Digitising the energy sector: an opportunity for Europe

To meet our commitments in the context of the UN Paris Agreement on Climate Change, the EU needs to rethink the way it produces and consumes energy.

Authors: Roberto Viola, Director-General, DG Communications Networks, Content and Technologies and Dominique Ristori, Director-General, DG Energy

The transition to a smart, secure and sustainable energy system is no longer a choice for Europe; it is a responsibility towards all citizens, our future generations and the planet. At the same time, this transition represents a real economic opportunity as it will bring new investments, jobs and growth and will empower consumers to participate actively in the market and benefit from new technologies.

This transition requires first and foremost bridging energy and digital economy. The electricity system is becoming more decentralised and more decarbonised, and we need it to become more digitalised to keep our electricity supply competitive and affordable, and maintain our high standards of security of supply.

Synergies should therefore be developed between the Energy Union and the Digital Single Market agenda, as well as synergies between the energy and ICT sectors in order to stimulate joint investments and coherence in regulatory frameworks. Energy and digital will come together most closely if we enable European companies to deliver energy intelligent products and services across Europe and if the energy sector actively contributes to horizontal Digital Single Market policies.

The single energy market and the digital single market must go hand-in-hand, as in reality they feed each other. Digital technologies already play an important role in the energy sector. This holds particularly true for smart grids and smart metering systems, smart home appliances, smart charging solutions for electric vehicles and smart cities. In all these areas, digital technologies create various opportunities. They can help the consumer to participate actively in the energy market and use energy more efficiently. They can also foster a better use of energy from renewable sources. On the other side, without electricity there is no access to internet.

Innovation, data and smart grids

Smart grids are a clear example of digital meeting energy, as they are about information exchange and making necessary data available to interested parties. Smart grids, as the interface between the energy, IT and telecom sectors, are one of the enablers for realising the Energy Union and the Digital Single Market – both in terms of infrastructure and market.

They are part of the solution for managing our grids in times of increasing shares of renewables, decentralised generation and new loads, such as electric vehicles, but also for creating new value streams (i.e. services and products). Smart Grids are also part of an innovative and competitive Energy Union. They provide an important opportunity for European manufacturers to develop attractive smart solutions and boost their global competitiveness.

Moreover, smart technologies, including smart metering systems, will enable consumers to reap benefits from the energy market by taking control of their energy consumption and providing their flexibility to the system. This is part of the "new deal" for consumers we advocate in the Energy Union.

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A key step to allow different appliances to communicate and make decisions on their energy consumption is to increase their interoperability. Europe made progress in this direction with standards like SAREF which support communication between appliances that "speak the same language" to communicate on their energy footprint. SAREF became a standard of European Telecommunications Standardisation Institute (ETSI) and the Global initiative for Internet of Things standardisation (OneM2M) in 2015. This was a first important step. We are now moving forward to spread the use of these standards and turn them into new services for consumers so that they can fully benefit from the opportunities that smart appliances, smart buildings and smart grids enable.

This will require close cooperation between different industry sectors like digital, energy, telecoms, and home automation. We intend to provide support for this kind of collaboration under Horizon 2020 in 2018 through large-scale pilots in the Focus Area 'Internet of Things' (IoT) that targets smart home architectures and standards. Such pilots will allow companies to work together on connected objects and test new business models across different sectors. Energy and utility companies will benefit from the development of IoT: they will become more agile, flexible and efficient.

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Sharing data beyond sectors and national borders within 'data value chains' that enable the development of innovative energy services in a smart home will be essential for achieving a functioning Energy Union, as well as an effective Digital Single Market. Furthermore, it can be combined with other services, for example health or mobility.

In order to get there, energy companies need to move to a culture of data sharing but this also requires a well-integrated regulatory framework that is coordinated across sectors and Member States. This is what we are aiming for with our initiative on the EU data economy, and through our Directorates-General joint support for research and innovation for the use and exchange of 'big data' in the energy sector in the next Horizon 2020 work programme (2018-2020). Equally important is the work of the Smart Grids Task Force, which is currently focussing on the alignment of energy data formats and on developing network codes for demand-response.

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