Alex Underwood, energy and infrastructure lawyer, Osborne Clarke Distributed energy, Electricity transmission/distribution, Energy networks, Energy retail, Generation, Smart metering, Opinion

Alex Underwood explains why the government’s Energy Data Taskforce is a step in the right direction.

Put simply, the smart energy system of the future will be developed on the foundations of big data. It therefore makes sense for that data and its frameworks to be as accessible and robust as possible.

In recognition of how intrinsic data is to the success of the government’s keynote energy policies (as set out in the Industrial Strategy, Clean Growth Strategy and Smart Systems & Flexibility Plan), the government and Ofgem recently announced the creation of an Energy Data Taskforce, led by Energy Systems Catapult and chaired by Laura Sandys of Challenging Ideas [who has written a column in this week’s issue, facing page].

The announcement acknowledges industry concerns that the current lack of transparency of, and access to, data is a significant barrier to the transition to a smart and flexible energy system, and to achieving the three D’s: decarbonisation, decentralisation, and digitalisation.

Therefore, the purpose of the taskforce is to report on gaps in datasets and provide recommendations on how data can be used more effectively in the energy system.

The types of data to be covered are helpfully categorised into five key categories: assets (what, where, how used); operation (utilisation, capacity, constraints); market (prices, trades, contracts); personal (smart meter information and individual usage profile); and supplementary (weather, fuel poverty, building performance).

A step forward

The taskforce is a welcome step for an industry notorious for the complexity of its data flows and interaction between market participants. Despite positive reforms from lawmakers in the UK and Europe, the legal and market framework trails behind the technological capabilities and deployment. Consequently, businesses are operating within inadequate legal frameworks and parameters. By mapping existing data use the taskforce will be able to identify a large amount of potential improvement but equally issues that should be addressed but are intractable and outside of the UK’s control.

In recent years we’ve seen industry moving away from centralised large generation, with limited data points, to smaller-scale flexible energy with far more associated and fast-moving data. Energy system designs such as National Grid’s recently suspended capacity market is an example of this and it is necessary for networks that are less predictable as a result of the rise of renewables

The taskforce can help network operators focus on solutions to capacity issues using localised energy generation and storage. Localised third party platforms (such as Open Utility’s Piclo Flex) provide a market forum for real-time data about energy asset performance and whether they can be utilised to solve network issues.

The more data that networks receive around consumption, generation, import, constraints and real-time carbon in the generation mix, the clearer picture they have about system requirements. It will also arm them with better insight into how best to tender for future proofing through efficiency, low carbon and where practicable avoid expensive reinforcement.

As part of the taskforce’s review, they will also be able to identify what data flows could better connect willing business-to-business participants. For example, at present the main way for a DSR provider or a behind-the-meter energy services company (such as CHP operator) to understand a site’s demand profile is by way of making bilateral contact and usually entering into a confidentiality agreement. However, if platforms were set up within a distribution network operator’s area that allowed energy users to participate by publishing half-hourly data (on an anonymised basis), then energy services providers could evaluate profiles and identify what savings they could provide. Data filters could be included around preferred types of technology or minimum levels of savings prior to a user being matched with a provider.

The wider impact on new technologies

In respect of the residential market, the implementation of the General Data Protection Regulation (GDPR) has sought to broadly align European use of personal data. For consumers this means more active participation and for businesses communication of a purpose for data use and a secure framework.

This is important as we look for ways to use data more effectively in the energy system. For example, households, being prosumers, provide aggregators and networks with the ability to feed into local grids and support local infrastructure – such as the expansion of how and where electric vehicles can be adopted on a more widespread basis.

The trials undertaken so far have shown there is an appetite for more efficient and dynamic energy use where made available. The taskforce could usefully examine situations where a legitimate interest in data produced by consumers in a network replaces a requirement for explicit consent.

Furthermore, it’s worth noting that using the data generated from artificial intelligence and machine learning technology – for performance analysis, for example – could then become unlawful if it begins to make automated decisions based on such data, given that consent may not be required.

There are also concerns over security as the energy sector continues to digitally transform. In a recent study by The Economist Intelligence Unit of C-suite executives in 11 countries, commissioned by Osborne Clarke, we found that while senior executives in the energy and utilities sector were the most likely to have assessed the opportunities arising from next-generation connectivity and the opportunities brought by the use of data, the top concern and barrier to implementation was security. It’s understandable given that the move from a centralised to distributed opens up more entry points, causing the sector to become more vulnerable to cyber-crime. This needs to be taken into consideration as the government furthers its energy strategies in a digital-first world.

With this in mind, the taskforce now has an excellent opportunity to address these sometimes competing concerns and help harness data to truly transform processes within the energy sector. Only by doing so will we see the unlocking of innovation while maintaining critical safeguards.

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