisis could slow the commercialization of EV solutions.

For example, several automakers that were building their own charging networks are indicating that

they may pause those investments, given their fi nancial constraints.

However, the EU’s recovery plan may create an opportunity to accelerate EV penetration, increase

employment (through the installation, operation and maintenance of charging stations), and strive

toward Europe’s target of 3 million public charging stations by 2030 – a goal which may need to be

revised due to the economic impact of the Covid-19 pandemic (see Figure 4).

For DSOs, some specifi c issues arise:

• There is no common view among DSOs on what to do about e-mobility, especially in the ramp up

to more charging networks and the management of their connections.

• Some networks will adapt more easily to increased loads (for example, from e-mobility or heating)

than others, which may require major upgrades for the other networks.

• Data access will be an issue because some DSOs do not really know where all the charging stations

are, yet many players expect to develop business models around fl exibilities.

Figure 4: Europe aims to deploy 3 million charging stations by 2030


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• Pricing signals, possibly including the development of capacity-based grid fees, may be required

to support the development of smart charging solutions and to educate customers on the best

times to charge their cars.

• The development of charging networks along highways will need to be accelerated and coordinated

with the DSOs.

• The interoperability of protocols, solutions and hardware will need to support the common usage

of charging stations across Europe.


As market enablers, DSOs could play a much larger role in accelerating the deployment of EV solutions,

all without disturbing the competitive landscape. Potential things DSOs could do as part of their role

include the following:

• Design national plans for public charging stations with commitments on ramp-up speed and

investment approach

• Prepare the grid and other facilities for fast charging solutions, including localization plans

• Deploy fast charging stations on highways (includes commitments on network mapping and on

the ability of networks to absorb extra loads, along with the facilitation of administrative procedures

and data triangulation with third parties)

• Assess which parts of the extra volume linked to EV charging can be absorbed through smart

charging rather than a true network upgrade, which could then be set as a prerequisite for addi-

tional charging station deployment

• Create network upgrade programs to absorb extra volume from EV charging stations at home

(for example, mapping low-voltage networks and multiyear network planning)

• Co-invest and participate in the installation of additional charging stations, especially in less

dense urban and more rural areas

• Enable a complete smart charging system that can advise on the right time to charge

• Enable the right roaming solutions via interoperable equipment to get access to all charging stations

and promote roaming solution diversity

While there is a general view that most practical actions should be designed at the national level,

there is a strong consensus for common principles and standards defi ned at the EU level, including

the potential experimentation and priming roles that DSOs can take on to accelerate the deployment

of charging station networks at scale.


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A few enablers are important to consider moving forward, including:

• Modern grid fee structures that educate customers about when and how to charge and that prevent

the emergence of new periods of peak demand (to be translated afterward into fl exibility schemes

supported by pricing signals that factor in the scarcity risk)

• Specifi c investment mechanisms for DSOs to play a priming role in the deployment of charging

stations, which could include the opportunity for TSOs and DSOs to sell back the charging stations

they own once the EV market has matured and the business model for charging stations has

become profi table

• Reinforced experience sharing among DSOs on the best ways to promote open protocols and

common standards, accelerate the development of EV charging stations and facilitate the effective

integration of charging stations into a network

• Regulations for the construction of new housing and offi ce buildings that integrate the required

power capacities for EVs


The lack of a dense and effective network of charging stations appears to be the major bottleneck in

the widespread adoption of EVs in many EU countries. Without a stable and attractive business case,

fi nancing could remain challenging. In addition to the recommendations defi ned above, the EU may

consider a few more disruptive options, including:

• Developing a specifi c concession framework for charging stations that is potentially adapted to

different geographical areas (such as rural vs. urban)

• Creating public-private partnerships or alternative fi nancing mechanisms to attract private fi nancing

for charging station development

The development of smart charging solutions and the adaptation of grid fee structures to ensure the

balancing of the network and to optimize the amount of investment required will also be critical to

educating customers on when and how to charge their EVs.

