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Shaping Europe’s digital future

Digitalisation of the European Energy System

Interoperable and open digital solutions, as well as data sovereignty, are key to the digital transformation of the energy system.

graphic with legend 'Energy System Digitalisation'

© image by bsd555 - Getty Images/iStock

To support a successful digital transformation of the energy system, Europe needs state-of-the-art digital solutions, a reliable smart grid infrastructure and a data ecosystem, governed by the principles of interoperability, openness, and data sovereignty.

The EU aims to reduce net greenhouse gas emissions by at least 55% before 2030, compared to the levels in 1990. Achieving these reductions in the next decade is crucial to Europe becoming the world’s first climate-neutral continent by 2050, fulfil the European Green Deal, meet the commitments of the Paris Agreement, and lead the fight against the impacts of global warming. This will all be achieved through the greater use of renewable energy sources and increased energy efficiency.

The energy system will therefore have to continue its profound transformation, which requires among others to bridge the energy and the digital economy. Today’s energy system is still heavily reliant on fossil fuels. By 2050, the share of electricity in final energy demand will rise to 53%, with over 80% of electricity from renewable sources. Moreover, the traditional consumer landscape will change into an electricity system that includes ever-increasing distributed generation and storage.

Simplified use case for system integration and the optimization of renewable energy production and usage: electric vehicles and smart buildings connected to the electricity grid.Figure 1: A simplified use case for system integration: electric vehicles and smart buildings connected to the electricity grid. © European Commission, hakule - iStock GettyImages Plus (IoT), Open DEI (Design Principles for Data Spaces)

 

Digitalisation and energy

An IoT-supported smart energy system can bring significant energy efficiency benefits for consumers by providing the appropriate tools for understanding and better managing their energy consumption or production and storage, in times of increasing shares of renewables, decentralised generation and new loads such as electric vehicles. In addition, the use of the Internet of Things (IoT) in smart grids can play a significant role in improving operations, management and integration for fuel cell technologies used for energy harvesting in buildings.

Digitalisation is also changing markets, businesses, and employment; new business models are emerging whilst some century-old models might be on their way out. On the other hand, it raises new security and privacy concerns for companies and individuals, which need appropriate consideration.

 The advantages of digitalising the energy system: Decrease in greenhouse gas emissions; Pan-European market and interoperability; Improved operations, safety, productivity, accessibility, and sustainability of the energy system; Higher shares of renewable energy sources into the grid; Increased grid stability and reliability; Saved costs for consumers and energy companies; More control to consumers with demand-side flexibility at home.

 

 The limiting factors: Slow rollout of smart meters (discrepancies among Member States) and limited access to smart meter data; Slow digitalisation of electricity grids and limited digital energy services; Lack of digital skills and culture in the energy community; Limited adherence to commonly agreed standards and interoperability; Access to as well as use and reuse of data; Complex cross-sector and cross-domain data exchange.

 

To reach these ambitious objectives, the European Commission has updated its climate and energy policy framework in the fit-for-55 climate package. This package contains policy measures to reach the EU’s targets, including the revision of the Energy Efficiency and Renewable Energy Directives. The Commission has also proposed a Path to the Digital Decade, a concrete plan to achieve the digital transformation of our society and economy by the year 2030.

Finally, over the last months, the Commission reflected and gathered experts’ advice on a Digitalisation of Energy Action Plan, as one of the key actions to accelerate the implementation of digital solutions in energy, for a better-functioning, smart, integrated and interconnected energy system. The plan will also support the implementation of REPowerEU, the joint action for affordable, secure and sustainable energy.

 Digital technologies contributing to the  energy system transformation: Artificial Intelligence (AI); Internet of Things (IoT); Decentralised Edge Intelligence; 5G Connectivity; High-Performance Computing (HPC); Blockchain.

 

 Who will benefit: Consumers; Utility companies; ICT companies; Energy service companies; Application providers; System integrators; The planet.

 

All of these will pave the way for the ongoing twin digital and green transformation of the energy system to benefit from advanced digital solutions with a lower environmental footprint and higher energy and material efficiency, leading to a more resilient, efficient, and greener energy system.

A graph to show DG CONNECT support actions for the digitalisation of energy from 2020-26. Policy & regulation: smart grids task force (co-chaired by DGs CONNECT & ENER). Policy & strategy: digitalisation of energy action plan. Standardisation: SAREF (smart appliances reference ontology) – SAREF4Energy, ICT standardisation rolling plan (smart grids & IoT chapters). Coordination: bridge cluster of smart grids & storage projects – data management working group. Cross-sector/system-level interoperability. Energy-efficient cloud & data centres. Horizon 2020 (deployment, 2020-23): digitising European industry, large-scale pilots in energy. Horizon Europe cluster 5 (innovation, 2022-25): replicable solutions, interoperability & energy data space. Horizon Europe cluster 4 (research, 2022-26):cloud-edge-IoT (metaOS & swarms) – horizontal with vertical se cases (energy, mobility, buildings). All deployed ICT infrastructures should be sustainable. Digital Europe (deployment, 2023-24): energy data space, energy-efficient cloud-edge.  Connecting Europe Facility – Digital (infrastructure, 2022-26): operational digital platforms for the energy sector, energy-efficient cloud-edge.

Figure 2: the Directorate-General for Communications Networks, Content and Technology (DG CONNECT) support actions for the digitalisation of the energy system. © European Commission

 

Cooperation is key for Europe’s success

In order to achieve true excellence in the digitalisation of energy, cooperation is paramount. Public administrations need to work together, for instance through national or regional industries for energy in terms of digitisation and digital infrastructures. Through excellent, effective and close cooperation between the European Commission’s Directorate-General for Communications Networks, Content & Technology (DG CONNECT) and Directorate-General for Energy (DG ENER), the EU is showing an example to other relevant stakeholders from both the public and private sectors and civil society, in areas such as legislation, standardisation and interoperability, cybersecurity, sustainable ICT, R&I and deployment.

 

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