Digitalisation: an enabler for the clean energy transition

Abstract

Russia’s war on Ukraine and the resulting energy crisis have painfully reminded Europe that it must urgently reduce its dependence on fossil fuels. For a sustainable, secure and affordable energy future, the coming years will require a massive scale-up of renewable energy across the EU and a tremendous effort by European businesses and households to cut their energy consumption.

The use of data and digital solutions can play a pivotal role in bolstering these efforts. This has been recognised in the European Commission’s EU Action Plan on digitalising the energy system of October 2022, the first comprehensive plan for a twin green and digital transition in the European energy sector.

While this plan is undeniably commendable, it is just a start. To fully unlock the potential of digitalisation in the transition towards sustainable energy systems, built around the active participation of consumers, significant shares of renewables, energy savings, and efficient energy use, the EU and its member states need to:

1. Accelerate work on a common European energy data space, characterised by interoperable data standards, effective incentives for data sharing and adequate data protection and privacy safeguards for consumers.

2. Ensure that citizens possess the necessary digital skills and information to reap the full benefits of the twin transition in terms of consumer empowerment and access to affordable and clean energy.

3. Put in place the necessary safeguards regarding cybersecurity of energy networks to ensure that digital transformation does not jeopardise the resilience of EU energy systems.

4. Use financial tools to accelerate the deployment of digital solutions in the energy sector and equip existing networks with the necessary digital infrastructure.

Keywords:

• clean energy transition
• European Union
• twin transition
• digitalisation

Acknowledgements/disclaimer

This article builds on the findings of the project ‘Digitalisation for a Clean Energy Transition’ undertaken by EPC with the support of the Vodafone Institute for Society and Communications. The project included two workshops on ‘Digitalisation as a Catalyst for the Renewable Revolution’ and ‘Digitalisation as a Tool for More Efficient Energy Use’, which took place between May and July 2022. Thank you to Annika Hedberg, Stefan Šipka and Andrea G. Rodríguez for their comments on this work. Special thanks also to the experts from the International Renewable Energy Agency, Francisco Boshell and Jaidev Dhavle, for sharing their valuable expertise in the research process. The support the European Policy Centre receives for its ongoing operations, or specifically for its publications, does not constitute an endorsement of their contents, which reflect the views of the authors only. Supporters and partners cannot be held responsible for any use that may be made of the information contained therein. This article is a revised version of an EPC Discussion Paper that was published in January 2023.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 A mini-grid or ‘microgrid’ is a local electricity network that links up distributed energy resources (eg households with solar PV systems on their rooftops) with other small residential and commercial consumers

2 For more on the various ways in which digitalisation can contribute to the flexibility of power systems, see International Renewable Energy Agency, Innovation Landscape for a Renewable-Powered Future: Solutions to Integrate Variable Renewables (IRENA 2019)

3 Ibid 66–78

4 Blockchain is a distributed ledger consisting of a digital record of transactions that are linked together via cryptography into time-stamped ‘blocks’

5 Chathuri L Gunarathna and others, ‘Reviewing Global Peer-to-Peer Distributed Renewable Energy Trading Projects’ (2022) 89 Energy Research & Social Science 6

6 International Renewable Energy Agency, Innovation Landscape Brief: Blockchain (IRENA 2019), 16

7 Gunarathna and others (n 5), 1

8 International Energy Agency (2017), Digitalization and Energy, 80

9 Ibid, 79

10 Ibid, 80

11 European Commission, A Renovation Wave for Europe – Greening Our Buildings, Creating Jobs, Improving Lives, COM(2020) 662 final, Brussels, 1

12 International Energy Agency (2017) (n 8), 43

13 IoT refers to the interconnected network of everyday physical objects and devices (eg cars, thermostats, kitchen appliances, fridges), with sensors and software that allows interaction and the exchange of data between them

14 AI refers to the simulation of human thinking processes by computer systems, including reasoning, learning from experience, problem-solving, etc.