Finally, there may be some interest in stimulating R&D and innovation in other forms of green

mobility. DSOs and the EU could support specifi c investments in disruptive solutions like hydrogen

to accelerate the experience curve and make these solutions more effective and effi cient in the mid-

term (taking into account storage capacities and multiple uses for storage).


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Equipment, components, services and capabilities sourcing

What is at stake?

The EU energy system has worked very well during the Covid-19 crisis, and business continuity has

been ensured across countries despite massive disruptions in the market and for all stakeholders.

Despite this, the crisis has highlighted some of the dependencies that EU industries have on external

suppliers, particularly those in Asia (for example, in telecom equipment).

Drilling down into the categories where supply-chain tensions may exist, DSOs have realized that

dependencies tend to occur more in some components of critical equipment (Tier 2 suppliers), rather

than in the assembly of the equipment itself (Tier 1 suppliers).

This raises questions about the role of TSOs and DSOs in Europe’s supply chain, and whether they

can leverage their innovation and purchasing power to strengthen it. These questions include:

• Where to intervene and how to translate that intervention in terms of investments

• What benefi ts to expect (IP, employment, cost competitiveness, security of supply) and how to

balance priorities among these benefi ts

• How to promote the development of a competitive ecosystem while maintaining normal business

rules and avoiding the development of competitive distortions

It is important to consider not only the supply-chain dependencies in place today but also those that

may occur in the future. While there are few categories in which DSOs believe the dependency is

already unsustainable or risky, the industry is experiencing a prolonged decrease in manufacturing

capabilities in Europe, raising some concerns about long-term sustainability (for example, with some

cables and transformers). The industry also has growing needs around IT and data equipment,

services and capabilities.

In addition to core equipment and services, there is a strong conviction that the notion of securing

the energy system’s supply chain should become a DSO capability and competency, critical to

ensuring business continuity and energy system effectiveness. This may be particularly true in

developing capabilities (smart grid, data, IT and cybersecurity) but also in some core traditional

ones (network engineering).

Finally, there is interest in moving forward quickly on this, codifying the lessons learned from the

Covid-19 crisis while it is still vivid in every stakeholder’s mind and translating them into tangible

policy and regulatory rules, supply-chain practices and other ways of working before these lessons

are forgotten. The sense of urgency is also important, given the impact of DSO investments on the

creation and preservation of high-quality and skilled employment in Europe’s power sector.


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There is a common view among DSOs that the top priority for securing the development of a com-

petitive and secure supply chain is around IT components and services, where the dependency on

Asia and the US is growing. This dependency is likely to increase unless specifi c actions are taken.

The same issue is likely to emerge in the development of data platforms and systems, a space where

DSOs need to be able to develop their own solutions rather than relying on third-party options that

may prove more cost-effi cient.

The fi rst area to investigate would be around the new rules and ways of working to secure the supply

chain for technologies that are important to the network’s overall digitalization. It is critical to use

the Covid-19 crisis to accelerate ongoing initiatives and consider more disruptive moves to promote

a diversity of EU-based sourcing options. This could include:

• Development of EU standards to generate economies of scale and EU-based solutions (such as

the defi nition of voltage limits and standards) on critical IT and technical components

• Investigation of more structural partnerships and joint ventures with strategic partners, particularly

for network monitoring and dispatching

The second area to investigate would be around the development of strategic inventory levels on

certain components. Core categories to consider could include:

• Switchgear, cables of specifi c usage and other technical components

• Smart meters and other smart grid components

• Non-core components, such as personal protective equipment

The third area to investigate would be around the securing of competencies that are critical to effectively

develop, operate and maintain the energy system in an effective and effi cient way. These could include:

• Stronger support of ongoing research and capability-building programs currently happening

across Europe

• Development of a specifi c academy at the EU level that focuses on transmission and distribution

(T&D) core capabilities and has a long-term and dynamic vision (for electrical engineers, IT skills

and cybersecurity)

• Promotion of the right of DSOs and TSOs to experiment with new business models and tech-

nologies that accelerate the experience curve for these competencies and test their skills on real

pilot cases


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A few enablers are important to consider moving forward, including:

