Digitalization of power distribution grids

The energy transition process that is being driven by the decentralization and electrification of energy systems impacts significantly on electricity distribution grids. The fast-evolving technical and policy landscape prompts distribution system operators (DSOs) to modernize their operational strategies. This underscores the critical significance of digitalization investments, particularly in optimizing grid performance, managing renewable energy integration, and meeting evolving consumer demands. Despite the expected gains from digital technologies, their deployment in power distribution grids remains limited and partial. This study comprehensively examines the barriers hindering the digitalization of distribution grids, including the technical, organizational, regulatory, economic and human factors. By combining insights from existing literature with interviews with European DSO representatives, we have ranked the barriers by order of significance and identified those that need priority action. We ultimately provide policy guidance with practical recommendations and associated measures to overcome them. The outcomes of our joint analysis inform DSOs, policy-makers and field experts, and serve to formulate detailed policy recommendations to accelerate digitalization.


Introduction
The energy transition, driven by the decentralization and electrification of energy systems, has significant impacts on electricity distribution grids.In particular, the increasing connection of Distributed Energy Resources (DER) with Renewable Energy Sources (RES) and the growth of electrified transportation and heating make energy flow and demand less predictable.This may constitute a major challenge for grid operators to ensure security and quality of supply (Guerra et al., 2022), increasing the requirements for flexibility and stability (Denholm and Hand, 2011).For instance, the voltage rise effect (Makinde et al., 2021), the economic loss from curtailment to cope with grid congestion (Bird et al., 2016) and the extensive investments needed to support the modernization of the grid (Battaglini et al., 2012) constitute just some of the main techno-economic limitations and challenges that need to be addressed to ensure an efficient green energy transition.Against this backdrop, the role of Distribution Systems Operators (DSOs) is becoming central to the successful transformation of power distribution systems (IRENA, 2019a), as attested by the recent development of dedicated frameworks for advanced distribution grid activities at the EU level.In particular, (Directive (EU) 2019/944, 2019), establishes a framework for more flexibility on the demand side and specifies new roles for DSOs Notably, it defines DSOs' role in the development of Energy Communities as treating market participants fairly to facilitate customer integration and participation in demand response activities.Additionally, from an economic perspective, (Regulation (EU) 2019/943, 2019) enhances the role of DSOs by incentivizing grid-management efficiency and innovation.
The fast-evolving technical and policy landscape is prompting DSOs to modernize their operational strategies (Rossi et al., 2022).This underscores the critical significance of digitalization investments, particularly in optimizing grid performance, managing renewable energy integration, and meeting evolving consumer demands.(IRENA, 2019a), (Heymann et al., 2022).In this regard, it is estimated that power distribution grids in EU27+UK will require investments of €145-70 billion between 2020 and 2030 to facilitate the modernization and digitalization of their assets (Wilczek, 2021).
Within the energy sector, digitalization is described as the increasing application of digital technologies to enhance productivity, security and the efficiency of energy supply (IEA, 2017).An inventory of the various digital technologies applied in the energy sector is presented in (Olabi et al., 2023), (Weigel and Fischedick, 2019).These applications may provide significant potential for DSOs by reducing the costs of grid planning, investment, operation and maintenance, while extending the lifetime of existing assets (Heymann et al., 2022), (Hack et al., 2021), (E.DSO, 2022a).Digitalization is also an accelerator for unlocking the potential of flexibility by increasing the overall visibility of the real-time capacity and operational insights of the entire system (Saele et al., 2023), further leading to lower investment and operating costs.Digital applications for DSOs encompass various aspects, including condition monitoring for asset management (Barja-Martinez et al., 2021), digital substations (Waleed et al., 2019), (Draganova-Zlateva and Geotgiev, 2021), and advanced algorithms for grid operation, which enable flexibility to be unblocked within the grid (Karagiannopoulos et al., 2019).Despite the expected gains from digital technologies, their deployment in power distribution grids remains limited and partial (IEA, 2023).Recent investigations by the European Commission for the European digitalization action plan (EU Commission, 2022), reveal that investments in smart grid development and associated digital solutions are progressing slowly.This can also be deduced from the pace of the roll-out of smart meters (SMs) in the European area (EU Commission, 2020).While some states like Italy, Denmark and Estonia have achieved a smart-meter deployment above 80%, others, such as Germany, show less progress, with a replacement rate of less than 20% (Prettico et al., 2022).Additionally, there is a significant deficiency in actively managing low-voltage distribution networks (Klerx et al., 2021), (Werner et al., 2018) that can be explained with reference to endogenous and exogenous reasons.According to (Colle et al., 2019), DSOs present shortcomings and a lack of data and analysis with an ageing information technology system and a traditional cultural mindset.Besides, the lack of decisive action by National Regulatory Agencies (NRA) regarding grid modernization and their difficulties in keeping pace with advances in technology make digitalization deployment challenging (Dong and Zhang, 2021).De facto, the prevailing model of grid investment, which prioritizes short-term cost savings and lacks a forward-looking approach, proves counterproductive in the context of digitalization (Nolting et al., 2019), (E.DSO, 2022b).
Therefore, it becomes crucial to identify, prioritize and overcome the barriers hindering digitalization, thus expediting the transition to more intelligent power distribution grids powered by the capabilities of advanced digital technologies.

Scope and contributions
Several studies examine the barriers to digitalization in the energy sector (Heymann et al., 2022), (Olabi et al., 2023), (Baidya et al., 2021), notably showing that the challenges related to the adoption and integration of technology are prevalent.However, they come across as generic studies not focused on DSOs.Moreover, given the maturity level of digital technologies, the focus of past research remains on the analysis of technical barriers, while little emphasis is placed on the study of other dimensions such as human, economic, regulatory and organizational barriers (Monaco et al., 2023).Additionally, the afore-mentioned studies do not provide guidance on which barriers should be addressed as a priority, leaving a gap in determining the criticality of these barriers and the necessary direction for timely attention.
In this study, we conduct a barrier analysis for DSO digitalization and address the following questions: 1. What are the different barriers impeding the successful integration of digital technologies in electricity distribution systems? 2. How can policy address these barriers to accelerate the digitalization of DSOs?
We use a multifaceted approach, integrating qualitative methods such as literature reviews and interviews with European DSO experts.This study, as opposed to quantitative approaches like surveys and statistical analysis, is particularly well-suited for unraveling complex issues, providing rich and nuanced insights into the subject matter (Stede et al., 2020), (Hamilton and Finley, 2019).We develop a conceptual framework that delves into the digitalization barriers associated with each individual functionality of DSOs.This framework aims to elucidate both the nature of these barriers and their criticality on an operational level.The outcomes of our cross-analysis will inform DSOs, policy-makers and field experts, and serve to formulate detailed policy recommendations to accelerate digitalization.
The main contributions of this article are summarized as follows: 1. We contribute to the state-of-the-art by providing a comprehensive analysis of an extended set of barriers, including the technical, organizational, regulatory, economic and human factors, that impede the successful digitalization of DSOs. 2. Building upon expert knowledge, we cross-check each barrier to digitalization with the DSOs' core functionalities and propose the first ranking, to our knowledge, of how the identified barriers affect digitalization for DSOs, thereby providing valuable insights for policy-makers and relevant stakeholders to prioritize their actions.3. The study presents a variety of policy recommendations tailored to each barrier category, providing stakeholders and policy-makers with specific actions to overcome obstacles and facilitate the digital transformation.4. In addition to policy recommendations, the study offers a toolkit of measures and tools aligned with each recommendation, offering practical strategies to address the intricacies of digitalization.
The research is organized as follows: Section 2 analyses the evolutionary framework of DSOs and their required functionalities within the context of the energy transition and maps the different barrier types to digitalization.Section 3 presents the methodology used in this study to analyze and prioritize digitalization barriers.Section 4 presents a detailed discussion of our interviews with experts.Section 5 summarizes the policy recommendations to overcome digitalization barriers and concludes with insights for future research.