15 The use of smart light bulbs in combination with apps that control lighting, set schedules, turn off lights remotely and dim lights, for example, can help to reduce the energy consumption of lighting systems – especially helpful in commercial buildings. LEDs with sensors can also be used to gather information about occupancy, activity and daylight in certain rooms, which allows the energy consumption of the heating and cooling systems to be improved. By adding smart thermostats and smart blinds or motorised window shades, additional data can be gathered about household routine and weather forecasts

16 With Building Information Modelling (BIM) and digital twins, architects, engineers and contractors can simulate construction and possible retrofits, understand real-time energy use and increase energy efficiency and reduce consumption. Moreover, digital twins can not only simulate single buildings but entire cities, thereby allowing the energy impacts of infrastructure policies and projects to be tested

17 European Commission, Preliminary Analysis of the Long-Term Renovation Strategies of 13 Member States, SWD(2021) 69 final, Brussels, 33

18 European Environment Agency, ‘Greenhouse Gas Emissions from Transport in Europe’, https://www.eea.europa.eu/ims/greenhouse-gas-emissions-from-transport (26 October 2022, accessed 25 June 2023)

19 Transport & Environment, ‘Addressing the Heavy-Duty Climate Problem’, https://www.transportenvironment.org/discover/addressing-the-heavy-duty-climate-problem/ (16 September 2022, accessed 25 June 2023)

20 For more on platooning, see eg Richard Bishop, ‘US States Are Allowing Automated Follower Truck Platooning While the Swedes May Lead in Europe’ Forbes, https://www.forbes.com/sites/richardbishop1/2020/05/02/us-states-are-allowing-automated-follower-truck-platooning-while-the-swedes-may-lead-in-europe/?sh=21b21bc3d7e8 (2 May 2020)

21 Jaap Burger and Julia Hildermeier, ‘Europe Needs Smart Charging of All EVs Now’ Euractiv, https://www.euractiv.com/section/electricity/opinion/europe-needs-smart-charging-of-all-evs-now/ (7 February 2022)

22 MaaS is a service that offers users an integrated platform for planning and paying for different mobility options

23 International Energy Agency, ‘Industry’, https://www.iea.org/energy-system/industry#tracking (11 July 2023, accessed 13 September 2023)

24 Nikolaus J Kurmayer, ‘Eyes Wide Shut, EU Industry Faces Energy Efficiency Reckoning’ Euractiv, https://www.euractiv.com/section/energy-environment/news/eyes-wide-shut-eu-industry-must-face-energy-efficiency-reckoning/ (13 July 2022)

25 Holly B Martin, ‘How Sustainable Is 3D Printing as a Manufacturing Process?’ The Fabricator, https://www.thefabricator.com/additivereport/article/additive/how-sustainable-is-3d-printing-as-a-manufacturing-process (11 September 2019, accessed 25 June 2023)

26 Eurostat, ‘Agriculture and Forestry: Energy Use Rose in 2020’, https://ec.europa.eu/eurostat/web/products-eurostat-news/-/ddn-20220929-2 (29 September 2022, accessed 25 June 2023)

27 Ibid

28 Eurostat, ‘Agri-Environmental Indicator – Energy Use’, https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Agri-environmental_indicator_-_energy_use#Analysis_at_EU_and_country_level (8 August 2023, accessed 13 September 2023)

29 In short, precision agriculture is a farm management strategy that ‘takes account of temporal and spatial variability to improve sustainability of agricultural production’. See International Society of Precision Agriculture, ‘Precision Ag Definition’, https://www.ispag.org/about/definition (January 2021, accessed 25 June 2023)

30 European Commission, Digitalising the Energy System – EU Action Plan, COM(2022) 552 final, Strasbourg, 13

31 Lotfi Belkhir and Ahmed Elmeligi, ‘Assessing ICT Global Emissions Footprint: Trends to 2040 & Recommendations’ (2018) 177 Journal of Cleaner Production 448