• Acceleration on the convergence of norms and standards between EU countries in the T&D space

to benefi t from additional scaling effects on the supply-chain side

• Integration of strategic inventories and their additional costs in DSO remuneration mechanisms

and grid fee calculations

• Simplifi cation of the request for proposal processes for DSOs so that they can more easily investi-

gate structural partnerships and joint ventures with strategic partners, especially in the digital space

• Experience sharing and increasing convergence among DSOs on their business continuity

frameworks, including

– The codifi cation of learnings from the crisis and how it is forcing DSOs to revisit their supply-

chain strategy inventory

– The integration of new kinds of risks, such as cybersecurity in each DSO’s preventive, correc-

tive and defensive plans (keeping in mind the cybersecurity tenets of protect/defend/react)

• Experience sharing among DSOs on the evolution of the competitive landscape for some core

categories, especially the ones with a trend toward mono or dual sourcing situations outside the EU


To keep the focus on pragmatic recommendations, the upstream integration of DSOs and TSOs in

specifi c product and service categories to secure the supply chain (such as investment in or acquisition

of manufacturers and suppliers) has been deprioritized for the time being.

It may also be hard for DSOs to develop and sustain competitive positions, given:

• The more global market addressed by suppliers beyond Europe

• The need for alignment among DSOs on priorities and the way to govern them

• The speed of product and technology evolution in some of these markets

However, with a view toward reinforcing the EU’s industrial strategy, a more structural and strategic

move may be considered, involving (or not) DSOs in the shareholding structure and in the governance

of these activities.

For similar reasons, DSOs have been slow to develop shared strategic inventories for certain critical

components. It is unclear whether:


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• Mutualizing these strategic inventories would bring any cost saving or other operational benefi t

to DSOs

• Ensuring the governance of the shared inventories, especially when it comes to getting access to

them and prioritizing allocations among DSOs, would actually be effective

However, with a view toward securing the supply chain for some product categories, a shared inventory

may also be considered in some of them, given the tensions experienced during the Covid-19 crisis in

some of them (for example, face masks).


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IT, data and cybersecurity

What is at stake?

With the deployment of smart grids, the development of data-focused business models and the overall

digitalization of the network, it is critical to continue to upgrade IT infrastructure and cybersecurity

practices (see Figure 5). To share data with suppliers and local authorities, there is also a need to con-

tinue to develop data exchange systems while also standardizing systems, protocols and data formats.

The proliferation of data raises as many opportunities as it does challenges for DSOs that want to

enable and promote the use of data for the benefi t of their stakeholders while ensuring their protection

and preventing security breaches. Promotion of the diversity of data exchange solutions (and the

suppliers that are and will be collaborating with DSOs in their development) will also require attention.

The Covid-19 crisis has also reinforced the need for reliable and robust IT infrastructure that enables

the remote management of networks and facilitates work-from-home practices.

In that context, cybersecurity is a very important priority with three challenges for DSOs:

• Ensure business continuity in the energy system, which is essential given the number of business

and other critical systems that depend on electricity. There has been an early-stage defi nition at the

EU level, but the detailed framework in the context of the energy transition is still to be defi ned.

Figure 5: An increasingly complex and interconnected electricity system demands a more sophisticated technological infrastructure


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• Ensure business continuity in the data, including framing and interoperability among systems.

The EU is almost at stage zero on this, facing a lack of alignment on what should be shared as open

data vs. shared through restricted access. There is a need to defi ne the entire framework across

the entire data value chain with consistent defi nitions and the application of a cybersecurity

framework across EU countries.

• Ensure business continuity and trust in the energy system (technical, security, processes, data

and information sharing, mastering of technology components), including preventive, corrective

and defensive plans (again, protect/defend/react)


It is important to promote interoperability that encourages interactions and the use of data. To that

end, the EU should promote common protocols that increase interoperability among data platforms.

In the context of the proliferation of data exchanges within the energy system, the role of the DSO

also needs to evolve. For a DSO to remain as a neutral market facilitator in a transparent way, it must

be part of all the platforms that share data. The DSO will need to be positioned as the energy system’s

data provider and analyzer for all stakeholders, and the EU will need to defi ne the related principles,

even if the detailed design and execution are done at the national level.

