The European Energy Transition: Actors, Factors, Sectors

Experts share their views on the challenges of the European energy transition and recommendations for imminent policy decisions in a new book edited by Susanne Nies of ENTSO-E.
Published: Tue 14 May 2019

Digitalisation is a key enabler for the three goals of the energy transition: lower emissions, more renewables and greater efficiency in order to reach carbon neutrality by 2050.

Experts in energy policy explore the lessons learned so far and make policy recommendations in a recently published book edited and authored by Susanne Nies, and prefaced by Jacques Delors, called The European Energy Transition: Actors, Factors, Sectors. The book, which reflects the views of the authors and not necessarily the institutions they represent, will be used as the basis for an online course of the same name starting on 17th May by the Florence School of Regulation. Much progress has been made in the last decade following climate agreements leading to the Clean Energy for All Europeans package, but the 2020s will be the ‘proof-in-the-pudding’ decade, says Nies, corporate affairs manager at ENTSO-E. The publication is timely as it is the first comprehensive book taking into account the clean energy package and comes in an important election year for Europe with new National Climate and Energy Plans due to be submitted soon as well as a decisive climate conference at the end of the year.

The 42 authors develop a “colourful and comprehensive mosaic” of the European energy transition, and look at the ‘big picture for the Twenties’, Nies says. “The very meaning of energy will change: from a separate sector dealing with heating, cooling, transport and electricity supply in neighbouring silos to energy as one common layer, where sectors have coupled, and are based on networks that becomes a cyber-physical grid, driven by digitalisation and innovation.”

Engerati speaks to two authors from the book who focussed on digitalisation. While market liberalisation and decarbonisation are policy driven, digitalisation has become a fact of life, Jesse Scott, international senior adviser at think-tank Agora Energiewende says. “You can’t argue with it. It’s coming, so get ready.”

Digitalisation has revolutionised other industries, but energy is a latecomer. “Utilities need to stop thinking the digital energy world is something that will be defined by the energy sector in a room talking to each other. You need ICT folk, car companies, anyone who runs big smart logistics systems that target customer relations, like supermarkets. You have to sit down with a wide range of players now.”

Exponential change in the energy sector and the wave of investment it has attracted are creating great opportunities for more efficient use of data and cost savings.

Around 20 billion devices will be connected to the Internet of Things by 2020, according to Gartner research, and the data collected could be as valuable as the energy used to power them if they can be used to manage local flexibility needs, Scott says. Savings of up to 5% in operating and maintenance can be achieved with predictive maintenance by 2040, according to the IEA, and $1.3 trillion of cumulative investment could be deferred by extending the life of power plants.

The ‘genie’ of digitalisation is moving at such an astonishing speed that policymakers and other stakeholders have to make complex decisions, often with incomplete or imperfect information, Scott says. She recommends ensuring that new infrastructure is ‘smart-ready’ with built-in cybersecure communications systems, while allowing researchers access to the vast ‘data-lakes’ being generated by utilities. She welcomes the EU’s recognition that interim target reviews can allow for a rolling approach to regulation rather than previous once-a-decade packages.  

The backing of politicians for the energy transition, combined with technology advances and reduced costs, is giving industry the certainty that investments in digital and decarbonisation projects are safe, says Alicia Carrasco, CEO of consultants olivoENERGY.

“You have the technology and innovation at the same time as policy support such as the German government’s Energiewende – it’s these two things together that are making the difference.”

Carrasco highlights 13 disruptive innovations that are spurring new business models in the energy sector, such as demand response, digitalisation, and distributed energy. What will lead to the greatest potential for improving hardware and facilitate new dimensions of business is adding an IT layer such as artificial intelligence, algorithms, predictive models and big data analysis tools, she writes.

Disruptive innovations will change the relationship between the energy supplier and their customers, she says. “The ones capable to adapt to the fast changes innovation brings and at the same time focus their business model on the consumer side, will be probably who will take the lead in the coming decentralized, innovative and digitised service-based power system.”

Please see below for a link to the book and the training course: