Electricity digitalisation policies

We illustrate and comment some of the main EU policy and legislative initiatives in the energy and digitalisation fields. Digital transformation is a key enabler to attain the Green Deal/Recovery objectives.  A consistent approach in the regulation of several cross-cutting sectors (Energy, ICT, Transport, etc.) is however needed to reach those objectives.

This chart depicts some of the main policy initiatives in the energy and digitalisation fields. 

 

In particular, the European Union put forward two ambitious political initiatives, respectively in the green and digital fields, which display clear synergies:

  • The European Green Deal is the EU’s plan for the sustainable growth. It aims to achieve the Paris Agreement objective, that is: keep the global temperature increase to below 2°C.
  • the EU has also issued a Digital Strategy since digitalisation requires preserving privacy, security, safety and ethical standards. Further it needs an infrastructure fit for the future, with common standards, networks, and clouds.

More in detail:

  • It is essential to ensure that the European energy market is fully integrated, interconnected and digitalised.
  • Digital technologies (such as artificial intelligence, 5G, cloud and edge computing) are a critical enabler for attaining the sustainability goals of the Green deal in the energy sector. At the same time they are responsible for a large share of energy consumption due to the rapid digital sector growth.
  • Accessible and interoperable data are at the heart of innovation. This data, combined with digital infrastructure (e.g. supercomputers, cloud, ultra-fast networks) and artificial intelligence, facilitate evidence-based decisions and expand the capacity to tackle environmental challenges.


2014 Electronic Identification Authentication & Signature (eIDAS) Regulation:

  • People and businesses can use their own national electronic identification schemes (eIDs) to access public services in other EU countries
  • European internal market for electronic trust services (e-signatures, web authentication,…) with the same legal status as traditional paper

2016 General Data Protection Regulation (GDPR)

  • Protection of personal data processing and free data movement
  • Clarifying rules for companies and public bodies in the digital single market


The 2019 Electricity Directive includes the following elements related to digitalisation:

  • Smart metering systems (art. 19-22).

Member States shall ensure the deployment in their territories of smart metering systems that assist the active participation of customers in the electricity market. Such deployment may be subject to a cost-benefit assessment

Where the deployment of smart metering systems has been negatively assessed as a result of the cost-benefit assessment, every final customer is entitled on request to have a smart meter installed

By 2030: 266 million smart meters are expected to be installed (covering 92% of the European consumers), which will represent a total aggregated investment of €46 billion.

  • Data management and interoperability requirements (art. 23-24)
Member States shall organise the management of data in order to ensure efficient and secure
data access and exchange, as well as data protection and data security.
Member States shall facilitate the full interoperability of energy services within the Union. The Commission shall adopt, by means of implementing acts, interoperability requirements and nondiscriminatory and transparent procedures for access to data
  • Distribution system operators shall act as a neutral market facilitator and can procure flexibility services (art. 31-32)
Each distribution system operator shall act as a neutral market facilitator in procuring the energy it uses to cover energy losses in its system in accordance with transparent, non-discriminatory and market-based procedures, where it has such a function.
Where a distribution system operator is responsible for the procurement of products and services necessary for the efficient, reliable and secure operation of the distribution system, rules adopted by the distribution system operator for that purpose shall be objective, transparent and non-discriminatory, and shall be developed in coordination with transmission system operators and other relevant market participants.
  • Digitalisation among the tasks of the Transmission system operator (art. 40)


The 2019 Electricity Regulation includes the following elements related to digitalisation:

(PREAMBLE: The future electricity system should make use of all available sources of flexibility, particularly demand side solutions and energy storage, and should make use of digitalisation through the integration of innovative technologies with the electricity system.)

  • Digitalisation investments for flexibility (art. 13)

The transmission system operators and distribution system operators shall report at least annually to the competent regulatory authority, on:

the measures taken to reduce the need for the downward redispatching of generating installations using renewable energy sources or high-efficiency cogeneration in the future including investments in digitalisation of the grid infrastructure and in services that increase flexibility.