For the ecosystem, the IT infrastructure upgrade will require deeper collaboration with leading IT

providers, given their distinctive expertise, yet will also need to minimize dependency on some of

them. This may require an adaptation of the selection and engagement rules of DSOs with third-

party providers, allowing them to be more creative and fl exible in their collaboration with them, such

as multiyear contracts, performance-based remuneration mechanisms with suppliers, JVs and other

forms of strategic alliances.

For cybersecurity, there is a growing need to introduce a common maturity framework across DSOs

in Europe that will help prevent security breaches and put the right protocols in place to come back

to normal should a security break occur (to detect and restore or isolate and contain, as opposed to

prevent). The EU needs to ensure a consistent level of cybersecurity for data across all DSOs, local

and national governments, and third parties It should also leverage common software solutions and

protocols whenever possible to accelerate the improvement of systems and processes in bridging

identifi ed security gaps. While the overall framework needs to be defi ned at the EU level, the models

and infrastructure decisions should remain national to limit cybersecurity risks.

All these evolutions are likely to require closer collaboration among TSOs and DSOs. There is a

need for an assessment of strengths, weaknesses, opportunities and threats (SWOT) of the current

split of duties between TSOs and DSOs, taking into account the different approaches and views of

small vs. big DSOs.


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Areas of closer collaboration may include:

• Development of common network codes for data exchange

• Qualifi cation of new business models around data to ensure a secured sovereign access and to

avoid competitive distortions or concentrations by hyperscalers, particularly among large US

technology fi rms

• Convergence of EU members’ approaches on cybersecurity and data protection, especially on

sharing data for demand and network planning, as well as for the benefi t of the customer


All the recommendations and potential actions described above may be extended to the entire energy

system, including common data frameworks between gas and electricity to favor the development of

services around them. While the fi rst priority may be to focus on the IT, data and cybersecurity oppor-

tunities and challenges that are specifi c to power distribution, there may already be specifi c areas to

investigate between the power and gas DSOs.

Moving forward, many other areas are likely to require increased collaboration and experience sharing

among DSOs, including 5G, ecosystem collaboration, business continuity plans with updated IT and

cybersecurity, and the integration of other digital technologies and data sources such as drones and

local fl exibilities. Building on the routines that have been put in place between DSOs during the

Covid-19 crisis will be critical.


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Ways to move forward and potential short-term measures to gain traction

The recommendations defi ned around the four topics reviewed here combine short- and long-term

regulatory, fi nancial and operational levers. Together, they form a framework for accelerating DSO

investment plans in 2021-2024. By focusing on the network upgrade, and more specifi cally on these

four topics, these investments would support the recovery of European economies as well as the

EU’s Green Deal agenda.

A few prerequisites are important for these recommendations to be effective:

• Removal of regulatory barriers preventing DSOs and TSOs from contributing to the recovery

plan, including barriers against an increase of CAPEX investment by DSOs and TSOs in a given

year (for example, caps based on a percentage of GDP)

• Mobilization of the supply chain as well as the internal resources of DSOs and TSOs to meet

additional demand

• Removal of bureaucratic hurdles at the EU, national and local levels to accelerate permit procedures

and planning processes (for example, authorizations to open new lines)

• Alignment on ambitious but achievable targets among the EU, regulators and shareholders, such as:

– Delivery of the initial plan for 2020, given the delays created by the Covid-19 crisis, followed by

a double-digit boost plan for the following three to four years (specifi c target to be customized

by country)

– Joint work among DSOs, TSOs, regulators and other stakeholders to ensure the right focus of

the extra investment by topic (for example, smart grid, active system management, e-mobility,

digital, renewables integration or bird-life investments), location (urban vs. rural), etc.

• Funding support from the EU on specifi c investments supporting the Green Deal agenda with

clear eligible criteria

• Alignment with regulators on the overall funding approach to avoid negatively impacting the

returns of DSO and TSO shareholders

Bold ideas. Bold teams. Extraordinary results.

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