Paving the path to a digitalised energy system

For those energy geeks amongst us, Christmas 2020 came early with the Climate Change Committee’s publication of its Sixth Carbon Budget, closely followed by BEIS’s publication of the much-anticipated Energy White Paper, with its promise of multiple, detail papers through 2021 in the countdown to COP26.

Indeed, the industry is eyeing the imminent release of the Energy Data and Digitalisation Strategy and the net zero Strategy, due before COP26. 

The role of data and digitalisation in delivering just energy and climate transitions is unquestionably growing.  As other sectors look to accelerate their own journeys towards net zero by decarbonising their energy use, the energy sector is increasingly recognised to be at the vanguard of the battle to limit climate change.

Following the launch in May of the Energy Digitalisation Taskforce, once again entrusted to Laura Sandys, Utility Week’s and CGI’s roundtable on the Data and Digitalisation Requirements for the Energy Transition and the subsequent report make a timely contribution to this industry discourse.

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

The three outcomes identified were:

1. Prioritised use cases on which the sector can collaborate to deliver solutions,
2. A cultural shift, especially in attitudes to risk, and
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, and
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 was seen as having a pivotal role to play in leading the prioritisation of use cases and working with the industry to establish appropriate incentives that unite the sector behind solving prioritised 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 prioritisation 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 recognise 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 recognised that embedding such a significant cultural shift wouldn’t be without pain.

It was also recognised 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 GB smart metering programme 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 standardisation were cited.

Whilst 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 identified by this report will contribute accelerating the pace in the race to net zero.

Contact me to continue the conversation or read the latest report.