[Premium] Digitalisation and Energy Efficiency

The efficient use of energy resources will only be possible through digitalisation, as it unlocks untapped capacity, introduces new actors into the system, improves automation and reduces maintenance costs. This was the consensus at economic think-tank Bruegel, who hosted a discussion on the topic in Brussels January 17.

“Digital companies are the main driving force for innovation in energy efficiency and renewables,” said Laura Cozzi, who runs the energy demand division of the International Energy Agency (IEA). For a reason: data centres have been using more electricity in recent years and will continue to do so. They now use around 3% of the world’s electricity supply and emit 2% of all greenhouse gases.

The IEA’s first report on Digitalisation and Energy (previously analysed by NGW), finds that different industry sectors are already picking up energy efficiency technologies, while households are still lagging behind. The latter will of course depend on consumer behaviour, but the IEA’s finds that the greatest energy-saving potential lies in the use of natural gas for heating.

At the industry level, digitalisation enthusiasts aim to transform passive hardware into active components. The transmission cables themselves will integrate a number of sensors that will provide real-time information, allowing for targeted maintenance and data collection that will make the systems more efficient, says Hans Nieman of Prysmian Group, energy and telecom cables and systems manufacturer.

Distribution system operators (DSOs) will be the ones with the greatest need for the flexibility offered by digitalisation, as that is where renewable sources of energy typically enter the grid (including small-scale consumers with renewable energy installations also known as “prosumers”). “There is a real paradigm shift on the demand side,” argues Jean-Jacques Marchais from Schneider Electric, and DSOs need additional automation and real-time information to manage the new multi-directional flows of energy, as opposed to the traditional unidirectional system.

As this discussion was taking place, the European Parliament adopted its position on reforming the EU legislation on the topic, agreeing on a 35% EU target of energy efficiency by 2030, an increase compared to the 30% included in the original draft. The 35% is itself a compromise between a 40% EU energy efficiency target underpinned by binding national targets (which has been the Parliament’s position for years), or a 30% EU target without binding national targets (pushed mainly by the centre-right party).

According to the European Commission’s scenarios to 2030, a 1% increase in efficiency reduces gas imports by 4.1%. This means that from current gas imports at 327.5bn m³ in 2016, imports in 2030 would be reduced to an estimated 272.7bn m³ with a 30% target, or to 220.2bn m³ with a 35% target.

Before the 35% target is made into law however, the European Parliament will have to negotiate with the Council of the European Union, who has a draft of its own. The latter still prefers a less ambitious 30% target, and greater freedom for countries to reach their (non-binding) targets. Negotiations start in February.