General distribution grid operation rules Sample Clauses

General distribution grid operation rules. If a microgrid is part of a liberalised (free) market (see section 2.1.4), it has to be operated by an unbundled DSO. This corresponds to the general situation under EU law. Regarding DSOs specifically, article 35 of the 2019 E-Directive sets their unbundling rules. The article’s main requirement is the following: Where the distribution system operator is part of a vertically integrated undertaking, it shall be independent at least in terms of its legal form, organisation and decision-making from other activities not relating to distribution. Those rules shall not create an obligation to separate the ownership of assets of the distribution system operator from the vertically integrated undertaking [69]. This provision means that within the existing EU legal framework a network has to be operated by a legally and functionally independent DSO. This means that although the distribution company may own grid assets, the system operator must be separated in terms of the legal form and internal organisation. In addition, according to article 56 of the 2019 E-Directive, accounting unbundling also apply to integrated undertakings “with a view to avoiding discrimination, cross-subsidisation and distortion of competition”. In practice, these rules may be difficult to apply and may reduce the efficiency of the system management [70]. Although not the most obvious alternative, it is possible that part of the system operated by a DSO be treated in a different manner and operate in the free market model as a microgrid, at least if it could fulfil the three relevant criteria. First, as regards the requirement of localness and small size, the general regime for DSOs does not include any such criteria in its provisions but if applied the option of becoming a microgrid would only apply to a (small) part of the grid of the DSO. With regard to flexibility, article 32 (1) of the 2019 E- Directive is very clear: “Member States shall provide the necessary regulatory framework to allow and provide incentives to [DSOs] to procure flexibility services”. Hence, this criterion is fulfilled. Finally, the general legal regime applying to DSOs does not mention the possibility that parts of the grid can be islanded. These results are summarised in table 2 below. This table presents the three criteria and indicates whether these criteria are met. This means that a “?” indicates that the law does not so provides but there is no barrier either, a “X” indicates a negative assessment and a “✓”...
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