A framework to evaluate how European Transmission System Operators approach innovation

This article looks at the innovation of European electricity Transmission System Operators (TSOs), which play a key role in meeting growing demand for greener and affordable power and for the development of a smarter and reliable electricity system. Due to the radical transformations occurring in the sector TSOs must increasingly invest in research and innovation and evolve by embracing new technologies, new activities and new business models. This study analyse TSO innovation approach by focusing on projects and initiatives related to some key technologies that are gaining attraction across Europe. The study also investigates whether TSOs operating under more favourable regulatory frameworks for innovation are more innovative than others. The results indicate that TSOs tend to have a conservative approach to innovation, developing projects which have the lowest impact on their current business model, while TSOs operating within more favourable regulatory frameworks are indeed more active than others. These results are aligned with previous studies on electricity network companies according to which they tend to avoid investments in innovative activities, unless they are adequately encouraged or incentivized thus bringing the attention on the urgent need for Regulators and policymakers to review and correct their regulation and incentives for innovation