ACER and CEER guidelines for electricity distribution network planning: modernizing Europe’s energy infrastructure
With the transition to renewable energy and electrification accelerating in Europe, the continent’s electricity distribution networks are facing unprecedented challenges. The Agency for the Cooperation of Energy Regulators (ACER) and the Council of European Energy Regulators (CEER) have published detailed guidelines for distribution network planning that respond to these changing needs and provide a roadmap for modernizing Europe’s energy infrastructure.
They are a response to the European Commission’s Energy Networks Action Plan (2023) and aim to strengthen distribution network planning in the diverse EU landscape, which has nearly 3,000 distribution system operators (DSOs). The recommendations are aimed at creating more coordinated, transparent, and efficient planning processes to support the massive investments needed for Europe’s energy transition.
The scale of the challenge
The transformation of distribution networks in Europe is one of the biggest infrastructure challenges of our time. Distribution networks serve as the backbone connecting renewable energy sources and supporting the decarbonization of the transport and heating sectors. This transformation requires significant investment, estimated at over €50 billion per year until 2050, with approximately two-thirds of the total investment needs in transmission and distribution occurring at the distribution level.
The distribution network in the EU is extremely diverse, ranging from small rural companies serving fewer than 100,000 customers to large urban operators managing millions of connections. Some Member States have more than 100 DSOs, while others operate with a single national distribution operator. This diversity creates significant challenges for harmonized planning approaches and regulatory oversight.
Key challenges facing the sector
National regulatory authorities report several common challenges in assessing distribution network development plans (DNDPs). These include varying levels of detail and transparency in the plans submitted, inconsistencies in data and assumptions, and complex coordination requirements between DSOs and transmission system operators (TSOs). Limited resources, short consultation deadlines, and the rapid pace of the energy transition further complicate the planning process.
The NRAs themselves face equally complex challenges. Delays in issuing permits, disruptions in the supply chain, and labor shortages affect project implementation deadlines. The difficulty of translating long-term forecasts into concrete capacity needs, particularly given the uncertainty surrounding the pace of electrification and the deployment of distributed energy resources, adds another layer of complexity. Many DSOs also face difficulties in accessing finance and adapting to new technical and regulatory requirements related to smart grids, digitalization, and the integration of renewable energy sources.
The role of national regulatory authorities
The Electricity Directive (2019) requires DSOs to submit their network development plans to national regulatory authorities (NRAs) and gives NRAs the right to request amendments. ACER and CEER emphasize that NRAs are best placed to ensure that plans meet sufficient quality standards and ensure the stable development of infrastructure for the benefit of consumers.
The guidelines strongly recommend that NRAs be given robust powers to monitor network development plans, including the power to approve plans and request amendments. Where NRAs are exempt from the requirement to draw up plans, NRAs should retain the power to request information on network development and to take the necessary corrective action.
To facilitate effective oversight, the guidelines recommend harmonizing the content and structure of plans through common templates and predefined structures. This approach encourages harmonization at the national level, facilitates regulatory oversight, and allows for comparative analysis through the application of consistent assessment criteria. Several Member States have already introduced such frameworks, and similar efforts are planned in Bulgaria and the Czech Republic.
Transparency and stakeholder involvement
Effective stakeholder involvement is at the heart of successful distribution network planning. The guidelines emphasize that proactive involvement helps DSOs to better understand the needs of network users, gain a better understanding of local conditions, and build mutual trust, leading to greater public acceptance of infrastructure projects.
The recommendations call for comprehensive public consultations lasting at least six weeks before plans are adopted. Stakeholder comments and responses should be published in full or in summary form. For more in-depth participation, the guidelines suggest separate consultations on key elements of planning, such as scenarios, as well as targeted consultations with specific stakeholders, including municipalities, public authorities, network users, and civil society organizations.
To improve accessibility, the guidelines propose a three-step approach to publishing plans. First, each distribution system operator should publish its plans together with all related official documents. Second, all national plans must be collected and published on a single national platform, such as the NRO’s website. Third, the EU DSO Entity must collect the plans from the national platforms and map them on a dedicated EU-wide platform.
Coordination and integration of planning
The guidelines emphasize the critical importance of coordinated planning between system operators. There are many national planning instruments in place in Member States, and their coordination is essential for the effective achievement of national targets. In addition to coordination within the energy sector, DNDPs should also take into account other relevant national and local planning processes, including spatial and urban planning, which reflect energy demand patterns and may facilitate or hinder infrastructure development.
Close cooperation between transmission system operators and between NAPs and NRAs is becoming increasingly important in view of the emerging challenges and new responsibilities in the energy transition. The methodology for assessing flexibility needs is an example of this cooperative approach, which allows NRAs to delegate responsibilities to other NRAs or TSOs, enabling more efficient analysis and data provision.
