Regulatory Barriers and Dilemmas in Digital Utilities

The European electricity industry is committed to invest in clean power generation and transition-enabling solutions, reduce emissions and actively pursue efforts to become carbon-neutral well before mid-century. Digital innovation will be instrumental in achieving this goal, as it is playing an increasingly important role in the ongoing transformation of the European power sector.

The digital evolution of the power sector is steadily building more efficient, secure and sustainable electricity systems globally over the past decade. Utilities and energy businesses have introduced digital innovation to optimise processes while new technologies and services continue to disrupt the traditional power sector value chain. The result is a fertile ground for innovation and new horizons.

It is therefore time to explore digitalisation opportunities as a road towards a fundamental reinvention of the energy system, driven by electrification and decentralisation, and enabled by new technological developments.

The energy transition is not just a matter of getting wind turbines and solar panels installed in the shortest time possible. It is about a new way of looking at the energy system and developing new business models. Huge investments will be needed also for new digital tools, data analytics, IT platforms and for recruiting data experts. There is a growing need for closer interaction and a much more dynamic exchange in the electrical system. This will require a new role from power companies.

Given the pace and complexity of these developments, there is no clear path yet to predict what this role will be and how the utilities will endorse it.  There is no doubt however that digital transformations represent an opportunity for the electricity sector to get closer to its customers – catering to their preferences and convenience. This will offer our sector the possibility to develop a truly customer centred electricity world, based on trust and transparency. In today’s digitalised world, companies have access to behavioural data and customer preferences through commercial contracts, smart appliances and devices. Developing the right regulatory framework will be instrumental to ensure privacy principles while allowing the full power of digitalisation to shine.

There is a need to overcome Europe’s specific challenges such as the static development of regulatory frameworks alongside asynchronous investment strategies and a sectoral approach to digitalisation. Meeting these challenges will determine the European utilities’ ability to endorse effectively their new role in the digitalised, decentralised and decarbonised electricity system in the making.

Would you like to learn more about regulatory frameworks that come with digitalisation of the utilities sector? Check the Digital Utility Transformation Forum taking place in Amsterdam. You can download full event agenda here.

By Kristian Ruby – Secretary General at Eurelectric

Kristian Ruby is a widely recognized expert with a strong communication profile and extensive experience in political affairs. He joined EURELECTRIC from Wind Europe, where he served as Chief Policy Officer and was in charge of development and implementation of the political strategy. Prior to this, Ruby worked as a journalist and served seven years as a public servant in the Danish Ministries of Environment, and Climate and Energy and in the European Commission in the cabinet of the former Climate Action chief, Connie Hedegaard. Kristian holds a master degree in history and international development.

About the author: BIS Group