In the past decade there has been a marked increase in the use of information and control technologies in the energy sector, most notably with the introduction of smart metering. The use of digital technologies in the energy sector has increased substantially and will continue to do so, with growing focus on the potential for technologies such as big data, machine learning and AI, the internet of things and distributed ledger technology. Taken together, these processes represent a ‘digitalisation’ of energy, which could fundamentally change the way the system operates. Examples of digital applications include machine learning to predict weather patterns and improve market operations; using big data analytics to optimise small-scale generation and storage; in-home sensors, appliances and electric vehicles connected to the internet; and blockchain-enabled peer-to-peer energy trading. These innovations could allow for a more flexible, versatile energy system that is better able to integrate heat and transport into the power system, as well as variable renewable electricity.   

The UK’s energy system has evolved over decades in a very centralised and analogue way, where a few large actors trade and direct flows of energy. Digital technologies can have a disruptive effect on this system but face technical and regulatory challenges in their application. For example, these technologies are underpinned by greater use of and access to data, but the datasets currently used in the UK energy system are notoriously fragmented and siloed, such that they are difficult to integrate with one another for cross-sectoral working. In response to this concern, BEIS, Ofgem and Innovate UK set up the Energy Data Taskforce to develop recommendations for how industry and the public sector can facilitate competition, innovation and markets in the energy sector through improved data availability and transparency. The Taskforce’s recommendations were published in June 2019, which the UK Government has fully endorsed, including in the 2020 Energy White Paper. 

This POSTnote will set out how digital technologies are being applied to the energy sector, focusing on a few of the most relevant technologies and the outcomes of the Energy Data Taskforce. It will examine the potential benefits of digitalisation as well as technical, policy and regulatory challenges in their deployment. 

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