Key elements of effective distribution network planning
Time horizon and frequency
The guidelines recommend that DSOs adopt a time horizon of at least ten years for their plans, while ensuring a sufficient level of detail. This forward-looking approach allows them to go beyond short-term needs and plan infrastructure proactively, thereby preventing distribution networks from becoming obstacles to the energy transition.
In terms of frequency, the guidelines support two-year publication cycles that are consistent with transmission network development plans and allow sufficient time for thorough preparation, stakeholder engagement, and consultation processes. This approach reduces the administrative burden while supporting harmonized planning and effective cooperation between system operators.
Three-pillar planning process
The guidelines recommend a structured approach based on three main pillars. First, scenario development involves studying and assessing the possible evolution of electricity demand and supply, taking into account factors such as population growth, economic development, and technological progress. These scenarios form the basis for determining future capacity needs and solutions.
Second, determining network capacity needs identifies where and when additional network capacity may be needed to meet projected demand and supply. This process is based on existing infrastructure and uses scenarios to forecast and localize capacity gaps.
Third, project identification and selection aims to develop optimal solutions for the identified needs. Solutions may include strengthening the electricity network through new infrastructure or upgrading existing facilities, as well as other alternatives.
Scenario development
The development of comprehensive scenarios is at the heart of effective network planning. The guidelines recommend that RDP scenarios take into account national energy and climate plans (NECPs) and be consistent with current policy objectives. NRPs should develop scenarios based on the TYNDP scenarios, translate them to the distribution level, and adapt them to local conditions and specificities.
Scenarios should be coordinated between sectors and consistent with applicable national and local spatial planning strategies. To ensure reliability and transparency, DNDPs should be based on publicly available scenarios and include a detailed description of the scenario development methodology, clear documentation of data sources and assumptions, and explanations of the modeling approaches used.
Integrating flexibility
With the entry of time-dependent energy sources into local networks and the acceleration of electrification, electricity flows at the distribution level are becoming more variable and unpredictable. The guidelines emphasize that flexibility solutions should be assessed alongside conventional investments as part of an integrated planning approach that identifies the most effective combination of solutions to address network capacity gaps.
DSOs should systematically include the assessment of flexibility needs in their planning methodologies and develop methodologies to assess the potential and cost-effectiveness of solutions. The guidelines recommend that flexibility needs in the DNDP be quantified in energy and power, with estimates provided in as much detail as possible.
For each planned flexibility solution, DNDPs should provide guidance on the planned use, expected area and voltage levels, expected timing, contractual arrangements for access to flexibility and competitive alternative solutions for network reinforcement, accompanied by a cost-benefit analysis.
Project planning and implementation
The guidelines recommend that DNDPs include different categories of projects beyond traditional infrastructure, such as smart grids, other infrastructure including SCADA and cybersecurity measures, reactive power compensators and, where appropriate, storage facilities operated by TSOs.
Information on projects should be provided with an appropriate level of detail depending on the voltage level—high-voltage projects should include detailed descriptions, locations, technical specifications, progress status, commissioning dates, and approximate costs. For medium- and low-voltage projects, summary information is sufficient, although more detailed data adds value, particularly for medium-voltage projects.
To facilitate monitoring and digital processing, the guidelines recommend that project-related information be provided in spreadsheet format and that unique coding systems be used. Standardized coding in all DNDPs, as implemented in Denmark and Spain, improves operational compatibility and data consistency.
Monitoring and implementation
Effective monitoring of implementation is an essential element of distribution network development. The guidelines recommend that NRAs monitor the implementation of the DNDP at least in the years between successive plans or integrate monitoring into subsequent editions of the DNDP. This process should focus on the progress of investments and the reasons for delays or reprogramming, promoting transparency and accountability and allowing for timely adjustments.
Considerations related to the supply chain
Taking into account the growing challenges to the supply chain, the guidelines suggest that the EUDSO Entity explore ways to support the resolution of these issues, possibly by including summary information on equipment needs in the DNDP. If deemed useful and feasible, the EUDSO Entity could develop templates for reporting expected equipment needs, which would facilitate better coordination of the supply chain.
Conclusion
The ACE/CEER guidelines provide a framework for modernizing distribution network planning across Europe. By emphasizing proactive, coordinated, and transparent approaches, the recommendations aim to accelerate the smart and inclusive development of networks while ensuring strict regulatory oversight.
The guidelines aim to respond to the urgent need to move from traditional, reactive network planning approaches to more structured and future-oriented methodologies fit for the energy transition. Success will depend on effective implementation by NRAs, strict regulatory oversight by NRAs, and continued coordination among all stakeholders in the transformation of Europe’s energy system.
As Europe continues its transition to a decarbonized energy system, these improvements in planning will prove essential to ensure that distribution networks can adapt to the increasing integration of renewable energy, electricity demand, and emerging technologies, while maintaining reliability and cost-effectiveness for consumers.
