Digitalisation set to transform global energy system

IEA 3Digitalisation and Energy, IEA 2017. (Image source: IEA)Digital technologies are set to transform the global energy system in coming decades, making it more connected, reliable and sustainable, according to a new report by the International Energy Agency’s (IEA) Digitalisation and Energy

This is expected to have a profound and lasting impact on both energy demand and supply, said the report.

In this first comprehensive report on the interplay between digitalisation and energy, the IEA has analysed the role of digitalisation that transforms energy systems. From the rise of connected devices at home, to automated industrial production processes and smart mobility, digital technologies are increasingly changing when energy is consumed.

More than one billion households and 11bn smart appliances could participate in interconnected electricity systems by 2040. This would allow homes to alter when and how much they draw electricity from the grid.

Demand-side responses in building, industry and transport could provide 185 GW of flexibility and avoid US$270bn of investment in new electricity infrastructure, said IEA.

With the help of smart thermostats, the IEA report has observed that smart lighting and other digital tools could reduce their energy use by 10 per cent by using real-time data to improve operational efficiency. Meanwhile, massive amounts of data, ubiquitous connectivity and rapid progress in artificial intelligence and machine learning are enabling new applications and business models across the energy system, from autonomous cars and shared mobility to 3D printing and connected appliances.

“Digitalization is blurring the lines between supply and demand,” said Dr Fatih Birol, executive director at IEA. “The electricity sector and smart grids are at the centre of this transformation, but ultimately all sectors across both energy supply and demand, households, transport and industry, will be affected,” Birol added.

However, the report has also pointed out that in parallel with these opportunities, digitalisation is raising new security and privacy risks, as well as disrupting markets, businesses and employment. While the growth of the Internet of Things (IoT) could herald significant benefits in terms of energy efficiency to households and industries, it also increases the range of energy targets for cyber-attacks.

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