Paving the path to a digitalized energy system

The role of data and digitalization in energy and climate transitions is unquestionably growing.  As other sectors look to accelerate their own journeys toward net zero by decarbonizing their energy use, the energy sector is increasingly recognized to be at the vanguard of the battle to limit climate change.

CGI and Utility Week’s insight report, Paving the way to net zero, based on our collaboration on a roundtable discussion on Data and Digitalization Requirements for the Energy Transition, makes a timely contribution to the wider discourse on how to deliver the energy transition.

The output from the roundtable identified five common beliefs and a further cross-cutting theme, the need for incentives. This theme can be organized into three outcomes and three enablers around which there was broad consensus.

The three outcomes identified were:

1. Prioritized use cases on which the sector can collaborate to deliver solutions
2. A cultural shift, especially in attitudes to risk
3. Ease of participation for consumers (or their intelligent energy technologies) in the future energy system

And what’s needed to deliver these outcomes?

1. Gaps in intelligence across the system to be addressed
2. Standards that enable data interoperability
3. Incentives that encourage investment by some energy system actors to create value for others

The level of consensus and clarity from the working group on these outcomes and how to deliver them was striking; as was the passion and desire to make progress in these areas.

Ofgem (the energy regulator for Great Britain) was seen as having a pivotal role to play in leading the prioritization of use cases and working with the industry to establish appropriate incentives that unite the sector behind solving prioritized use cases. This included providing incentives to address gaps in system intelligence and secure investment to generate data that doesn’t exist today (such as LV network data) that will create value elsewhere in the energy system, ultimately, to the benefit of the consumer.

One way to achieve this desired consensus on prioritization and justify incentives would be to determine the "whole system" value of, and the inter-dependencies between, use cases.  But, of course, that would require agreement on the definition of “whole system”!

With the new dynamics of the energy system, the need for a cultural change with respect to risk was on people’s minds. It was commented that we know how to regulate for physical assets with 40-50 year lives, but regulation needs to recognize and value data as an asset; an asset whose value is measured in weeks or months, not decades. 

The sector’s demonstrable expertise in managing physical assets should be applicable to managing data as an asset, when supported by appropriate regulation. But it was recognized that embedding such a significant cultural shift wouldn’t be without pain.

It was also recognized that we have to take people with us and make it easy for consumers to participate in, and benefit from, the energy transition. There were calls to address consent and increase the data set that is shared. There is an inherent conflict between the idea of “give us the data and the value will come” and protecting people’s rights over their data. 

It’s vital that such calls don’t put the brakes on the journey to net zero. 

Similar debates occurred in the Great Britain smart metering program and, more recently, in the Public Interest Advisory Group on access to data for societal good. The need for access to data needs to be justified to those whose data it is. “Value” isn’t solely monetary. People are willing to share their data for societal good. And addressing climate change would surely qualify as a societal benefit in many people’s minds. Securing people’s trust to share their data is about offering them meaningful choices, providing them with mechanisms for control of access to their data and confidence that, once shared, their data will be secure.

There was consensus on the need for common data standards to enable data interoperability. The lack of agreed data standards was noted as an issue, but wasn’t considered to be an excuse for not making progress; technological solutions that can deal with the lack of standardization were cited.

While there was much talk of the need to adopt a “fail fast” approach to innovation, there needs to be pathways to “scale fast” those innovations that show promise.

My takeaway from this virtual roundtable was of a sector with a clear purpose and a desire to make progress. Hopefully the consensus on the required outcomes and actions needed to deliver them as identified in the report will contribute to accelerating the pace in the race to net zero.
 
Contact me to continue the conversation and read the report.