How can regulation foster innovation in the electricity grid? Findings from case studies in Great Britain and Italy

Integrating renewable energy sources into the electricity grid is crucial for reaching the German decarbonization goals. However, increasing renewable energy integration challenges the stability and reliability of lower voltage networks managed by distribution system operators. Simply expanding networks alone is not sufficient; distribution system operators need to innovate for successful renewable energy integration. This paper explores different regulatory approaches that foster innovations by distribution system operators based on practical experiences in UK and Italy. It presents different mechanisms that could be applied in Germany to foster innovations by distribution system operators.