World Energy Council: Drivers of the Energy Transition – Digitalisation, Decentralisation and Decarbonisation

This year's World Energy Issues Monitor gives insights into the particular challenges facing system operators.
Published: Thu 11 Jul 2019

The Council’s Issues Monitor identifies shifting patterns of connected issues which are shaping energy transitions. Based on responses from ENTSO-E members, system operators may not be getting much rest over the coming years as there are many challenges during the energy transition yet to be resolved which will keep them awake at night and busy during the day, such as market design issues, cyber threats, climate frameworks, and decommissioning. Digitalisation has emerged as a key action priority, because as the system becomes more digitized physical threats transition to cyber threats and system operators must equip themselves with the workforce necessary to handle this new threat.

From a global perspective, energy leaders from across the globe are keen to incorporate innovative policies and technologies toward achieving decarbonisation, but they caution that it must be done in a manner that is socially affordable, accessible and secure. 

These were the conclusions of a webinar hosted by TSO association ENTSO-E today discussing the results of a World Energy Council survey which for the first time included system operators.

The World Energy Issues Monitor 2019 gives insight into the priorities of global energy leaders and how they compare with those of European TSOs and DSOs. Global tracking of issues indicates that “digitalisation first moved into the spotlight of senior energy leader attention in 2014”, said Angela Wilkinson, senior director of insights at the World Energy Council.

While TSOs and DSOs have slightly different concerns, there are some common themes:

Market design, EU cohesion, storage and talent are among the top uncertainties for TSOs and DSOs.

For TSOs the primary uncertainty is decommissioning, as now renewables are pushing out older assets and nuclear plants are closing, there is much more focus on pan-European adequacy, said Laurent Schmitt, secretary general of ENTSO-E. Given the volume of work underway on new methodologies and implementation of the Clean Energy Package and other initiatives, he is optimistic for the rapid transformation of the sector. “I’m confident a lot will be achieved,” he said. The adoption of new digital tools such as the Internet of Things, AI and blockchain is essential. “It’s a must if we are to achieve the next stage of energy transition.”

Key for distribution system operators will be ensuring there is an investment model based on an attractive and stable regulatory framework, said Juan Marco, senior technical advisor at DSO association E.DSO. To continue providing safe and reliable systems that allow customers to play their role in the energy transition, DSOs will need to keep up with technology risks, improve the skill of their workforce and have a steady regulatory framework to foster grid investment and technology development. Much of the change to the energy system will happen at the DSO level as energy generation becomes more decentralised and consumers take a more active role. “It will require employees to change dramatically from what they used to do 10-15 years ago to what our customers demand in the future,” said Marco.

TSOs and DSOs are collaborating as the distinctions between different market participants becomes blurred, for example with a joint report on active system management released in April looking at how new flexibility services can help manage grid congestion.

DSOs see cyber threats as a bigger challenge than TSOs, possibly because TSOs tackled the issues first as they were designated as critical infrastructure under the EU’s 2016 NIS Directive (Directive on security of network and information systems). The World Energy Council ran some simulations of cyber insecurity challenges earlier this year to rehearse how utilities would manage through crises, which highlighted some gaps in procedures, Wilkinson said. “Everybody is making assumptions about what everyone else is doing and there’s a lot of slippage.”

ENTSO-E is hosting a conference in Finland in November looking back at the achievements of the organisation’s first ten years and plans for the future: