The transformation progress of the smart grid challenges the market players’ business models. One of those market players is the Distribution System Operators (DSOs). This paper aims to elaborate how smart grid influences the DSOs’ business models with case studies of two Danish DSOs – EnergiFyn and TREFOR. The main findings indicate that the Danish smart grid transformation process influences the Danish DSOs’ business models via four smart grid related factors: (1) smart meters, (2) Distributed Energy Resources (DERs), (3) Bidirectional electricity flow, and (4) R&D. Therefore, the results show that the smart grid incrementally not revolutionary influences the Danish DSOs’ business models, and the smart grid transformation of the Danish electricity grid is slower than the agenda of the official Danish smart grid development strategy.

1. The Smart Grid Impact on the
Danish DSOs’ Business Model
Zheng Ma,
Simon Sommer,
Bo Nørregaard Jørgensen
Center for Energy Informatics
University of Southern Denmark
Thursday, 13 Oct, 2016
Energy Efficiency, Demand
Response, & Energy Markets

2. Agenda
• Introduction
• Literature
• Methodology
• Results
• discussion
• 2016-10-[..] Zheng Ma, University of Southern Denmark 2

3. Introduction
• Smart grid in Denmark
• DSOs
The Danish smart grid

4. Research question
• How did the introduction of smart grid influence the business model of
distribution system operators (DSOs) in Denmark?
Revenue caps for Danish DSOs
Relationship between necessary investments, network losses
and the revenue cap

5. 1.Technical tasks/Financial tasks:
- Investments in development of networks
- Grid operating
- Grid maintenance
2. Connection assignments:
- Connecting production (e.g. of DER to the distribution grid)
- Connection of customers to the distribution grid but if necessary also disconnecting users upon their own request or because
of safety and security reasons
3. Ensure capacity and access to the network:
- Control and monitor distributed generation in order to perform optimally
- Avoiding blackouts
- Down regulation of active power to avoid bottlenecks
- Ensuring sufficient capacity is available
4. Grid security and stability:
- Maintain gird security (e.g. cyber security/Firewall) and locate and solve grid faults
- Traditional load shedding, distributed generation (DG) shedding in order to cope with extreme situations (e.g. very low load
and excess of feed-in from generation, which can cause new technical problems on the grid)
- Use flexibility services provided by demand response or small generators to solve voltage or capacity constraints on the
network
5. Meter rollout:
- Technical customer support
- Meter roll out. However, no activities reaching beyond the meter (into end consumer houses)
6. Measures tasks:
- Map energy consumption
- Plan and secure the implementation of energy savings in the supply area
7. R & D tasks:
- Develop a real-time view of the load on the distribution network
- Development of online tools to control and solve emergency situations
8. Energy-saving and efficiency:
- Losses management to improve network efficiency by reducing actual losses (Danish DSOs are
provided with an economic incentive to reduce losses)
- Local regulation voltage through active and reactive regulation in order to save energy
9. Data management:
- Conduct information activity in order to create the greatest possible transparency concerning market
conditions for all consumer groups
- DSO shall in co-operation with transmission companies and grid companies draw up annual surveys
and forecasts for the use of actual and potential market actors and to illustrate fulfilment of public
service obligation
- Needs to deliver information to supplier and to consumer. TSO-DSO communication and also DSO-
DSO information exchange
- Ensure personal data protection according to national legislation on privacy.
10. Consultancy:
- Provide energy counselling and advice on questions concerning electricity security to consumers in
the supply area (e.g. consultancy relating to transmission and distribution electricity).
11. Providing advanced services:
- Provide infrastructure for electric vehicles (e.g. for charging stations)
- Offer energy efficiency services, ownership & management of metering equipment
- Providing advanced devices (e.g. displays) and added-value services for energy efficiency (e.g. raise
awareness and incentivise efficiency in final consumption).
12. Value capture:
- Profit formula in accordance with economic regulations.
13. Cooperation/Networking:
- Networking with research institutions and government
- Interactions with the TSO, with electricity suppliers and increasingly with distributed connected
generation, other DSOs, Energy Service Companies (ESCOs) and electric vehicle (EV) recharge
Core activities of Danish DSOs derived from literature

6. Methodology- Selected business models

7. Primary Data
Interview order Interviewee Title
Company /
Organisation
Code
1 Per Soerensen Head of DSO TREFOR A1
2
Jesper Knudsen Power Engineer EnergiFyn A2
Peter Hansen Project Leader EnergiFyn A2
3 Zerina Prljaca Research Assistant
University of
Southern
Denmark
A3
4 Erika Zvingilaite
Postdoc, Msc. Eng.
PhD
University of
Southern
Denmark
A4

8. Results- smart grid influence on business
model of Danish DSOs

9. business model framework of Danish DSOs
with smart grid influence

10. Conclusions
• Service Domain
• Technology Domain
• Organisation Domain
• Value Network
• Openness
• Smart grid related factors:
(1) smart meters,
(2) Distributed Energy Resources
(DER),
(3) Bidirectional electricity flow,
(4) R&D.