Nonetheless, the rationale for power system transformation in local grids remains. In a process of continuous learning, policy and market reform will continue to unlock the potential of intelligent technologies, innovative business models and increasingly empowered end users that could well drive the decentralisation of electricity supply.

Policy principles for DER

Reform tariffs to encourage system-friendly investment in and use of DER: Making time-of-use tariffs accessible to a wider array of consumers may be a useful way of encouraging improved use of DER. It is critical to balance tariff simplicity and accuracy of the economic signal. Aggregators and retailers have a critical role in helping to achieve this balance. Attention should be paid to limiting the impact of tariff reform on lower-income consumers. Tariff reforms may also free up public finances to engage in targeted programmes to tackle energy poverty.

Promote and require digitalisation and connectivity: One prerequisite for visibility and control across the power system is the availability of appropriate real-time monitoring systems with bidirectional communication across grids, loads and generation. The exact implementation depends on the size of asset or process to be managed and needs to balance the cost of communication infrastructure with achievable benefits.

Enable technology neutrality for the provision of flexibility: Prequalification requirements, such as minimum volume, derating methodologies, minimum response time or aggregation thresholds, may implicitly provide an advantage for existing inefficient assets. System operators, regulators and policy makers should review the match between current requirements and the technical capabilities of new system resources.

Establish procedures for open and secure access to power system data: Greater monitoring and computing capabilities present an excellent opportunity for constant improvement of power system operation and the development of new business cases. Allowing access both to power sector participants and researchers may assist policy makers in identifying new areas of opportunity. In any case, clear security protocols to avoid data breaches should be put in place.

Provide regulatory incentives for efficiency, automation and innovation in network management: The introduction of budget bonuses for the deployment of advanced technologies may assist network owners to modernise the grid infrastructure and improve operations. Such programmes can help extract flexibility from the networks even in a restructured context where grid business is separated from system operation.

Co-ordinate synergies with the ICT sector: Reliable, secure and fast communications are necessary to ensure that increasing integration with ICT meets the reliability and response requirements of the power grid. As such, there may be overlaps in the regulation of telecommunications and the energy sector that need to be managed to ensure costeffectiveness, security and network access.

Upgraded planning frameworks

Power sector planning is an inherently complex process due to the long planning horizon and is subject to a range of drivers that are highly uncertain. Further complexity results from planning consisting of a number of activities that are undertaken by multiple groups and jurisdictions for a given power system (Cochran et al., 2012).

Traditionally, the primary focus of power sector planning was on expanding supply infrastructure (generation, transmission and distribution networks) to meet projected electricity

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