The evolving role of DSOs
DSOs have passive roles within power systems, as pointed out in past studies (IRENA, 2019a), (Colle, 2023), and illustrated in Fig. 1.Their responsibilities primarily encompass planning, operating, and maintaining distribution networks.With the deployment of DERs, final consumers become more active in the system through, e.g., decentralized generation and flexible loads.Due to the decentralization of energy production, new market players are also emerging, such as prosumers and aggregators.The escalating integration of DERs and the resultant complexities in grid load management pose significant challenges for DSOs (Nijhuis et al.), (Bogdanov et al., 2021), (Strbac et al., 2016).To effectively address these challenges and capitalize on emerging opportunities, network digitalization is widely recognized as a catalyst for leveraging the evolving power system configuration, minimizing network reinforcement costs, and maintaining operational efficiency and service quality (Prettico et al., 2022), (IRENA, 2019b).By leveraging technologies such as smart sensors, meters, AI, and robotics, DSOs can optimize grid operations, improve asset management, and enhance customer services (IEA, 2017), (Deloitte, 2021).Consequently, digitalization not only enhances existing DSO functionalities, it also unlocks new capabilities.Building upon previous research, we identify six core functionalities (IRENA, 2019a), (Colle, 2023), (Wei et al., 2019), (Prettico et al., 2019), (Karpa, 2017).While some are already established and ripe for enhancement through digital technologies, others, like flexibility management, are still emerging.Table 1 summarises these functionalities, highlighting the activities enhanced and enabled by digitalization.Additionally, Table A.1 in Appendix A provides a detailed overview of DSO digital tools categorized by core functionality.Below, we delve into the different functionalities and elucidate how digitalization fosters their enhancement and development: 1. System Operation (SO).Refers to the comprehensive set of activities that ensures the reliable and efficient functioning of the distribution grid.It involves data collection, analysis and control to maintain grid reliability, manage advanced technologies,1 balance supply and demand, provide support to the transmission system, and facilitate seamless interactions between distribution and transmission operators (Hadush and Meeus, 2018a).Digitalization introduces transformative capabilities in system operation, particularly regarding real-time data-management, analysis and control.This will create visibility over power flows, loads and connections at the distribution level.Nowadays, supervisory control and data-acquisition systems are crucial for the real-time monitoring and control of energy distribution networks (Yan et al., 2013).Similarly, Distributed Energy Resources Management Systems are emerging software technologies that support DSOs with the integration and management of DERs (Strezoski, 2022).Looking ahead, digitalization for system operation will further drive predictive analytics for failure management and advanced maintenance using advanced algorithms and artificial intelligence (Zhang et al., 2018).

System Management (SM). Encompasses long-term activities
essential for managing and maintaining the distribution grid.Specifically, this function conducts sensitivity analysis to assess the impact of DER and EV adoption on the network, accounting for factors such as population growth and economic development.It identifies potential risks and devises mitigation strategies, aiding in the prioritization of investing in skills and facilitating workflow management.Additionally, SM entails the design of smarter equipment to enhance grid performance, overseeing the connection and disconnection of DERs in a coordinated manner, and engaging with stakeholders to avoid creating network issues while promoting the transition to digitally mature organizations (Strbac et al., 2016), (Wei et al., 2019).In this case, digitalization involves the use of Geographical Information Systems (GIS) to map the distribution network (Bosisio et al., 2021).Simultaneously, Energy Management Systems are emerging as central hubs, harmonizing data from various sources to optimize energy management and enhance efficiency while facilitating demand-side management (Hayes and Prodanovic, 2016).3. Network Planning (NP).Involves strategic analysis, design, and optimization of the distribution grid to meet current and future electricity demands while ensuring coordination with the TSO and addressing capacity requirements.Traditional practices include load-forecasting and infrastructure optimization, now enhanced by digital tools like distribution network simulation software (Joshi and Pindoriya, 2018).Emerging practices facilitated by digitalization include leveraging real-time local data to reduce reliance on grid reinforcement as the primary solution to voltage and congestion issues in networks (Karagiannopoulos et al., 2017).A coordinated approach to system operations, information exchange and planning at the transmission level will help to keep the energy flowing across the entire system, not just the local network (Colle, 2023).4. Asset Management (AM).Encompasses the operation of assets over the whole technical life-cycle, guaranteeing a suitable return and ensuring defined service and security standards (Schneider et al., 2006).It includes asset inventory, maintenance strategies, determination of conditions of components, and asset simulation (Schneider et al., 2006).Condition-monitoring sensors check equipment health using IoT technology, enabling predictive maintenance and minimizing downtime, demonstrating how digitalization is improving this functionality (Li and Li, 2017).Additionally, novel concepts such as digital twins, not yet widely adopted, enable the creation of virtual asset replicas, facilitating testing, predictive analysis, and performance optimization throughout their lifecycle (Khan et al., 2023). 5. Flexibility Management (FM).Ensures that the distribution system remains flexible, i.e. able to respond promptly to fluctuations in electricity supply and demand (IEA, 2019).Flexibility management is an emerging functionality that is required for the intelligent management of DERs and is facilitated by advances in real-time management technologies (Duma et al., 2024).It also encompasses the growing involvement of network operators in local market management, extending to tasks like congestion management and voltage control, as highlighted in (Reif et al., 2023).This includes activities such as demand-response management, Volt-VAR management, ancillary services management and network capacity management.Notably, EU Directive 2019/44 (Directive (EU) 2019/944, 2019), emphasizes DSOs' role in procuring such services from distributed generation, demand-response or energy-storage providers where such services cost-effectively address capacity challenges and ensure efficient, secure distribution system technologies, including smart meters, IoT devices, and grid automation systems.
R. Monaco et al. operations.Digitalization enables the introduction of flexibility.
Established practices, such as demand-response platforms, empower consumers to adjust energy usage in response to grid signals, thereby enhancing grid stability (Stanelyte et al., 2022).Emerging strategies, such as virtual power plants, optimize the contributions of distributed energy resources to grid operation and efficiency (Park and Son, 2020).Moreover, blockchain technology could unlock new market opportunities by facilitating secure peer-to-peer energy trading (Wongthongtham et al., 2021).6.Commercial Operations (CO).These relate to the commercial aspects of the electricity distribution business, which include customer service, contract management, compliance management and market facilitation.Main activities include the management of the interfaces between the DSO and other market players (retailers, aggregators, etc.), and third-party access.Here, digitalization materializes in using information technology systems that enable real-time or nearreal-time data-exchange between stakeholders.For instance, Smart Metering systems facilitate precise billing, load profiling and realtime energy services, ensuring accurate and efficient transactions (Knayer and Kryvinska, 2022), (Pitì et al., 2017).Overall, these systems optimize data flow, simplifying collaborative efforts between DSOs and key independent actors.
Interconnected tasks and responsibilities within the described functionalities may lead to overlapping activities.For a comprehensive breakdown of functionalities and related activities (see Table S1 in the supplementary material).
The successful execution of the above functionalities relies on the effective investment in and integration of digital technologies.However, this digitalization effort is often limited due to a wide range of faced or perceived barriers, as described below.

