From last mile to first mile

Representing over 90 percent of grid infrastructure, they have traditionally been seen as the “last mile”, merely delivering electricity generated at the transmission level to consumers. This model needs fundamental modernisation today, as distribution grids struggle to absorb growing renewable supply and meet surging electricity demand from electric vehicles, industry processes, cooling and heating systems, and data centres.

This requires coordinated action across three interconnected policy domains: grid planning that anticipates future supply and demand, grid deployment that streamlines administrative processes to integrate new assets at speed and scale, and grid operations that unlock flexibility from distributed energy resources (DERs). Stronger transmission-distribution coordination is also essential to enable the operation of a decentralising power system. Digitalisation is the common foundation for these reforms to deliver their full potential.

The technical solutions for active grid management are proven and deployable today. Their uptake depends upon clear utility mandates, incentives, and regulatory and investment frameworks. Targeted reform can align utility actions with the public interest and channel the required investment in ways that prioritise performance and the leveraging of consumer-owned resources.

As distributed energy resources (DERs) scale, countries in early phases of deployment have the opportunity to leapfrog to decentralised, consumer-centric systems. By putting the right frameworks in place, countries can design systems that actively leverage these resources from the outset, helping to avoid congestion costs and delays seen in frontrunner markets, and capturing the full affordability, reliability and sustainability benefits of DERs.