  • Charges for access to networks, use of networks and reinforcement (art. 18)

Tariff methodologies shall […] provide appropriate incentives (to transmission system operators and distribution system operators over both the short and long run), in order to increase efficiencies, including energy efficiency, to foster market integration and security of supply, to support efficient investments, to support related research activities, and) to facilitate innovation in interest of consumers in areas such as digitalisation, flexibility services and interconnection.

  • Digitalisation tasks for transmission and distribution operators (art. 30, 55)

The system operators promote the digitalisation of transmission networks including deployment of smart grids, efficient real time data acquisition and intelligent metering systems;

The system operators supports the development of data management, cyber security and data protection in cooperation with relevant authorities and regulated entities;


The 2019 Risk Preparedness Regulation includes the following elements to an extent related to digitalisation:

  • Even where electricity crises start locally, their effects can rapidly spread across borders.
  • Some extreme events, such as cold spells, heat waves or cyberattacks, may affect entire regions at the same time.
  • Cyber-incidents are properly identified as a risk, and the measures taken to address them are properly reflected in the risk-preparedness plans


Moving to cybersecurity, the EU is working at a new strategy aiming to build collective resilience and capabilities to respond to major cyberattacks. It also outlines plans to work with partners around the world to ensure international security and stability in cyberspace.

The strategy covers the security of essential services such as hospitals, energy grids, railways and the ever-increasing number of connected objects in our homes, offices and factories.  

Main elements of the first NIS Directive (see visual tool by ENISA on slide):

  • Member States' to establish a Computer Security Incident Response Team (CSIRT) and a competent national NIS authority,
  • Collaboration and information exchange among all the Member States in the Cooperation Group,
  • Energy, digital infrastructure – defined as operators of essential services - and digital service providers (such as search engines, cloud computing services and online marketplaces) are included among the crucial sectors to monitor even though with different degrees of supervision.

The new Commission proposal aims to ensure cybersecurity resilience of current and upcoming technologies (e.g. 5G networks, artificial intelligence, internet of things, blockchain).  Some key elements

  • It adds new sectors (e.g. the space sector) based on their criticality for the economy and society.
  • It eliminates the distinction between operators of essential services (such as electricity system operators) and digital service providers (such as search engines, cloud computing services) - entities would be classified based on their importance.
  • It strengthens security requirements for the companies, by imposing a risk management approach providing a minimum list of basic security elements to applied.
  • It introduces more stringent supervisory measures for national authorities.
  • It enhances the role of the Cooperation Group in shaping strategic policy decisions on emerging technologies and new trends.

                            


Sector integration aims to maximise the decarbonization effects targeting:

  • A more ‘circular' energy system, via the ‘energy efficiency first' principle.
  • A greater direct electrification of end-use sectors.
  • The use of Clean fuels (including renewable hydrogen) in those sectors where electrification is difficult (such as steel, cement, air traffic, and shipping).

The strategy sets out 38 actions to create a more integrated energy system including the digitalisation sector (but also financial and fiscal measures, market governance reform, infrastructure planning, and information to consumers).

Digitalisation supports energy system integration – it can:

  • unleash the full potential of customers having a flexible energy consumption across different sectors to contribute to the efficient integration of more renewables
  • enable interlinked flows of energy carriers
  • allow for more diverse markets to be connected with another, and
  • provide the necessary data to match supply and demand at a more disaggregated level and close to real time.

The key actions on digitalisation scheduled for 2021 are:

  • Adopt a Digitalisation of Energy Action plan to develop a competitive market for digital energy services that ensures data privacy and sovereignty and supports investment in digital energy infrastructure.
  • Develop a Network Code on cybersecurity in electricity with sector-specific rules to increase the resilience and cybersecurity aspects of cross-border electricity flows, common minimum requirements, planning, monitoring, reporting and crisis management.
  • Adopt the implementing acts on interoperability requirements and transparent procedures for access to data within the EU.

ALL REFERENCES FOR 1. ELECTRICITY DIGITALISATION TRENDS & POLICIES