Theme: Governance of the power sector
Keywords: Electricity, grid companies, decentralized governance, Norway, EU
The background for this project was the international trend toward a more decentralized organization and governance of national electricity systems. This shift is characterized by a greater role for active consumers in small-scale electricity production and demand-side management, as well as a more prominent role for local grid companies (distribution system operators, or DSOs) in facilitating prosumers, identifying and leveraging flexibility in consumption and production, and contributing to grid balancing.
The 2019 reform of EU electricity market legislation introduced new rights and obligations for stakeholders to enable such decentralized solutions. The main objectives of the project were to map the development of decentralized energy solutions in Norway and internationally, analyze the impact of relevant policies and legislation (in Norway and the EU), explain the evolution of these regulatory frameworks, and identify opportunities and barriers for further development of decentralized solutions. These overarching objectives served as guiding principles throughout the project, and they were largely achieved.
While the Norwegian Water Resources and Energy Directorate (NVE) provides ongoing statistics on small-scale electricity production, there is limited systematic updating of information related to other decentralized developments, such as the use and aggregation of flexibility from small-scale production and consumption for system balancing, or the establishment of energy communities and microgrids. Our analysis shows that such solutions in Norway are mostly at the demonstration stage (pilot projects), whereas several European countries have seen a much broader deployment of decentralized solutions.
The project also examined how Norwegian grid companies, through research and development (R&D) activities, support the development of decentralized solutions. The findings reveal significant variation between companies but also show that, overall, they are underinvesting: R&D expenditures are significantly lower than the levels permitted without consequences for their revenue caps. Laws and regulations are important external factors influencing companies’ incentives and willingness to invest in decentralized solutions. Our studies show that many Norwegian grid companies view the revenue cap regulation in particular as a barrier to proactive grid development and innovation.
The project produced more academic results than originally planned. These include seven articles published in international journals, three monographs/anthologies—two of which are master’s theses from the University of Oslo, and the third a peer-reviewed book published by Edward Elgar Publishing in August 2025—as well as five chapters in internationally published books. Additional academic publications are expected to follow.
The project also successfully met its communication objectives through popular science publications, media coverage and debates on key energy market issues, targeted reports, policy briefs, articles, and presentations at meetings and conferences. The project results are expected to have significant value for the research field both nationally and internationally.
Research on decentralized solutions in the transformation of national energy systems is still evolving. In addition to academic articles and presentations at scientific conferences, key researchers involved in the project brought together a large group of internationally recognized scholars for joint research and dissemination. This collaboration resulted in a book published by a leading international publisher, titled Are Low-Carbon Futures Decentralised? The Governance of Collective Electricity Systems. We expect this work to make an important contribution to the further development of the international research field.
Project period: 2020–2025
