The UK government’s bold action in 2019 to commit to a legally binding net zero emissions target for 2050 has had wide-ranging ramifications. Not least, it has proved a catalyst for realisations within the energy sector that rapid decarbonisation will require very different methods of system operation, regulation and consumer participation to be brought forward at pace – as well as the application of new incentives to drive strong cohesion between these areas.
To achieve this transformation, it is now acknowledged that utilities need to profoundly change their relationship with data and digitalisation. However, while the will to innovate is strong and some companies have reaped rewards from the application of technology to make efficiency gains, plan investments and interpret shifting consumer needs, progress on accessing the potential presented by digital innovation is patchy across the sector.
As many industry commentators have observed, a lack of focus, coordination and strategic purpose in digital transformation, as well as inadequate regulatory incentives for digital investment, have left the sector in what one leader recently described to Utility Week as a position of “digital deficit”.
Picking up the pace of change
The sector now needs to respond vigorously to a collective imperative to correct this investment lag, to innovate and maximise the potential of data to deliver the net zero transition in a cost-effective and equitable way.
Across an array of energy value chains, data must be applied to create optimised, flexible and intelligent infrastructure that meets the needs of the environment. Meanwhile, access to system data is also seen as key to the emergence of agile markets for services that can engage energy users, reward demand-side participation in the system and empower consumers to make decisions or behaviour changes which will positively contribute to the net zero agenda.
This need to put data at the heart of the UK’s energy transition strategy has been recognised over the past three years in a range of significant publications and industry workstreams, including in the pivotal Energy Data Taskforce publication A Strategy for a Modern, Digitalised Energy System.
This landmark report set in tow a range of important work in the industry to align data and digitalisation strategies and encourage progress towards a principle of “presumed open” data so that diverse innovation in operations, products and services can flourish.
Much progress has been made, with initiatives like the Energy Networks Association’s Open Networks project and its Data and Digitalisation Steering Group convening technical experts from across the gas and power infrastructure base to tackle challenges around data availability, accessibility, and interoperability.
Meanwhile, steady progress from suppliers on the GB smart meter rollout is extending visibility of consumer energy usage data and the Data Transfer Service operator ElectraLink has made available a Distributed Energy Resources Register to help improve visibility of distributed generation and devices. These are just a few examples of the positive developments that have taken place.
However, despite these strides, the pressures of delivering on business as usual, which include resource-hungry price controls, continue to be challenging.
Coordinating multiple stakeholders and a variety of other factors, mean that some major shortfalls against the Energy Data Taskforce’s recommendations remain. For example, progress on asset registration and the creation of a digital system map has been slower than many might have liked.
These issues must be urgently addressed to keep the UK on track with its net zero ambitions and to ensure the British energy system sustains its record on reliability and resilience notwithstanding radically changing system dynamics.
In recognition of the need for a fresh spur for the energy data and digitalisation agenda, the Department for Business Energy and Industrial Strategy, in tandem with Ofgem, has commissioned the Energy Digitalisation Taskforce to build on the foundations of the Energy Data Taskforce, establish a shared vision for the future digital architecture of the sector and make recommendations about the necessary governance arrangements it will need.
Once again, the initiative will be led by prominent energy policy influencer Laura Sandys. In a launch event in mid-May she, alongside other taskforce members, called for collaborative and open input from the sector to help ensure they can carry out a rigorous review of previous data strategy recommendations, honestly critique progress against these and bring a new level of clarity to critical issues surrounding the interoperability of data and data governance. She said this will include scrutiny of issues around consumer consents for data use.
Adding perspective and supporting progress
To help support the work of the new taskforce and enable industry players to make good on their undoubted ambitions to maximise the potential of data in the interests of people and planet, Utility Week and CGI – a global IT and business consulting services firm – recently partnered to host an independent industry working group on the data and digitalisation strategies needed for our net zero energy transition.
Taking place just ahead of the official launch of the new taskforce, the virtual event saw participation from strategic leaders and data specialists representing a range of energy infrastructure companies, energy service providers (including energy suppliers and aggregators) and market operators.
The forum provided a timely opportunity for unbiased reflection on the key challenges and priority actions which should be implemented to accelerate and improve the sector’s approach to harnessing the value of data and digitalisation in the energy transition.
In a subsequent report, Paving the Way to Net Zero: Data and Digitalisation Requirements for the Energy Transition, the working group’s discussions are summarised and collated in a set of core beliefs about what is needed to release the full potential of data and digitalisation on the road to net zero.
Working group beliefs
The following five statements express a set of common beliefs held by participants in Utility Week and CGI’s recent Chatham House working group on what is needed in data and digitalisation strategies for the net zero transition. A sixth theme and cross-cutting enabler is identified in the conclusions of the full report as a need for refreshed incentives for digital transformation and data exchanges across the energy sector.
We need standards for interoperability
Greater pace is needed in the development of enabling standards and frameworks for data interoperability. These standards and frameworks must be fit for whole system use.
We need to address gaps in system intelligence
A legacy of weak incentives for investment in low-voltage networks intelligence must be overcome and coupled with completion of the smart meter rollout to create an enabling baseline of industry data.
We need a system of clear prioritisation
Improved agreement and understanding of priority use cases for data could help create greater focus, pace and impact in the use of data through the energy transition.
We need culture change and new attitudes to risk
The industry needs to spread better understanding of agile innovation methods to promote iterative and fast-paced experimentation around ways to realise value from data. This must be coupled with new attitudes and tools for appreciating shifting risks to the system, companies and consumers.
We need to make it easy for consumer to participate
As we move to leverage data and digitalisation for decarbonisation we must keep the critical outcome of mass consumer participation in the system front of mind. To do this, we must give consumers strong incentives to authorise use of their data by providing products and services with compelling value, as well as user-friendly tools for managing data access.
Download the full report Paving the Way to Net Zero: Data and Digitalisation Requirements for the Energy Transition here