A sustainable future: Why digitalisation of the energy sector is key

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV Media network.

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Credit: Cisco / Enel

Pastora Valero is SVP Public Policy & Government Affairs at Cisco. Michele Bologna is Head of European Affairs at Enel.

If anything, the COP26 negotiations have shown us the need for more collaboration and political will to make global decisions to fight the climate crisisWe are at a critical inflection point where the societal demand for climate action is unprecedented.

On top of clear decarbonisation goals stemming from greater renewables targets, an electrification strategy for Europe is fundamental to increasing energy security and health benefits. Electrification and digitalisation are without a doubt the words that best describe the transformations taking place in the energy sector, overturning traditional models. We now look to the European Union for leadership in this transition to secure a global green recovery.

Digitalisation of the energy sector – why does it matter?

The entire landscape of the energy system is shifting as the industry experiences a rapid pace of change never seen before. With this comes the need for a profound transformation through digitalisation.

Digitalisation of the energy sector is crucial to meet our climate goals and secure a sustainable future, as it enables greater penetration of renewables, higher network efficiency and innovative customer services. This digitalisation also requires new approaches including the use of platform models to cope with complexity in all aspects whether in business, operations or technology.

With such technological advances, we have a unique opportunity to lead society’s transition to a green and digital future. Through intelligent networks, Cisco and Enel have been working together to roll out smart electricity grids to accelerate electrification and the transition to clean, renewable and distributed energy sources.

It’s all about flexibility, and reliability. Technology is enabling the grid’s transformation, connecting energy ecosystems, and optimising production and demand. Network management solutions are key for distribution efficiency, greater resilience, driving down costs, transforming to smart grids and allowing for more effective operation management and platform-based customer services.

To drive the uptake of new technologies in Europe, and ultimately hit our 2050 targets for more renewables and carbon neutrality, we need to strengthen policy collaboration between green and digital. This also means promoting partnerships in Europe’s most energy-intensive sectors. But none of this can work without the connectivity that is required to run smart grids. The EU must boost connectivity targets to accelerate infrastructure deployment. And to allow the deployment of smart grids, policymakers must ensure regulatory measures like TOTEX output-based regulation are in place and EU funds are put to best use.

Equally, the proposed e-Privacy Regulation should be amended to allow for greater innovation. The current draft ePR offers significantly narrower grounds for processing data than under GDPR and does not differentiate enough between the treatment of personal and non-personal data. This limits the collection of non-personal data in a disproportionate way, putting barriers in place to improve services for consumers and meet the goals of the EU’s Green Deal and Climate Law.

A secure digital world

With new possibilities brought about by digitalisation comes new risks to our infrastructure. Critical industries including the energy sector must be protected from new threats; digitalisation must be developed with privacy and security integrated from the earliest stages, going beyond minimum legal requirements. Whilst the energy sector has invested greatly in securing the infrastructure over the past years, we know there is never a zero-risk factor when it comes to cybersecurity.

Over the last decade, cyber-attacks directed at utilities have increased rapidly. Such disruption can have far-reaching socioeconomic consequences. Cybercriminals recognise the vital role of the sector and its economic value – highlighted when ransomware attempted to take down the operations of Colonial Pipeline, an operator responsible for half of the fuel flow on the East Coast of the US.

The European institutions have made significant steps in this direction with many legislative tools, including the NIS Directive (currently under revision), information security provisions under GDPR, the Cybersecurity Act and accompanying security certification framework, and the upcoming Cybersecurity Network Code. To ensure cyber threats are mitigated, security by design and by default across the whole value chain should be promoted, while enabling new technologies and business models to emerge.

The ongoing review of the NIS Directive should help to bring greater harmonisation across Europe and secure the energy sector from cyberattacks. With a Directive we recognise this is always going to be difficult, but the tools are there for effective national transposition. To achieve this, the strategy must preserve existing approaches and investments, and focus on mapping security requirements to European or internationally recognised certifications, to demonstrate compliance.

Governments, businesses and individuals all have a role to play in securing our critical infrastructures. To enhance response capabilities, upcoming legislation must define an Incident Taxonomy at EU level by a competent body such as the EU-DSO Entity or ENISA.

The digitalised energy industry needs a skilled workforce

Digital transformation, led by increasing reliance on automation and machine learning is shaping new requirements for the current and future workforce. The European Commission President Von der Leyen emphasised it in her State of the European Union speech: digital skills will be as crucial as connectivity to the green and digital transition.

With the Digital Compass for the EU’s digital decade, Member States have been assigned an ambitious objective of ensuring 80% of the European population are equipped with basic digital skills by 2030, as well as training 20 million ICT specialists.

ENEL and Cisco support the EU’s recommendations on digital skills and education. The pandemic has accelerated market dynamics that we know were already in play.

Responding to these ambitions, we are asking for partnerships between Member States, industry and civil society to collaborate and shape innovative learning solutions to bridge the existing and future European skills gap. With skills-to-jobs programmes like the Cisco Networking Academy, we can provide in-demand industry skills to help people from all backgrounds upskill and participate in the economy.

Be ambitious to secure an inclusive and sustainable future for all

The path to a more sustainable world is multifaceted and requires actions on all fronts. It’s up to each of us to shape a world that’s sustainable, digital and inclusive. As policymakers look to make good on the promises of COP26, we urge them to stay ambitious and strive to power the energy and digital transition that will secure an inclusive and sustainable future for all.

We, at Enel and Cisco, are committed to continued innovation in sustainable solutions, as well as working with governments across the world to help create a better place for generations to come.

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