As Europe accelerates its ambitious decarbonisation efforts, a new era in electricity distribution is emerging. This transformation necessitates a shift from the traditional transmission-heavy model to one where small-scale renewables, electric vehicles, and heat pumps are integrated directly into the distribution grid. To facilitate this transition, distribution system operators (DSOs) must expand, modernize, and digitalize their infrastructure.
A recent study by Eurelectric highlights the critical role of digitalization in enhancing the efficiency of building, operating, and maintaining Europe’s electricity grid. However, the study also identifies several bottlenecks that hinder the full potential of digital technologies.
Key Findings and Challenges
Today’s DSOs are tasked with ensuring reliable power supply, accommodating new grid connections, and securing data flows to protect customer privacy and cybersecurity. Despite these responsibilities, the expansion rate of Europe’s grid is lagging behind the increasing demand for new connections. Many existing infrastructures are decades old and not designed to handle the vast amounts of data generated by modern grid systems. Furthermore, the current flexibility management practices are insufficient to meet future needs.
The rise in renewable energy sources, which are projected to make up 42.5% of Europe’s final energy use by 2030, demands more sophisticated grid planning and forecasting due to their variable and decentralized nature. This underscores the need for digital-ready infrastructure as a critical prerequisite for the energy transition.
Insights from the Wired for Tomorrow Study
Eurelectric’s Wired for Tomorrow study involved a survey of thirty European DSOs, revealing that regulatory challenges are the biggest external barrier to digitalizing the grid, followed by a shortage of skilled workers. In regions where regulation is clear and supportive of investment—particularly in cybersecurity—DSOs exhibit the highest levels of digital maturity.
Kristian Ruby, Eurelectric’s Secretary General, emphasized the importance of regulatory support: “There are many opportunities today to digitalize grid build-out, operations, and maintenance, but to fully leverage them, grid operators must be supported by clear regulation to make their business go digital.”
Regulatory and Workforce Solutions
To promote digitalization, national regulators must encourage investment by ensuring appropriate compensation for DSOs. Additionally, the coherent implementation of new legislation under the twin green and digital transitions—spanning the Electricity Market Design, Renewable Energy Directive, and Data and AI Act—is crucial to avoid regulatory overlaps and inconsistencies.
The success of a digitalized power system also hinges on a skilled workforce capable of operating advanced digital infrastructure. The EU can help bridge the current skills gap by formalizing education, developing skills initiatives, and introducing EU-wide recognized certifications.
As Europe strives towards a sustainable energy future, the digital transformation of its electricity grid is not just an opportunity but an urgent necessity.
