Reshaping the Grid: How Industry Participates in Energy System Transformation

Reshaping the Grid: How Industry Participates in Energy System Transformation

As Europe accelerates its transition to clean energy, the role of industry has become increasingly pivotal in driving the evolution of the continent’s power grid. From spearheading wind and solar expansions to pioneering hydrogen pilot projects, the private sector is actively reshaping the landscape of electricity generation and distribution.

Modernizing Grid Infrastructure

At the core of this transformation lies the urgent need to modernize Europe’s aging grid infrastructure. Interoperable digital solutions and data sovereignty are key to the digital transformation of the energy system. Reducing greenhouse gas emissions by 55% and reaching a 45% share of renewables by 2030 will require a much smarter and more interactive grid than the one we have today.

To cope with the expected 60% increase in electricity consumption by 2030, the grid must integrate a large share of variable renewable power. Wind and solar generation capacity must grow from 400 GW in 2022 to at least 1,000 GW by 2030, including a major build-up of offshore renewables up to 317 GW. This will necessitate a more decentralized, digitalized, and flexible electricity system, with millions of rooftop solar panels and local energy communities sharing resources.

Investing in digital technologies, such as IoT devices, smart meters, 5G/6G connectivity, and cloud-edge computing, is instrumental to accelerating the energy transition and bringing benefits to everyday life. One key deliverable is the development of a Common European Reference Framework (CERF) for energy-saving applications, which will provide a blueprint for interoperable digital solutions across the continent.

Integrating Renewable Energy

As the grid becomes more decentralized, the integration of renewable energy sources is a paramount challenge. Industry is at the forefront of this effort, driving wind and solar expansions and pioneering hydrogen pilot projects to reduce Europe’s reliance on imported fossil fuels.

The digitalisation of the energy sector is already underway, with smart technologies enabling remote control and data generation from devices like electric vehicles, solar panels, and heat pumps. This trend is set to continue, with the number of active IoT devices in the world expected to surpass 25.4 billion by 2030, and 51% of all households and SMEs in the EU having smart electricity meters.

To support the integration of decentralized renewable energy sources, industry is investing in grid flexibility solutions, such as activating consumers as prosumers and better managing their energy assets. Seamless access to granular data about the grid and prosumer assets will be critical for delivering energy services, which can only be achieved through widespread digital tools and shared data infrastructure.

Enabling Sustainability Goals

Beyond modernizing the grid and integrating renewables, industry is also playing a vital role in enabling Europe’s net-zero emissions and broader sustainability goals. This involves implementing energy efficiency measures, exploring sector coupling approaches, and forging public-private partnerships.

One of the key policy initiatives driving this transformation is the EU’s digital and energy policies, which guide the digitalisation of the European energy system in a coordinated manner. Issues like data interoperability, security of supply, cybersecurity, privacy, and consumer protection are being addressed through a range of legislative initiatives, investments, and coordination with Member States.

The European Innovation Council (EIC), part of the EU’s Horizon Europe research and innovation programme, is providing €1.4 billion in 2023 to support European deep tech research and high-potential start-ups in the energy sector. This is helping to nurture the next generation of clean energy solutions and accelerate the transition to a sustainable, decarbonized future.

Overcoming Challenges

While the potential of industry’s involvement in energy system transformation is immense, the path forward is not without its challenges. Cybersecurity, data management, and regulatory compliance are just a few of the hurdles that must be navigated.

To address cybersecurity risks, companies are investing in sophisticated security tools, including AI-powered threat detection and incident response automation. Additionally, multi-layered measures, such as anti-malware software, intrusion detection systems, and role-based access control, are being implemented to safeguard the increasingly digitalized energy infrastructure.

Data management issues, such as handling the vast amounts of information generated by IoT devices and software, are being tackled through the adoption of cloud and hybrid cloud solutions that enable automatic scaling of resources. Industry is also working to integrate data from diverse sources and retire unnecessary or duplicate applications to ensure system reliability.

Navigating the constantly evolving regulatory landscape, including environmental and social governance laws, data protection regulations, and operational safety rules, requires a combination of digital utility tools, legal expertise, and active participation in industry forums to stay ahead of the curve.

Forging Collaborative Pathways

Despite the challenges, industry is embracing a collaborative approach to energy system transformation, forging partnerships with policymakers, researchers, and other stakeholders to drive progress.

One such example is the Common European Reference Framework (CERF) for energy-saving applications, which is being developed through the EU-funded InterConnect project, involving a diverse consortium of industry players, research institutions, and public authorities.

Similarly, the Data Spaces Support Centre (DSSC) is contributing to the creation of Common European Data Spaces, fostering the development and use of standards and platforms designed to fit specific sectoral needs and organizational frameworks.

These collaborative initiatives, combined with the European Innovation Council’s support for deep tech research and high-potential start-ups, are shaping the future of Europe’s energy landscape, with industry playing a pivotal role in reshaping the grid and accelerating the transition to a sustainable, decarbonized future.

As the European Future Energy Forum continues to spotlight the industry’s contributions to this transformative journey, the path ahead seems clear: through a coordinated, collaborative, and innovative approach, Europe can redefine its energy landscape, paving the way for a cleaner, more resilient, and more sustainable future.

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