Table 1
DSOs main functionalities and related conventional (in black) and digitalization-enabled activities (in green).
R. Monaco et al.

Digitalization barriers for DSOs
Multiple recent studies provide an insightful knowledge base in drawing up an inventory of existing barriers to distribution grid digitalization (Heymann et al., 2022), (Olabi et al., 2023), (Baidya et al., 2021), (UNECE, 2022b).Building on this corpus, we take a holistic approach in order to categorize these barriers systematically into five distinct categories further reduced to their specific challenges (Fig. 2).

Technical barriers
Technical barriers encompass obstacles to digital applications in distribution grids arising from a lack of or insufficient hardware, software, or communication technologies.This is particularly observed with existing infrastructure (Verma et al., 2020), (Ullah et al., 2021), which does not favour the assimilation of new digital technologies (Olabi et al., 2023) and present challenges to the scalability and replicability of digital solutions (Fotis et al., 2022), (Sigrist et al., 2016).These challenges are closely linked to interoperability issues among digital technologies, including the extension, harmonization and validation of common information models, as discussed in (Kim et al., 2020).In addition, barriers arise from the incompatibility between legacy infrastructure and modern digital technologies (Zambetti et al., 2020).(Mohanty et al., 2016) show that the deployment of smart components or digital technologies hinges on the availability of supporting software and hardware infrastructure.
Subsequently, challenges concerning data management, including availability, governance and sharing, also fall within this category (Charalampous et al., 2021), (Massey et al., 2022).(Veskioja et al., 2022) further highlights the limited harmonization of data standards, access and exchange within the context of the EU's proactive promotion of smart meter deployment.
Additionally, concerns regarding cybersecurity and privacy risks are identified in (UNECE, 2022b), (Verma et al., 2020).In fact, the development of digitalization needs to progress at the same pace as the development of systems to protect against cyber attacks (IEA, 2021), making cybersecurity a technical requirement to be met before bringing new technologies to market.Finally, it is important to note that the performance of digital technologies can influence energy consumption (Heymann et al., 2022), (IEA, 2017).In particular, (Lange et al., 2020) analysed the trade-off between reducing consumption through service optimization and the simultaneous increase in electricity use due to the deployment of digital devices and economic growth.They found that, in some cases, this balance favoured increased energy consumption.Furthermore, (Murino et al., 2023) highlighted that the increase in data generated by digital technologies requires ever larger data centres, potentially resulting in adverse environmental impacts if not properly managed.

Organizational barriers
These barriers result from organization's structure, culture and processes.They are also described as a "soft" factor, arguably having enduring influence on the successful adoption and effectiveness of new technologies.They encompass the absence of a well-defined digital strategy (Ullah et al., 2021), (Massey et al., 2022), resistance to digital transformation due to cultural factors ( Światowiec-Szczepańska and Stępień, 2022), and the interaction between different organizations both nationally and internationally (Wang et al., 2023).( Światowiec-Szczepańska and Stępień, 2022) highlights that the rapid implementation of digital technologies may not be regarded as a top priority by managers.This suggests that achieving the objectives of digitalization relies not only on technological advances, but also on addressing potential gaps in managerial awareness and competence (Osmundsen, 2020).(Judson et al., 2020) further stress the pivotal role of people driving technological and environmental change within organizations.Moreover, although digitalization brings several benefits, it also causes disruptions in established business models, posing resistance to change, resource allocation and market competition risks (Idries et al., 2022).
Another challenge included in this barrier category refers to the collaboration between DSOs and other stakeholders.In fact, coordinating various stakeholders in digitalization efforts may be challenging due to the diverse interests, trade secrets and complex decision-making processes (Loock, 2020).Finally, organizational barriers also refer to data ownership, storage and sharing.In particular, (Scerri et al., 2020) highlights the absence of suitable data-sharing ecosystems, which further affects the seamless flow of information and collaboration among key stakeholders.The lack of comprehensive legal and ethical frameworks, governance models and trusted intermediaries contributes to this absence.

Regulatory barriers
Regulatory barriers refer to the policy frameworks that shapes the adoption of digital technologies.These barriers often relate to outdated or insufficient regulations that fail to keep pace with the rapidly evolving digital landscape (Malyshev and Kauffmann, 2019), (Ruester et al., 2014).Notably, the lack of clear and consistent standards of digitalization may severely hinder the widespread adoption of the new technologies.We see that this lack of a standard usually occurs in three areas: the interoperability of digital technologies, cybersecurity and data protection, and the definition of roles and responsibilities.
Interoperability is the key to digitalization, since it allows for coordination between actors.(Reif and Meeus, 2022) shows several issues related to the interoperability of smart meters, both technical and political, highlighting case studies in the Netherlands and the United Kingdom.Additional factors influencing smart metering interoperability include the absence of customer consent mechanisms for energy data download and sharing services (SGTF EG1, 2019), the level of detail in data collection to facilitate effective communication (Feuerriegel et al., 2016), and the delineation of roles and responsibilities among entities overseeing data management and processing (CEER, 2023).
Data privacy and security often constitute limiting factors when implementing interoperable solutions of any kind (IEA, 2017).To date, several cyber-security frameworks have been developed (Taherdoost, 2022).However, the approach remains conceptual and has limited actual impact in mitigating risk exposure, making the system dependent on the voluntary initiatives of electrical organizations active in the sector (IEA, 2020).In Europe, a Directive providing for a high common level of cybersecurity across the EU has been launched (Directive (EU) 2022/2555, 2022), and is currently in the process of being transposed into law in the various Member States.Additionally, open-data standards have not been adopted uniformly, which can result in data lock-in, fragmented data formats, inconsistent data quality, etc., as well as limiting interoperability and the integration of digital solutions (Olabi et al., 2023), (Rae et al., 2020).
Another critical concern within the regulatory domain is the need to define clear roles and responsibilities for the various stakeholders, including DSOs, flexibility providers and other actors involved in the digitalization process (SGTF EG3, 2019).There are still many uncertainties about operational coordination, such as that between DSO-TSOs (Hadush and Meeus, 2018b), and with the responsibilities regarding compliance or non-compliance with flexibility contracts (Mlecnik et al., 2020).Establishing transparent accountabilities can create the foundations for effective coordination and ensure that all stakeholders are committed to driving emerging innovative technologies forward (Sousa and Soares, 2023).
Finally, there are challenges in harmonizing regulations across different regions or countries.The rapidly evolving energy sector may witness discrepancies or inconsistencies in regulatory frameworks, leading to fragmented digitalization efforts (IEA, 2017), (Sousa and Soares, 2023).