32 European Commission, Digitalising the Energy System (n 30), 15

33 Ibid, 14–15

34 Ibid, 16

35 Vanessa Forti and others, The Global E-Waste Monitor 2020: Quantities, Flows and the Circular Economy Potential (United Nations University, United Nations Institute for Training and Research/International Telecommunication Union/International Solid Waste Association 2020), 13

36 Ibid, 23

37 Stefan Šipka, Towards Circular E-Waste Management: How Can Digitalisation Help? (European Policy Centre 2021)

38 ENISA, ‘Cybersecurity Threats Fast-Forward 2030: Fasten your Security-Belt Before the Ride’, https://www.enisa.europa.eu/news/cybersecurity-threats-fast-forward-2030 (11 November 2022, accessed 25 June 2023)

39 Committee for European Construction Equipment, Digitalising the Construction Sector: Unlocking the Potential of Data with a Value Chain Approach (CECE 2019), 15

40 Ibid

41 European Commission, ‘REPowerEU: A Plan to Rapidly Reduce Dependence on Russian Fossil Fuels and Fast Forward the Green Transition’, https://ec.europa.eu/commission/presscorner/detail/en/ip_22_3131 (18 May 2022, accessed 25 June 2023)

42 The Commission’s initial legislative proposal for revision of RED under the Fit for 55 Package put forward a binding target of a 40 per cent share for renewables in the EU’s energy mix by 2030

43 Council of the European Union, ‘Council and Parliament Reach Provisional Deal on Renewable Energy Directive’, https://www.consilium.europa.eu/en/press/press-releases/2023/03/30/council-and-parliament-reach-provisional-deal-on-renewable-energy-directive/ (30 March 2023, accessed 25 June 2023)

44 Council of the European Union, ‘Council and Parliament Strike Deal on Energy Efficiency Directive’, https://www.consilium.europa.eu/en/press/press-releases/2023/03/10/council-and-parliament-strike-deal-on-energy-efficiency-directive/?utm_source=dsms-auto&utm_medium=email&utm_campaign=Council%20and%20Parliament%20strike%20deal%20on%20energy%20efficiency%20directive (10 March 2023, accessed 25 June 2023)

45 European Commission, Digitalising the Energy System (n 30)

46 European Commission, Digital Economy and Society Index (DESI) 2022, 14

47 European Commission, Digitalising the Energy System (n 30), 10

48 European Commission, ‘First-Generation Blueprint for a Common European Reference Framework for Energy-Saving Applications’, https://digital-strategy.ec.europa.eu/en/news/first-generation-blueprint-common-european-reference-framework-energy-saving-applications (10 May 2023, accessed 25 June 2023)

49 European Commission, ‘Energy Communities’, https://energy.ec.europa.eu/topics/markets-and-consumers/energy-communities_en (accessed 25 June 2023)

50 European Commission, ‘Europe’s Digital Decade: Digital Targets for 2030’, https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/europe-fit-digital-age/europes-digital-decade-digital-targets-2030_en (accessed 25 June 2023)

51 European Commission, Digitalising the Energy System (n 30), 14

52 Francisco Boshell and Sean Ratka, ‘The Nexus Between Data Centres, Efficiency and Renewables: A Role Model for the Energy Transition’ Energy Post, https://energypost.eu/the-nexus-between-data-centres-efficiency-and-renewables-a-role-model-for-the-energy-transition/ (26 June 2020)

53 European Commission, ‘European Digital Innovation Hubs’, https://digital-strategy.ec.europa.eu/en/activities/edihs (13 March 2023, accessed 25 June 2023)

54 European Commission, ‘Digitalising European Energy and Transport Networks through Operational Digital Platforms’, https://digital-strategy.ec.europa.eu/en/funding/digitalising-european-energy-and-transport-networks-through-operational-digital-platforms (13 October 2022, accessed 25 June 2023)

55 For a broader outlook on the role of digitalisation in the European Green Deal, see Annika Hedberg and Stefan Šipka, Towards a Green, Competitive and Resilient EU Economy: How Can Digitalisation Help? (European Policy Centre 2020)