DSO (Distribution System Operator)

DSO — how to convert grid management towards a smarter system?

R&D Electrical network

The energy sector is currently undergoing a transition towards a smarter, more sustainable model. This process involves innovation and digitalisation, and its main purpose is to care for the planet and the human race. The implementation of the DSO (Distribution System Operator) model will make it possible to maximise the integration of renewable energy sources and accelerate the decarbonisation of the economy, providing improved benefits to customers.

  The DSO model will revolutionise the distribution of energy through digitalisation.
The DSO model will revolutionise the distribution of energy through digitalisation.


The traditional unidirectional model (Distribution Network Operator - DNO) of energy distribution, from high-voltage transmission networks to consumption points, is being transformed by the integration of renewable energy sources and energy decentralisation. The operation and management of these new resources requires a digital grid that is smart and flexible.

What are DSO (Distribution System Operators)

Distribution System Operators (DSO), are the entities responsible for distributing and managing energy from the generation sources to the final consumers. Digitalisation is the key to securing the DSO model, which requires investments in automation, smart meters, real-time systems, big data and data analytics.

The DSO model uses smart meters that allow bi-directional reading of the energy flow and real-time communication. This makes it possible to detect interruptions and restore the supply automatically, as well as facilitating the monitoring of customers' daily consumption through digital consultation platforms available to them.

A visual representation of the differences between the DNO model and the DSO model.
A visual representation of the differences between the DNO model and the DSO model.



The advantages of the DSO model

The growing electricity demand from low carbon emission technologies such as, for example, electric vehicle charging, together with the increase in distributed energy resources, has led to the need to create a distribution network capable of proactively handling customer's needs. This is where the DSO model comes in, with three advantages:

  By using smart meters, it has the ability to measure and manage energy flows bearing in mind that they are bidirectional — energy consumed and generated — as well as the intermittent nature of wind and solar sources.

  It allows the massive integration of renewable energies, improving the supply quality and creating value for customers.

  It provides customers with real-time information on consumption, offering them a complete and personalised experience.

The expansion of the DSO model in the Iberdrola Group

The Iberdrola Group's Networks business has launched the following projects, among others:

  • In Spain, it is participating in demonstration projects at European level, such as CoordiNet and OneNet, in which grid problems are resolved through the use of the flexibility of connected resources, obtained through markets, coordinated in the first case with the Spanish system operator, Red Eléctrica, and with the market operator, OMIE, in the second.
  • In the United Kingdom, an active real-time grid control project is being implemented in the Dumfries and Galloway area, which will allow more than 200MW of renewable generation to be connected, avoiding grid congestion.
  • In the US, the massive rollout of smart meters began at the New York State utilities, NYSEG and RG&E, in both the electricity and gas businesses, as well as the ongoing automation of substations.
  • In Brazil, Neoenergia has selected the region comprising the cities of Atibaia, Bom Jesus dos Perdões and Nazaré Paulista, in the east of the state of São Paulo, to invest in improvements to provide a power distribution service closer to that of a DSO. This investment covers the following areas: smart meters, automation and telecommunications.