Economic barriers
Economic barriers refer to the financial challenges affecting digitalization investment.
In general, grid expenditure is governed by diverse incentive mechanisms aimed at funding the operator's costs, ensuring a fair return on investment, fostering cost-efficiency, and enhancing performance (Poudineh et al., 2020).The extent of digitalization investments depends on how these mechanisms are applied to various expenditure categories, including capital expenditure (CAPEX), operating expenditure (OPEX), total expenditure (TOTEX), and innovation spending.
One of the primary drivers of operators' investments is the rate of return (RoR) applied to the Revenue Asset Base (RAB), comprising expenditure items eligible for returns.The RAB typically consists of CAPEX, meaning higher levels of expenditure resulting in a larger RAB eligible for returns.Historically, traditional frameworks like cost-plus regulation have led to overinvestments in capital-intensive solutions, such as grid infrastructure expansions (Pató et al., 2019).The trend to prioritize investments in physical infrastructure over innovative solutions persists today.Recent studies (EU Commission, 2022), (McRobb et al., 2019) have examined the relationship between investments in smart grid technology, physical infrastructure, and grid operators' returns on investment.According to estimates by ACER (ACER, 2021), there's a bias toward investing in conventional capacity, which offers a return seven times greater than innovative solutions.This bias stems from the difference in incentive frameworks and rates of return between OPEX (usually associated with advanced communication and digital infrastructure) and capital expenditure (Rossi et al., 2020).To address this trend, incentive-based regulatory frameworks have been introduced aimed at optimizing expenditure and performance.In Europe, only 6 out of 34 regions continue to use cost-plus regulation, while the remaining 28 employ incentive regulation which focuses on enhancing short-term cost-efficiencies through mechanisms such as ex ante price or revenue caps (CEER, 2022a).However, these incentive structures often prioritize OPEX efficiency, potentially exacerbating the challenges related to digitalization.Hence, the regulatory framework for distribution grid investment appears to skew incentives toward capacity-upscaling rather than investments in digital technology for active grid operations (IEA, 2017), (E.DSO, 2022b).Some frameworks combine CAPEX and OPEX into a TOTEX approach to shift the focus away from capital investment and alleviate the distorting effects of applying a RoR only on some expenditure items (Brunekreeft and Rammerstorfer, 2021).However, relying solely on the TOTEX approach may not completely erase the bias between traditional and digital investments.
Moreover, a significant portion of EU countries lacks a formal framework for innovation spending.Most member states' national regulations either offer no direct incentives for innovation (e.g., Estonia or Hungary) or indirectly promote it through general regulatory frameworks (CEER, 2022a).In such cases, innovation is typically treated separately from the RAB, considered as an OPEX, and subject to applicable incentive regulations.Consequently, innovation may be spurred by anticipated gains in cost efficiencies or improved performance (McRobb et al., 2019), (CEER, 2022b).

Human barriers
These barriers encompass diverse challenges stemming from the attitudes, behaviour and perceptions of individuals within an organization or society.Among these barriers, resistance to change stands out as a notable factor ( Światowiec-Szczepańska and Stępień, 2022).Resistance to change may depend on factors related to the organization and its readiness to change (Chwiłkowska-Kubala et al., 2023), (Trzaska et al., 2021), but it can also stem from elements of the individual's personality.In fact, psychological factors such as technophobia (fear or aversion to technology) (Khasawneh, 2018) and techno-anxiety (apprehension or stress related to using new technologies) (Młody and Weinert, 2020), can inhibit the individual in using new digital technologies ( Światowiec-Szczepańska and Stępień, 2022).Additionally, a deficiency in digital skills (Heymann et al., 2022), (Olabi et al., 2023) poses a significant challenge to both individuals and companies, which need to provide training programmes.Furthermore, concerns around job security facing novel work methodologies contribute to this barrier (UNECE, 2022a).In this regard, a sense of uncertainty and acceptance can affect users and consumers (Rae et al., 2020), further slowing down the digitalization process.
Ultimately, this study uses the six core functionalities and five barriers as a conceptual framework to organize and analyze the field data collected among DSOs' experts, as detailed in the next section.

Data and methodology
This section uses interviews with DSO representatives conducted between March and April 2023 to gather first-hand information on how each of the above barriers affects DSO digitalization.The cross-analysis of the questionnaires serves to gain knowledge on the ranking of barriers (from the most common to the most marginal), which ultimately supports priority action from policy-makers and DSOs' representatives.

About interviews
We conducted 21 semi-structured interviews with DSO representatives, whose individual experience ranged from 11 to 30 years.Participants were asked to provide their informed opinions.The interviews took place in France.For reasons of anonymity and confidentiality, specific information about the DSO cannot be disclosed.The interviewees were approached as linked to the InnoCyPES 2 European Project partners and were selected because they offer a large diversity of inner knowledge with reference to the core functionalities.Table 2 shows the list of the roles occupied by the interviewees at the time of the interview, and Fig. 3 shows their distribution per core functionality.It is important to note that the various functionalities are interconnected, meaning that each respondent may contribute to multiple functionalities through their respective roles.The interviews were built in such a way as to allow the informants to bring up various issues of concern according to the principles and methodology carried out in (Winther et al., 2018), (Burghard et al., 2022), (Sahlberg et al., 2022).The duration of each interview was 1 h.

Interview protocol
The interview guide, which included the questionnaire and background information for the interview, was developed and emailed to the respondents one week prior to the interview.The questionnaire introduced first the study, followed by information about data collection and informed consents.The participants were requested to complete the questionnaire before the interview, and the answers served as preparation for the interview.
The interviews followed a similar format as outlined in the interview guide.Initially, general background questions were asked to understand respondents' roles and competencies.Subsequently, specific questions on barriers to digitalization were posed to gain insights into the main identified barriers and understand respondents' perspectives.These barriers were then discussed in relation to relevant functions to establish a ranking based on the challenges encountered.Following this, concrete examples illustrating how these barriers were manifested in interviewees' activities were gathered.Finally, respondents were asked to provide expert opinions on prioritizing and overcoming these barriers across different DSO functionalities.

Analysis and barrier ranking
Barrier ranking is carried out using the Borda Count method (Emerson, 2013), which has been widely employed in the collection of complex information and their specific classifications (Burghard et al., 2022), (Cai et al., 2017), (Topcu et al., 2019).This method allocates points to each barrier based on the respondent's ranking, which consists of ordering the barriers from one to five per functionality.The mathematical formulation of the method, along with a numerical example demonstrating barrier ranking and criticality assessment for system operations, is provided in Appendix C.
In Fig. 4, the distribution of barriers across different functionalities is depicted based on the application of the Borda method (Sahlberg et al., 2022).This visual representation highlights how the perceived importance of the different barriers varies across functionalities, showing especially that the economic barrier consistently emerges as the most prevalent across all functionalities.It is worth highlighting that not all respondents provided a ranking of barriers for all functionalities.For instance, 19 out of 21 respondents ranked barriers in SO, while only 12 out of 21 provided rankings for CO.Consequently, this discrepancy is reflected in the lower values associated with the ranking of the CO functionality in Fig. 4. To overcome this problem, normalization of the results was performed by adopting the percentile divisions (Bornmann et al., 2013).Table 3 shows the criticality associated with each barrier.The analysis is primarily geared towards evaluating the criticality of barriers within each distinct DSO core functionality.However, it does not extend to comparing the relative prioritization of barrier classes across the different functionalities.In particular, barriers with values exceeding the 66th percentile are classified as critical, while those falling between the 66th and 33rd percentiles are deemed moderate, and those below the 33rd percentile are labelled as limited.
Subsequently, the details of the barriers and their relative challenges were extracted from an in-depth analysis of the interview material.In particular, key quotes from each respondent were extracted and grouped according to the type of information they contained.These quotes were related to the various challenges identified for each barrier analysed.This analysis resulted in a structured overview of the barriers and related challenges according to the type of functionality of the DSOs.Tables provided in Appendix B summarize the main take-aways and highlight the most relevant quotes (q i ) extracted from the interviews and the related respondents (R i ).

Results and discussion
The interviews yielded two primary outcomes.First, the interviews helped identify the most critical barriers, those demanding the highest priority for action within each functionality.Second, the interviews led to the formulation of policy recommendations and measures aimed at mitigating digitalization barriers.
The following sections give a detailed summary of the interviews and present the main findings connecting each functionality to the different barriers.We will delve into the specific challenges associated with each of these barriers, shedding light on the intricate issues that hinder digitalization through the perspective of our respondents.

System operation
Table B.1(Appendix B) shows which challenges are associated with the most critical barriers for each functionality and displays the most relevant quotes from the respondents.
Technical barriers associated with SO can be reduced to four main challenges.First, many DSOs seem to be facing a legacy effect, meaning that new ICT systems should be integrated into pre-existing assets (q 1 ).This may cause compatibility problems when they are already equipped with outdated information systems, which is aligned with conclusions in (Olabi et al., 2023), (UNECE, 2022b).Additionally, DSO's historical infrastructure was built using proprietary technology, which results in difficulties in standardizing digital upgrades across different systems and favours long-term dependence on technology suppliers (q 2 ).Second, the user (un)friendliness of new technologies and the presentation of information remain ongoing challenges (q 3 ).Effectively managing and presenting large volumes of data in an understandable manner is critical, as information overload can lead to decision paralysis for operators.Third, the handling of large amounts of heterogeneous data remains complex (q 4 ) due to technical and cultural factors.The technical factors include the problem of heterogeneous and non-standardized data.For example, GIS data are different from one DSO to another (q 5 ).To normalize and agree on which data to share and in which format raises   significant and widely shared difficulties.The culture of data-sharing refers to the prevailing readiness and ability to share data among different departments and stakeholders.This culture remains minimal (q 25 ), as also pointed in (UNECE, 2022b), (Verma et al., 2020), where data-management systems have different software architectures, and there are no frameworks in force to aggregate and share data properly.Lastly, the cybersecurity barrier type is critical and intertwined with technical, human and economic factors (q 9 ).In particular, cybernetic attacks are a growing concern for DSOs, and it is critical to keep up with how they evolve (q 6 ).Furthermore, the perception of cybersecurity among stakeholders is important (q 6 ).A negative perception further restrains data-sharing, as DSOs do not feel protected in sharing it.Finally, one point deserving of attention in the interviews is the claim made by some experts that, despite growing digitalization, the cybersecurity risk did not increase in recent years (q 7 ), contrary to what stands out in the literature (Heymann et al., 2022).According to R 12 , prior to increasing digitalization, the cybersecurity risk was already regarded as very high, even with only basic data-processing infrastructure in place.
Economic barriers include several barrier types.Digital technologies require high investment costs (q 15 ) and involve a series of subsequent re-investments due to their short life and technological upgrades (q 11 ).Therefore, investment in digitalization is typically considered riskier (q 12 ).This is further amplified by the difficulty of measuring the increased benefits and payback time of the investment (q 14 ).In particular, this echoes what happened with the digitalization of other sectors, such as the real-estate sector (Olabi et al., 2023), (Ullah et al., 2021).For this reason, current Cost Benefit Analyses (CBA) are often limited when assessing the multiple benefits of digitalization, leading to opting for conventional investments (q 15 ).This prioritization of conventional investments also depends on the fact that DSOs' expenditure is regulated and that grid tariffs should be kept low (q 16 ).The lack of direct incentives for digitalization, such as bonuses, e.g., for smart-meter deployment, have shown to restrict rollout (q 18 ).Moreover, some respondents pointed to the sometimes less favourable financial conditions offered by banks for digital projects that are considered to present a higher risk than traditional capital investment (q 20 ).
Human barriers were seen as having far-reaching economic and organizational implications by respondents.First, a shortage of specialized skills is a major issue.Developing secure, scalable, energyspecific digital solutions demands a unique blend of digital and electro-technical expertise (q 21 ).According to the experts we interviewed, this mixture of skills is currently lacking (q 24 ), as also pointed in (Olabi et al., 2023), (UNECE, 2022b).One of the main reasons mentioned for this is that such qualified personnel prefer to move to the IT sector, which offers higher salaries (q 23 ).This ultimately causes a dependence on expensive consulting services (q 22 ), inflating digitalization costs.

System management
Table B.2 (Appendix B) shows the main barriers highlighted for system management, where organizational, regulatory and economic barriers are the most critical.
Concerning organizational barriers, respondents emphasized the struggle DSOs face in balancing internal efficiency with crossorganizational collaboration.They noted that digital transformation needs to extract value from data across the organization, which necessitates a change in both mindset and business line (q 26 , q 27 ), and stresses the current difficulties in connecting and fully utilizing the control, command, operating and metering chains (q 28 ).Even with advanced technology, the interviewees acknowledged the inherent limits of integration and the lack of a comprehensive digital strategy that would enable it (q 28 ).R 5 highlighted the importance of demonstrating the value of data-sharing to the organization and society.Building trust and showcasing collective benefits were seen as crucial elements of this process (q 29 ).R 8 further emphasized that adapting to new processes and tools is a time-intensive task requiring careful change management (q 30 ).Finally, the interviews pointed out that the priorities in system management may shift due to external factors like regulatory and economic conditions, requiring strategic decision-making adaptability in response to fast-evolving energy uses and services (q 31 ).Regulatory barriers in system management digitalization refer to interoperability challenges due to the lack of industry-wide standards and regulatory support.Currently, we observe an extensive development of proprietary solutions as opposed to open standards.This increases dependence on the supplier and in the long run limits integration (q 37 ).In addition, respondents raise a lack of regulatory support for promoting the digitalization of low-voltage grids that favours decentralizing responsibilities to the end consumer.This is because the current model of flexibility market development assumes that each actor acts seamlessly.However, uncertainties arise regarding roles and responsibilities if the market fails to function and independent actors do not meet their obligations (q 38 ).It's worth noting that efforts are underway to address these concerns.On 9 March 2023, the EU Commission invited E.DSO 3 and ENTSO-E 4 to submit a proposal for the network code on demand response (E.DSO & ENTSO-E, 2023) following the relevant framework guidelines developed by ACER 5 (ACER, 2022).However, this initiative is still in the development phase and has yet to be finalized.Economic barriers in system management, similar to those previously discussed in 4.1, also create long-term uncertainty.This challenge relates to allocating investment between physical infrastructure and digital solutions for the development of the network (q 32 ).The different lifespans of investments (q 33 ), considerations involving the integration of renewables, and industrial and demographic development policies (q 35 ) often tilt the balance toward conventional investments, as also observed at the transmission-grid level (ACER, 2021).Here again, respondents suggest that CBAs have too limited a scope and should incorporate more community-oriented considerations (q 36 ).For example, involving local governments in the evaluation process can lead to a more holistic assessment, clarifying community benefits and better aligning digital investments with local requirements and gains.Technical barriers in network planning are mainly linked to the existing infrastructure.The state and sizing of the grid appear to be critical decision-making factors for the adoption of digital technologies.Specifically, the respondents indicate that the interest in digitalization decreases with the level of overcapacity of the grid (q 39 ).
Regarding regulatory barriers, respondents insisted on the intricacies between investments and the development of local flexibility markets and the attribution of responsibilities in the event of system failure (q 40 , q 41 ).In particular, the absence of regulation for decentralized flexibility markets, along with unclear responsibility frameworks among DSOs and other stakeholders (e.g., final consumers, aggregators, etc.), dissuades DSOs from committing to digitalization efforts, as they may not harvest the gains of their investment.To tackle this issue, the EU Commission is in the process of developing a new network code for demand response (E.DSO & ENTSO-E, 2023).In this regard, several respondents stressed that, even with a well-structured flexibility market, there remains uncertainty about whether sufficient sources of flexibility could be procured to meet the local network's requirements (q 42 , q 43 ), as also reported in (Rebenaque et al., 2023).
Economic barriers associated with this functionality are similar to those described for system operation and system management in 4.2 and 4.3.Respondents mentioned concerns regarding the uncertainty of digitalization investments, due to their relatively high costs and extended payback periods.This results in preferring investments in conventional infrastructure.However, it is important to stress that decisions in this functionality are influenced by the state and development plan of the network.Network oversizing tends to support the integration of new users and DERs (q 44 , q 45 ).This also contributes to prioritizing conventional investments rather than digital infrastructure in favour of the development of flexibility markets.

Asset management
According to the respondents, the digitalization of the asset management function is primarily impeded by technical-economic and organizational barriers (Table B.4, Appendix B).
Technical barriers mainly refer to the difficulty of handling large data volumes (q 46 ).This requires data organization, categorization and metadata creation building on adapted shared data-management systems, which are currently lacking, as also noted in (Olabi et al., 2023), (Massey et al., 2022).
This influx of data further creates organizational challenges (q 47 ) related to internal confusion or uncertainty of who should be responsible for managing centralized data lakes.The digitalization action plan outlined by the European Commission aims to tackle this criticism, but it is still in the development phase (EU Commission, 2022).
Lastly, investment in digitalization of this functionality also requires substantial technical-economic considerations.Notably, investing in extensive data collection, as for transformer monitoring, incurs a cost.This trade-off reveals the importance of striking a balance between monitoring expenses and the economic gains from prolonging asset lifespan (q 49 ).Excessive investment may reach a point of diminishing returns, where the additional costs outweigh the economic efficiency of extending the asset's life.Another economic consideration is the fact that the traditional cycle of financial planning (or the regulatory period), typically occurring once every four years, may be limited to keep up with the pace of digitalization.The ever-changing landscape of technology, along with evolving personnel skillsets, necessitates a more adaptable and responsive financial approach.

Flexibility management
The relationship between digitalization and flexibility in the electricity network is interdependent.Without digital technologies, the ability to incorporate and utilize flexibility resources would be significantly limited (q 50 ).In this context, the barriers are identified indirectly by examining factors that prevent grid operators from investing in flexibility, which in turn affects the need for digitalization.Critical barriers are rooted in regulatory and economic factors (Table B.5, Appendix B).
The regulatory and economic considerations are similar to those made with network planning in 4.3.In particular, decentralized flexibility market development is limited due to limited engagement by local flexibility sources, location constraints and ambiguity over supply responsibilities (q 52 ).According to respondents, DSOs are concerned about the uncertainties associated with flexibility projects.This is because the quality of electricity supply also depends on third parties providing flexibility services.In particular, if these parties fail in their obligations, accountability is unclear (q 51 ).

Commercial Operations
The analysis highlights challenges related to human and economic factors, such as addressing potential job losses and investing in staff training (Table B.6,Appendix B).For DSOs, the interface with the end user is becoming increasingly critical.The increasing number of network connections requires advanced communication between the DSOs, the grid users, and any enabling parties, such as energy service providers.Therefore, conversational AI constitutes a promising avenue for DSOs to enhance their customer relationships (q 55 ).However, this shift raises concerns about employees' roles and job security, requiring retraining efforts (q 53 , q 54 ).As a result, respondents identify a growing need for change in staff management strategies to understand how to harness the potential of new technology for commercial applications without overburdening the workforce.

