Digitalising Europe’s energy sector – the strategy

Digitalising Europe’s energy sector – the strategy
Image credit:

The European Commission has released its action plan for digitalising the region’s energy sector to improve efficiency and renewables integration.

Digitalisation, one of the four ‘D’s of the energy transition, is as the ‘enabler’ central to its realisation, cutting across businesses, consumers and technologies alike.

The EC’s action plan, more than a year in making, has six key goals, namely:
• Promote connectivity, interoperability and seamless exchange of energy data;
• Boost and coordinate investments in the smart electricity grid;
• Provide better services based on digital innovations to engage consumers;
• Enhance cyber security of the energy system;
• Ensure that the growing energy needs of the ICT sector align with the Green Deal;
• Design effective governance and continuous support for research and innovation.

The aim is to make our energy system more efficient and ready for increasing share of renewable energy sources,” commented Commissioner for Energy, Kadri Simson.

“For this, we need more innovative digital solutions and a grid that is much smarter and more interactive than it is today. [The] Action Plan will help unlock the potential of digitalising the energy sector and the important energy savings that this can provide, benefitting all consumers.”

Have you read?
Europe’s power system – vision for carbon neutrality
Exclusive: Using digitalisation to achieve net zero infrastructure in power and renewables
Kadri Simson reveals urgent next steps to accelerate energy transition

Sharing data

To coordinate data exchanges, a common European energy data space is planned, which will need to start its deployment no later than 2024 with governance in the form of a coordinated European framework for sharing and using the data.

To support this activity, the Smart Grid Task Force will be formally re-established and renamed the Smart Energy Expert Group, which in turn will set up a ‘Data for Energy’ working group no later than March 2023.

Responsibilities of this D4E group, which will be comprised of EU-wide public and private representation, will include developing a portfolio of high level use cases for data exchanges in energy, including flexibility services for the energy markets and grids, smart and bi-directional charging of electric vehicles and smart buildings.

With smart metering a ‘building block’ for data, member states are called upon to speed up their rollouts towards full deployment. Where a previous cost-benefit analysis concluded against the rollout of smart meters, these should be revisited and re-run in the light of the Green Deal and REPowerEU.

Other initiatives include acts on interoperability requirements and a code of conduct for smart appliances to boost participation in demand response schemes.

Promoting investments

The EC estimates an investment of €584 billion in the electricity grid is required between 2020 to 2030, of which around €400 billion is in the distribution grid, including €170 billion in digitalisation.

The key activity to support this investment is the creation by EU TSOs and DSOs of a digital twin of the European electricity grid, which should be set in motion with the signing of a declaration of intent between ENTSO-E and the EU DSO Entity.

Its creation, a long term activity, will require coordinated investments in five areas, viz observability and controllability, efficient infrastructure and network planning, operations and simulations for a more resilient grid, active system management and forecasting to support flexibility and demand response and data exchange between TSOs and DSOs.

Other requirements for investments include a regulatory framework that is fit for purpose in place by 2023.

Benefits for consumers

The EC states consumers as front and centre in its efforts to digitalise the energy system.

Key proposals are a legal framework that empowers and protects consumers, with a fitness check of EU consumer law on digital fairness currently under way, and the creation of digital tools that reflect demographic change, for example the increasing numbers of older consumers who may need to be specifically supported in the digital transition.

Energy communities and local energy initiatives are another approach for engaging consumers and the Commission intends to shortlist and produce guidance on energy sharing and peer-to-peer exchange and to develop an experimentation platform to test and simulate energy communities in combination with activities such as blockchain-based energy trading.

Workforce skills also are addressed with the establishment by the end of 2023 of a large-scale partnership on the digitalisation of the energy value chain as part of the EU’s Pact for Skills.

Follow the latest news from the EU Commission on Enlit World’s EU Project Zone


The EC intends alongside ongoing activities to strengthen the cybersecurity of the energy system, to prioritise the identification of specific ICT services, systems or products that might be subjected to coordinated risk assessments, in particular in the renewable energy and grid supply chain, including offshore wind.

In parallel, there will be proposals for an act in the form of the network code for cybersecurity aspects of cross-border electricity flows and another on the cybersecurity of gas and hydrogen networks.

The Commission also is proposing a Council recommendation to improve the resilience of critical infrastructures in energy and other priority sectors against possible physical, cyber or hybrid attacks, while a legislative proposal has been adopted for harmonised cybersecurity rules for the placing on the market of products with digital elements.

ICT sector energy consumption

With the energy consumption of the ICT sector on the rise with for example the growth of data centres and crypto mining activities, ensuring that these needs are met in synergy with the climate neutrality objective is an essential part of the transition, the EC states.

Specific actions include an energy labelling scheme for computers and by 2025 a code of conduct for the sustainability of telecommunications networks and an environmental labelling scheme for data centres.

The EC also intends to promote the reuse of waste heat from data centres to heat homes and businesses, including funding research and innovation into systems for waste heat storage during the summer season for reuse during the winter.

Alongside this the Commission intends to develop an energy efficiency label for blockchains and by 2025 to report on the environmental and climate impact of new technologies in the crypto-asset market, including an assessment of policy options to mitigate adverse impacts.

In the meantime, member states are urged to implement targeted measures to lower the electricity consumption of crypto asset miners.

EU-wide coordination

With its aim to deliver on the EU’s digital and green policy objectives, the EC proposes to prioritise support for the twin transition synergies through the main frameworks for member state planning, closer cooperation at EU level between public authorities and between energy and digital stakeholders and closer cooperation at international level with like-minded countries and international organisations.

In this connection, the Smart Energy Expert Group will play a central role, including setting up a high level dialogue with national representatives.

The Commission also calls on member states to increase their research support for the piloting of digital technologies in the energy sector and proposes a flagship initiative to be included in the Horizon Europe programme.

In conclusion, the Commission states that there is no transition towards clean energy without a plan for digital.

“Therefore, the Commission invites the European Parliament and the Council to endorse this action plan and contribute to its swift implementation.”

Join Enlit Europe in Frankfurt and be part of the conversation about the energy transition in Europe and beyond.

Register now