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The Energy Transition and the Digitalization of the Energy System: Challenges and Opportunities

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By Deborah Scaggion

· 4 min read

If there is one thing we can learn from the pandemic and the disruption it caused around the world, this must be that technology will play a central role in our lives. Indeed, the rapid development of digital technologies took by storm several sectors, including the energy one. While technologies like artificial intelligence (AI) and big data promise to make the green transition faster, their introduction is likely to cause profound changes to the energy system and its equilibrium.

Opportunities for the Energy System

The introduction of advanced technologies such as big data, AI and 5G promise to increase the efficiency of clean energy technologies and thereby boost their deployment.

AI is any machine able to learn and respond to different situations. For example, it could be employed to develop innovative materials that can decrease embedded emissions, toxicity and costs of green technologies such as PV panels and wind turbines*. In addition, digital technologies enable the integration of more renewable energy plants into the grid.

More importantly, AI can be used to make PV plants smarter and more efficient, helping to address failures quickly and enabling better energy storage decisions. To make this possible, Huawei created FusionSolar 6.0+ Utility Smart PV Management System, a smart system that integrates AI with more sophisticated algorithms, enables the collection of real-time data on production, facilitating the management of entire PV plants. These data could even be used for maintenance operations to be carried out through drones*.

Accordingly, artificial intelligence, big data and 5G technologies could enable the collection of key data that enhance energy forecasting and support the flexibility of the energy grid.

Moreover, it could also improve customer experience and increase the flexibility of energy demand profiles through a system of incentives. A handful of innovative utilities around the world have already developed apps that allow their customers to track the price of energy during the day, incentivizing them to use electricity during non-peak hours.

Apps also exist to track the carbon intensity of the grid to allow consumers to turn on power-hungry devices when the cleanest sources are generating the most (although much greater integration with smart appliances is needed to automate such decisions).

Challenges for the Energy System - Cyber Security

However, the introduction of smart technologies comes with its own challenges. Every time you add software to existing infrastructure, you are increasing its efficiency but also making it hackable*. Major data breaches have already been committed at the expense of other key infrastructures in several countries and some even involved key institutional players, such as the hack on the US energy department in December 2020 – one of the worst in US history.

Safety and security will become essential requirements in the employment of these technologies moving forward because the question that should be answered is not if these breaches might happen, but when and how they can be prevented.

The Role of Policymakers - The Role of the European Union

The successful employment of these technologies not only depends on technological development and finance, but also on the creation of policies that support the digitalization of the energy sector. In fact, digitalization of energy infrastructure is crucial if countries want to achieve targets set by the Paris Agreement. so policymakers have an important role to play in ensuring the creation of a regulatory framework that facilitates this transition.

The European Union is positioning itself as an international leader in the transition to clean energy and is taking active actions to support the digitalization of the sector. Accordingly, in 2020 it published a roadmap for the digital transformation of the energy sector in Europe. The document recognizes the need to digitalise an increasingly decentralized energy system and present a list of short-term actions to accelerate their deployment. Among these actions, one of the priorities is to build trust on digital tools among developers and final customers, addressing their concerns in relation to data protection and security*.

While the document represents a step in the right direction in defining a European strategy to decarbonize and digitalize the energy sector, most critics expect further and bolder steps in the future to back commitments with actions.


*How AI and Robots are Transforming Solar Energy | Analytics Insight
*How AI Is Transforming The Solar Energy Industry? (
*Cyber attacks: it is not a matter of if but when, says New Orleans’ CIO - YouTube
*Assessment and roadmap for digital transformation of the energy sector towards an innovative internal energy market - Publications Office of the EU (

Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy & Sustainability writers, their opinions do not necessarily represent those of illuminem.

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About the author

Deborah Scaggion is a Commercial Associate at Aurora Energy Research. She has a strong interest in the energy sector. More specifically, she is passionate in the energy transition, a topic on which she currently researches and writes.

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