Conclusion and policy implications
This research presents a comprehensive examination of the barriers to the digitalization of distribution grids, with a specific focus on the technical, organizational, regulatory, economic and human barriers.By merging insights from the existing literature with the expertise shared by European DSO representatives, we generate new knowledge on the multifaceted digitalization challenges faced by DSOs.In what follows, we propose a cross-cutting analysis of the barrier types and suggest policy recommendations.The barriers are ranked by order of criticality.Table 4 provides a comprehensive overview of the identified challenges and corresponding policy recommendations and measures to address the barriers to digitalization.

Policy recommendations and measures for DSOs digitalization
Economic barriers are the main impediment to the digitalization of distribution grids.To address this challenge, several policy measures can be implemented.
First, the introduction of remuneration bonuses for digital investments seems to be critical to their early adoption (q 18 ).This can be achieved through mechanisms such as granting mark-ups or premiums to incentivize investments in digital solutions, as evidenced by successful initiatives like smart meter deployment (Rafael et al., 2019).Additionally, renegotiating rates of return on digitalization projects can further incentivize DSOs to prioritize digital solutions over conventional ones.This is the case, for example, with bonuses or with the sharing of benefits generated by a new investment (e.g. a more efficient asset) or new operating mode.Furthermore, strengthening support measures for innovation expenses, which are currently limited in Europe (CEER,  Secondly, implementing new incentive-based regulations can enhance digital investment and advanced grid operation (McRobb et al., 2019).Recent studies demonstrate that leveraging available data granularity can mitigate information asymmetry between regulator and operator, enabling the establishment of new performance parameters based on component failure risk (Sundsgaard et al., 2023).However, a notable challenge lies in the absence of specific Key Performance Indicators (KPIs) for digitalization.Defining these parameters would facilitate targeted investments by DSOs and enable regulators to reward digital achievements.
Thirdly, renegotiating capital costs with banks, this emphasizing digitalization, could address the funding gaps for digital projects (q 20 ).For instance, the issuance of green bonds for sustainable investments serves as a positive model (EU Commission, 2024).Exploring innovative financial tools like digitalization bonds, which offer reduced capital costs, could further support digitalization initiatives.
Finally, new CBA methodologies should account for the broad and evolving benefits of digitalization from a systemic viewpoint (q 36 ).As the benefits of digitalization investments often extend beyond DSOs to various stakeholders, enhanced CBA frameworks aim to capture and report this added societal value (Leiva Vilaplana, 2023).This may entail closer collaboration with local authorities to enrich the analysis process.
Regulatory barriers rank second in terms of criticality, marked by a lack of clarity in defining roles and responsibilities within a decentralized flexibility-based market.Uncertainty surrounding stakeholder obligations, including flexibility energy-service providers and customers, poses risks to power supply security and quality if obligations are not met (q 38 , q 51 ).This ambiguity hampers DSOs' pursuits of digital investments and advanced grid operation initiatives and impacts on datasharing willingness due to the absence of a clear responsibility framework (q 5 ,q 46 ).While the EU Commission is addressing these issues by developing the network code for demand response (E.DSO & ENTSO-E, 2023) and data-sharing (EU Commission, 2022), further recommendations include establishing a contract performance monitoring system for flexibility providers and implementing monitoring systems to ensure DSO compliance with digitalization requirements and address non-compliant behavior.
Additionally, the prevalence of proprietary digital solutions poses a risk of long-term dependence on technology providers(q 2 ), underscoring the importance of adopting open standard solutions to ensure interoperability and flexibility(q 37 ).Thus, standardizing solutions for grid digitalization is crucial, involving the discouragement of proprietary solutions and promotion of open standards to enhance transparency and collaboration among DSOs and grid stakeholders.
Regarding the organizational barriers, we found that siloed organizational structures, prioritizing efficiency in individual tasks but sometimes at the expense of wider information-sharing, significantly limit the emergence of a digital strategy at the firm level (q 26 ).Promoting a cultural shift towards data-sharing is essential, alongside the establishment of cross-functional teams dedicated to digitalization initiatives, thereby enabling better identification of opportunities, obstacle resolution, and innovation (q 27 , q 28 ).
Moreover, building trust around data-sharing and demonstrating the collective benefits for the DSOs, its ecosystem and society are essential components of this process.In this context, organizational learning plays a crucial role, as adapting to new processes and tools takes time and requires dedicated change management (Fichter, 2019).Therefore, it is crucial to cultivate a culture of openness and collaboration among DSOs and grid stakeholders.Launching targeted awareness campaigns can educate stakeholders about the advantages of data-sharing and make them more inclined to support this cooperative mindset(q 29 ).Also, the establishment of comprehensive industry-wide guidelines and standards for data management and sharing is vital (Olabi et al., 2023), (Massey et al., 2022).Standardization not only simplifies the sharing process, it also reinforces trust among industry players.Besides, enhancing cooperation, both between DSOs and with the other grid stakeholders, is a requirement for the seamless integration of digitalization initiatives.
Technical barriers present several challenges.Primarily, operating aging infrastructure complicates the integration of new technologies (q 1 ), worsening interoperability issues.Open standard solutions can alleviate this challenge by facilitating interoperability and simplifying the integration of digital solutions with legacy systems.Notably, the International Electrotechnical Commission is developing a roadmap to promote the establishment of standards for power systems management and associated information exchang (IEC).However, it is still under development.
Second, overly complex systems can result in information overload (q 3 ).Developing user-friendly real-time information systems is essential to enable operators to effectively utilize digital tools.Establishing collaborations with technology providers to design intuitive information platforms can enhance user experience and facilitate seamless integration into existing workflows.
Third, the complexity arising from the sheer volume of data necessitates robust data-management frameworks, which are currently lacking (EU Commission, 2022).Additionally, cybersecurity poses a significant challenge, driven by a lack of available digital skills (q 8 ).Developing cybersecurity quality certifications can mitigate these risks.
Lastly, human barriers slow down digitalization, primarily due to the lack of requisite skills (Olabi et al., 2023), (UNECE, 2022b).There is a crucial need for specialized expertise in both digital and electro-technical domains to effectively align strategic grid objectives with digital system implementation (q 21 , q 24 ).Moreover, attracting digital-skilled professionals to the field is challenging, as many are drawn to more financially rewarding roles within the IT sector (q 23 ).Furthermore, addressing concerns about job displacement due to automation demands investments in upskilling and the development of a future-ready workforce.Policy recommendations include the promotion of life-long learning initiatives to equip professionals with the necessary skills.Establishing cross-cutting partnerships between energy stakeholders, technology providers and academia can facilitate knowledge transfer and foster digitalization in power distribution systems.

