Distribution System Operator (DSO)

A Distribution System Operator manages the medium and low voltage networks that deliver electricity from transmission substations to end users. Beyond maintaining poles and wires, DSOs increasingly coordinate distributed generation, demand response, and electric vehicle charging that affect bidirectional power flows. They serve as the interface between retail customers and wholesale markets in many jurisdictions.

Modern DSO responsibilities include publishing hosting capacity maps, administering interconnection requests, and implementing advanced distribution management systems. DSOs also design tariffs and incentives that encourage flexible load, maintain voltage quality, and integrate microgrids or community energy projects.

Regulators are evolving DSO mandates so that distribution planning aligns with decarbonization targets. Some markets separate DSO planning from supply functions to ensure neutral coordination of distributed energy resources. DSOs now participate in pilot flexibility markets that procure local services such as voltage support or congestion relief from aggregated assets.

Investors evaluating distributed portfolios must understand each DSO's technical standards, data transparency, and upgrade cost policies. Collaboration with DSOs is essential for deploying virtual power plants, vehicle to grid programs, and resilience hubs.