Digitalization of power distribution grids: Barrier analysis, ranking and policy recommendations

The energy transition process that is being driven by the decentralization and electrification of energy systems impacts significantly on electricity distribution grids. The fast-evolving technical and policy landscape prompts distribution system operators (DSOs) to modernize their operational strategies. This underscores the critical significance of digitalization investments, particularly in optimizing grid performance, managing renewable energy integration, and meeting evolving consumer demands. Despite the expected gains from digital technologies, their deployment in power distribution grids remains limited and partial. This study comprehensively examines the barriers hindering the digitalization of distribution grids, including the technical, organizational, regulatory, economic and human factors. By combining insights from existing literature with interviews with European DSO representatives, we have ranked the barriers by order of significance and identified those that need priority action. We ultimately provide policy guidance with practical recommendations and associated measures to overcome them. The outcomes of our joint analysis inform DSOs, policy-makers and field experts, and serve to formulate detailed policy recommendations to accelerate digitalization.