Future avenues for research
This study presents a first step towards a better understanding of the driving forces and main barriers to the digitalization of distribution networks and maps out policy solutions in response to our main findings.This knowledge basis aims to serve as a foundation for future comparative studies.Notably, the criticality of the economic factor that emerged from our interviews indicates that further research is necessary to gain a comprehensive understanding of how regulatory-defined remuneration mechanisms for DSOs influence their investment decisions regarding digitalization.We also show that a collective effort from multiple decision-makers and policy bodies is required to build a "digitalization-friendly" framework, ranging from basic workforce training to the establishment of appropriate standards.
Ease of use • "It is difficult to simplify all the information to make that manageable by a human." 3 14 Data management • "We can retrieve data, but then there is a problem of how to describe all this data and how to manage all this data."4 1  • "We have not yet succeeded in connecting and exploiting the connection of the controlcommand-operating and metering chains.Internally, it is important to connect these channels and the organizations that manage them in order to serve a clear digital strategy."

16
Data management • "People have to be sure that with this data, we create some value.And accepting to let this data be processed by other people.We will have some benefit for the company, the entire society, the electricity system." 29 5

Organizational learning & adaption
• "It takes time to change the organization and teach people about the new process and tool."• "Flexibility market organisation among stakeholders is still unclear" 40 18 • "Flexibilities for the distribution network are and will remain rare.We are asked to develop them for the LV network when there doesn't exist a very local flex market."41 17 • "The problem for the market players is to find customers who accept in this place to participate in the flexibility."42 17 • "It is difficult to retrieve local flexibility providers."43 19 Economic CBA & Prioritization • It is difficult to prioritize this type of investment when it is particularly a question of connecting ever more renewable energies or new uses which constitute the bulk of our investments."44 16 • "The Grid will evolve according to demography, but also according to the development of Renewables, Electric Vehicle connections, and decarbonization of applications like heat pumps."Appendix C. APPLICATION OF THE BORDA METHOD

Mathematical formulation
Barrier ranking is carried out using the Borda Count method (ACER, 2022), which has been widely employed in the collection of complex information and their specific classifications (Bornmann et al., 2013), (Rebenaque et al., 2023), (Rafael et al., 2019).This method allocates points to each barrier based on the respondent's ranking.Ranking consists of ordering the barriers from one to five per functionality.
In this paper, barriers are classified in the categories technical (T), organizational (O), regulatory (R), economic (E), and human factors (HF).Likewise, the list of functionalities includes the categories: f ∈ {SO, SM, NP, AM, FM, CO}.
The final score, (x b,f ), associated with each barrier (b) within the core functionality (f) is given by Eq. ( 1).
where i represents the index identifying each individual respondent out of the total 21 respondents, n ∈ {0, …, 5} is the score attributed to each barrier within the corresponding functionality, according to the conditions outlined below: where (m) is the index describing the number of barriers that the respondent ranked per functionality.
A distinction is made between partial and complete voting (see (Emerson, 2013)).In the case of complete voting, m = 5, the respondent ordered all barriers.Hence, the barrier ranked first received n = 5, the second n = 4, whereas the barrier ranked last received n = 1.In the case of partial voting, 1 ≤ m ≤ 5, the respondent only ranks some barriers.In this case, the barrier ranked first receives a score equal to m-1, the last one equal to 1.The remaining non-ranked barriers received 0 points.

Numerical Example of the application of the Borda Method and Ranking
The respondents associate a ranking (order from 1 to 5) to the barriers as it is shown in Table C • From this ranking, the respective n 1,B,SO for the barriers within System operation for R 1 (Partial voting, m = 3), is: Iterating for all the barriers in SO, we obtain the final barrier ranking as it is shown in Table C

Normalization and criticality assessment
To normalize the values obtained using percentile division, we utilized the Excel function INC.PERCENTILE. 6This function facilitated the consideration of specific percentiles, particularly the 33rd and 66th percentiles.The INC.PERCENTILE function in Excel calculates the k-th percentile of values in a dataset, inclusive of the value at the k-th percentile.
Here is the basic logic behind how it works:

Fig. 1 .
Fig. 1.Requirements like decarbonization and electrification but also possibilities of the digitalization lead to a growing responsibility of DSOs in the future (own representation based on (IRENA, 2019a)).

Table 2
List of respondents.

Table 3
Barriers criticality per functionality according to DSO expert interviews.Table B.3 (Appendix B) illustrates the main barriers identified by the respondents, centred around technical, economic and regulatory issues.

Table 4
Policy recommendations and measures to overcome digitalization barriers.

Table A .
• "It is a hard work to integrate data.Ex: GIS are really different from one DSO to another.To normalize and agree on which date to share is a challenge." • "Digital investment must be faced case by case.Still unprofitable within the CBA framework, especially at LV level."17 17 Lack of funding • "Monopoly frameworks hinder this type of investment.A remuneration bonus on investments in digitalization is missing." 18 21 (continued on next page) R. Monaco et al.

Table B .
• "The cycle of finance once every four years, it is very long for digitalization.It is difficult to clarify how much money is needed within four years.This is because the development and cost of technology is changing very fast."Nowadays organizations are built to be efficient in a business life, but not efficient in sharing anything.Because all the energy is devoted to do the job and not to do the job with others."• "To get value from transfers across organization activity like data, organisation need to change.You have to change your mind or mind of this business line, and then you have to provide a new scheme to be able to work in cross-organization for those kinds of activities." • "For system management the priorities could be different cause more external factors could play a role.For example, you need to deal with other stakeholders with different interests."

Table B
We can invest in IT technology to retrieve granular assets data, but then there is a problem of how to describe all this data and how to manage all this data."It is difficult to merge all the datasets in a single data lake.Then who is responsible for It?" 47 18EconomicFinancial Planning• "The cycle of finance once every four years, it's very long for digitalization.You cannot say clearly how much money you need within four years because the technology is changing, the cost of the people is changing, everything is changing very fast, especially regarding digitalization."487•"If you do a lot of monitoring, then you have to stop at one point because it will cost more than the benefits you will have by increasing the lifetime of your transformer.You cannot invest as much as you want because at one time there is no benefit, you have got all the increase of the lifetime, and you cannot have more or maybe the plus you have is not efficient economically."Flexibilitymanagement is by itself already digitalised.If you want to do It, you need to invest in digitalization, no matter how."50 17• "Is not very clear yet on how we're going to handle flexibility and how and what will be the role of the DSOs in that area."Prioritization • "At present, pushing for flexibility is still uncertain.Few sources of flexibility have participated in our tenders, and there is also the constraint of location.In addition, there is little clarity on the definition of supply responsibilities."It is difficult to have both the knowledge of the business and the IT.Change management in existing organizations is fundamental and costly."