Revisiting the proposal for a new EU DSO entity: the options

The document analyzes the proposed EU DSO entity, identifying risks such as conflicts of interest in drafting Network Codes (NCs) and potential discrimination against smaller market players. It evaluates four options: scrapping the proposal, creating an independent Consultation Forum, embedding strong regulatory safeguards, or limiting the EU DSO's mandate while transferring rule-setting tasks to ACER. The author concludes that a combination of strong safeguards and a limited consultative mandate is the most desirable approach to ensure non-discrimination and alignment with EU climate and energy goals.

• The proposed EU DSO entity faces significant regulatory risks, primarily conflicts of interest because it would be in a "privileged position to draft NCs" that govern its own conduct and that of other market participants, including generators and consumers.
• There are concerns regarding unbundling and competition, as DSOs attached to parent utilities could use the EU DSO to "exert discriminatory influence" and create barriers for competitors in markets for energy storage, aggregation, and EV charging infrastructure.
• The proposal lacks clarity on membership and governance, risking a lack of representativeness where "small, less resourced DSOs may have less incentive to apply for membership," potentially undermining the entity's legitimacy.
• Option 1 (scrapping the proposal) would avoid conflicts of interest in NC drafting but would be a "missed opportunity" to coordinate the integration of renewables, demand response, and smart grids across the distribution sector.
• Option 2 (creating an independent Consultation Forum) would reduce self-regulation risks by making the body "purely advisory in nature," but it would fail to provide a formal platform for cooperation between DSOs and other stakeholders.
• Option 3 suggests embedding safeguards to ensure the EU DSO acts "independent from individual interests of its member DSOs" and contributes to EU climate and energy targets, while granting ACER binding decision-making powers over the entity's activities.
• Option 4 proposes limiting the EU DSO to "strictly consultative and representative functions" and transferring the responsibility for drafting and monitoring NCs to ACER to eliminate the risk of self-regulation.
• The most desirable outcome is a combination of Options 3 and 4, which would ensure formalized coordination while limiting the risks of "discriminatory practices."

APA

ClientEarth (2017). Revisiting the proposal for a new EU DSO entity: the options. https://www.clientearth.org/media/hg0f4bhf/revisiting-the-proposal-for-a-new-eu-dso-entity-the-options-ce-en.pdf

Chicago

ClientEarth. Revisiting the proposal for a new EU DSO entity: the options. 2017. https://www.clientearth.org/media/hg0f4bhf/revisiting-the-proposal-for-a-new-eu-dso-entity-the-options-ce-en.pdf.

Wikipedia

{{cite report |author=ClientEarth |title=Revisiting the proposal for a new EU DSO entity: the options |date=June 2017 |url=https://www.clientearth.org/media/hg0f4bhf/revisiting-the-proposal-for-a-new-eu-dso-entity-the-options-ce-en.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{clientearth2017revisiting, author = {{ClientEarth}}, title = {{Revisiting the proposal for a new EU DSO entity: the options}}, institution = {ClientEarth}, year = {2017}, month = jun, url = {https://www.clientearth.org/media/hg0f4bhf/revisiting-the-proposal-for-a-new-eu-dso-entity-the-options-ce-en.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }