The EU’s energy transition is changing the work of distribution system operators (DSOs). Distributed generation, electrification and active consumers create new demands on local networks. A DSO is responsible for operating, maintaining and, where necessary, developing a distribution system; distribution should be distinguished from transmission and energy supply. These responsibilities are defined in Article 2 of Directive (EU) 2019/944. Network reinforcement can support the 2030 Agenda, including sustainable energy and infrastructure goals 7 and 9, alongside sustainable cities and climate action under goals 11 and 13.
An outlook on the distribution system operator’s landscape in Europe
In the wake of decentralization, a whole range of renewable energy units are rapidly growing to deliver European energy demands. They complement the established generation infrastructure that has supported the EU economy. The European energy trends forecast that there will be demand flexibility, thus requiring modern framework and agile business model.
The policy figures in older energy-investment reports need to be read in their historical context1. Policy update, 1 October 2026: the EU’s 2030 climate target is at least a 55% reduction in net greenhouse gas emissions compared with 1990. The 2023 revision of the Renewable Energy Directive sets a binding renewable share of at least 42.5% of gross final energy consumption by 2030, with an ambition to reach 45%. These supersede earlier targets. Quarterly emissions statistics must also be distinguished from annual totals and long-term targets.
The scale of network investment is substantial, but estimates depend on their date, period and scenario. The Connecting the Dots report published by Eurelectric in January 2021, undertaken with E.DSO and Monitor Deloitte, identified investment needs of EUR 375–425 billion for European distribution grids. That historical estimate should not be presented as an updated expenditure commitment. Financing, permitting, procurement and delivery capacity all affect implementation. Storage and demand flexibility can complement network reinforcement where their technical and economic value is demonstrated2.
A distribution system operator’s challenge in delivering energy transition
DSOs face linked challenges in planning investment, delivering projects and adapting operations. Investment plans must anticipate demand and generation changes while making use of existing resources. Regulation influences how expenditure is assessed and recovered, while permitting, supply chains and workforce capacity influence delivery. A credible plan states its assumptions and can be adjusted when those assumptions change.
Smart meters and other digital systems can improve visibility of the network. Their value depends on data quality, communication coverage and integration with operational processes. Cybersecurity does not improve automatically when more devices are connected: access control, updates, monitoring and incident response must be designed into the deployment. For distributed energy resources and flexible demand, operators also need usable measurements and clear responsibilities for action.
Distribution system operator approach for asset management
The European DSO landscape contains organizations with different scales, ownership arrangements and operating responsibilities. The KPMG report listed below is a historical outlook published in 2016, not a census conducted in 20203. Across these different settings, asset management connects monitoring, maintenance and investment planning. A practical plan identifies critical assets, records their condition and service history, and sets out inspections, maintenance and renewal decisions. Online monitoring may be valuable for selected assets, while periodic tests and field inspections remain appropriate for others.
DSOs implement condition monitoring techniques to assess the health and performance of ageing assets. This includes conducting regular inspections, using sensors for real-time monitoring, and performing diagnostic tests such as oil analysis, thermography, and partial discharge monitoring. They also implement proactive maintenance programs to address the specific needs of ageing assets. They identify critical assets, assess the potential consequences of failure, and allocate resources accordingly. By focusing on assets with the highest risk levels, DSOs aim to use limited resources effectively to mitigate the most significant risks to the system’s reliability.
The specific strategies employed by DSOs vary based on factors such as regulatory frameworks, asset types, system characteristics, and available resources. DSOs continuously review and update their asset management practices to ensure the reliable and efficient operation of their distribution systems despite ageing infrastructure challenges.
Asset fleet behavior with data management
Transformers represent significant investments within distribution networks. The 2021 Connecting the Dots report highlights the need to invest in existing infrastructure as well as new connections. Age is relevant to fleet planning, but it is not a diagnosis or a failure deadline. Assessment should combine condition, design, loading, maintenance history, replacement lead time and consequences of failure. These factors help a DSO compare continued operation, refurbishment and replacement while considering both operating and capital expenditure.
For assets that have reached the end of their useful life or are no longer cost-effective to maintain, DSOs plan for timely replacements or modernization projects. This may involve replacing ageing equipment with new, more efficient technologies or upgrading infrastructure to meet changing operational requirements and regulatory standards. They rely on data analysis and predictive modeling to support decision-making processes related to asset management. They utilize historical performance data, condition monitoring data, and advanced analytics techniques to forecast asset deterioration, optimize maintenance schedules, and allocate resources effectively.
DSOs actively participate in industry networks and collaborations to share best practices, lessons learned, and research findings related to asset management. Collaborative initiatives facilitate the exchange of knowledge, experiences, and innovative solutions for managing ageing assets effectively. They could develop long-term investment plans that consider the expected lifespan of assets and the financial resources required for their maintenance, refurbishment, or replacement. By aligning investment planning with asset lifecycle management, DSOs can plan the funds and resources required for managing ageing infrastructure proactively.
AI-driven asset management decisions
Distribution fleets can contain thousands of assets with records held across laboratories, maintenance systems and monitoring devices. Collecting and comparing those records is a substantial part of condition assessment. Health indexing can summarize selected condition indicators and support fleet ranking. Ronin AI, developed by Seetalabs, supports this workflow. A health index is a model-dependent indicator; it is not automatically a calibrated probability of failure, a remaining-life estimate or an investment decision.
Maintenance events such as filtration, degassing or component replacement can change the interpretation of later measurements. The record should therefore preserve these events alongside sample dates, units and operating context. Before comparing assets, reviewers need to understand how missing values, different test methods and unequal data histories affect the score. More data can improve coverage, but quantity alone does not establish greater accuracy. Non-specialist users may use a ranking to identify questions for review; diagnosis and maintenance decisions still require appropriate engineering judgement.
Try Ronin AI for improved experience on transformer condition monitoring
A demonstration of Ronin AI should use representative records from the intended workflow. Check the supported input format, how dissolved-gas and other oil-test data are handled, what happens when fields are missing, and whether the assessment can be traced back to its inputs. The useful output is a reviewable explanation of which assets deserve attention and why. Integration with online monitors should also be assessed for update frequency, data validation and responsibility for investigating alerts. Performance claims require a defined reference assessment and testing on relevant assets.
You can request a demonstration to discuss the available workflow, data requirements and service terms.
Historical background sources
- European Energy Industry Investments (source: https://www.europarl.europa.eu/RegData/etudes/STUD/2017/595356/IPOL_STU(2017)595356_EN.pdf)
- Challenges facing distribution system operator in a decarbonized power system. (Source: https://www.raponline.org/wp-content/uploads/2020/05/rap-baker-dso-challenges-june-2020-final.pdf)
- KPMG, A new vision for the European DSO (2016 outlook towards 2020). (Source: https://assets.kpmg.com/content/dam/kpmg/pdf/2016/05/Energy-Outlook-DSO-2020.pdf)
