The pressure on Europe’s electricity grids is mounting as electricity demand rises. Grid operators need to be able to connect more customers, expand the grid and make better use of the infrastructure that’s already in place. At the same time, technical expertise and delivery capacity are scarce. That means the challenge is not just building more capacity – it is also about organising the system around availability, performance and the smarter use of existing assets.
This is where leasing assets comes in, particularly for asset categories such as distribution transformers and Ring Main Units (RMUs). Instead of buying assets outright, a grid operator can contract the functional use, performance and lifecycle support of certain assets, so that specialist maintenance and asset expertise remain closer to the manufacturer.
For grid operators, the leasing of assets enables more condition-based maintenance and the efficient allocation of costs, expertise and risks. It also means the data-backed use of available overload capacity and supports the shift towards more data-driven grid operations.
Leasing is not some futuristic concept. For selected asset categories, the building blocks already exist, such as digital monitoring, service-based contracts and manufacturers with the operational capabilities to be able to support assets throughout their lifecycle.
The value of leasing: from ownership to lifecycle performance
Leasing supports operational excellence. Manufacturers have detailed knowledge of the design limits, inspection intervals, servicing requirements, the ageing of assets and response to loading. Keeping them involved for longer can improve asset performance, reduce avoidable failures and create more room for planned, condition-based maintenance.
It also lowers total cost of ownership for grid operators. Grid expansion and asset management require significant investment, expertise and resources. By spreading costs over time and assigning part of the lifecycle responsibility to the manufacturer, a leasing model enables grid operators to be able to allocate assets, expertise, resources and risk across the asset lifecycle more effectively.
Leasing can also expand grid capacity. Assets are overengineered and are capable of handling an overload for a defined period of time. Leasing provides the manufacturer access to the asset data, which enables the manufacturer and grid operator to collaborate and jointly validate the asset’s overload capability and determine its operating limits.
Leasing aligns with the future role of the grid operator. The grid operator is shifting from being an asset-intensive organisation towards becoming a data-driven system operator that proactively monitors and steers grid performance remotely. Leasing supports that shift by moving the conversation from ownership to availability, interoperability and results – the grid operator effectively becomes a data-driven system orchestrator.
The technical basis for asset leasing
Manufacturers’ expertise underpins the technical framework for asset leasing. Manufacturers have product-specific knowledge of design limits, failure modes, degradation and maintenance needs. And this knowledge allows them to make consistent assessments of the asset condition, performance and the remaining life of the asset for the duration of the lease.
In a leasing scenario, product passports are necessary to ensure that the asset history is evident. A product passport acts as a structured record for an individual asset, including its configuration, maintenance history, load patterns, incidents and relevant lifecycle changes. For asset leasing, this creates a shared factual basis for both grid operator and manufacturer by which decisions are supported on performance, remaining life, warranty, maintenance responsibilities and redeployment.
Digital twins are essential to provide the evidence that’s needed for performance-based asset leasing. The manufacturer’s knowledge of product-specific loading profiles, ageing effects and maintenance scenarios enhances existing digital twin models, giving grid operators a stronger evidence base for decisions about risk, replacement and lifecycle value.
And virtual recommissioning is needed to keep leasing under control. It uses asset data and simulations to go beyond specifications and validate how an asset will perform in a specific application before installation, redeployment or change to operations. In a leasing context, this provides a shared basis for agreeing on operating limits and responsibilities before the asset enters or re-enters service.
So what does it take to make leasing work?
There are certain factors that are essential to making sure leasing works. Safety is one. And this is a non-negotiable. Safety responsibilities can be delegated, but the accountability for secure, resilient and reliable grid operation has to be clear. Contracts should define who is authorised to act and who bears responsibility for a problem – for example, if an intervention causes an outage, which could have serious repercussions.
Data exchange is another essential. Leasing requires interoperable and cyber-secure data exchange within the grid operator’s operational environment. As operational data is central to its core business, the grid operator has to stay in control, while manufacturers only access what they need. Standardised approaches such as asset administration shells can support this exchange.
And governance is vital to safeguard operational continuity. Assets remain in service for decades, while suppliers may fail, withdraw services or restrict access to critical data. Any viable model must guarantee that the grid operator can continue to operate, maintain and access the data of the asset under any circumstance, supported by enforceable step-in rights, exit arrangements and safeguards against vendor lock-in.
And a final step in making leasing work is starting with controlled pilots. The most realistic route is not a full shift overnight, but a limited pilot model focused on promising asset categories where the benefits of leasing are the greatest, such as distribution transformers and RMUs.Work with performance-based contracts that make safety, availability, cyber security, lifecycle responsibilities and cost expectations explicit.
Leasing assets is not a silver bullet. Yet for grid operators facing increasing pressure to expand, optimise and modernise their networks, the question of who should own, manage and optimise grid assets deserves serious consideration.
Want to know more?
Asset leasing is just one part of the transformation. Explore our vision for the grid operator of the future here: Grid Operator – Valcon
At Valcon, we combine deep sector knowledge with a practical understanding of operations, technology, data and governance. That allows us to bring the right perspectives to the table and help grid operators explore where models like this create real value. Curious to explore what it takes? Please contact Koen Hasperhoven at [email protected] or Marco Willems at [email protected].
Grid Operator of the Future
