Digitalisation: essential technology to transform the power system and fight global warming but regulation is needed

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Enric R Bartlett
Universitat Ramon Llull, ESADE, Barcelona
enric.bartlett@esade.edu

Tackling global warming effectively will require a successful shift in how energy is both produced and consumed. In the electricity industry the use of renewable resources must increase dramatically. The digitalisation of the energy system is absolutely crucial in helping to achieve these goals. Although the technology already exists, in some places, we do not yet have regulations to enable its effective use.

On 10 October 2019, the European Council of Energy Regulators (CEER) published a consultation paper titled ‘Consultation on Dynamic Regulation to Enable Digitalisation of the Energy System’.^[1] This consultation highlights three implications of digitalising the energy system. These are:

• increasing the productivity of the current energy system;

• enabling new services that alter energy demand; and

• bringing new platforms and marketplaces that transform the sector.

But what needs to happen before these benefits of digitalisation can take place? The straightforward answer is generating data and making it accessible and interoperable.

In some countries including Spain, distribution system operators (DSOs), who manage the low and medium voltage transmission network which carries electricity to final customers, have rolled out ‘smart’ meters that provide a comprehensive range of new data. However, the full potential benefits derived from this this implementation in Spain, financed by customers, is on standby as it lacks proper regulation.

Currently, electricity customers or those authorised by them, can access data via DSO spreadsheets hosted in the Cloud. But the management process is overly manual. It more preferable outcome would have been to have mounted a sensor in ‘smart’ meter optical ports from the start of the rollout, so that the data could be transmitted wherever needed. But the regulations did not require this. Now, to add these functionalities, a further rollout will have to take place, which will increase costs to between €100 and €200 per meter.^[2]

Those wanting third-party access must respect existing privacy and data protection legislation, which means this potential game-changer in terms of new services offered is not activated. The regulator still has to decide if platforms or hubs can transfer this data to enable third-party access which would be managed by different DSOs or by the Energy System Operator (ESO). Information technology providers cautiously await the decision.

The rivalry from both the major energy players, has resulted in the Spanish Supreme Court to ruling that individualised data on electric power consumption is personal data.^[3] This was the result of a lawsuit filed by a DSO against a 2015 Resolution from the Secretary of State for Energy, which forces DSOs to send each consumer’s individualised hourly-load measurements to the ESO. DSOs had previously provided these statistics in an aggregated form.

The Supreme Court agreed with the plaintiff that procession of such data allows knowledge of a consumer’s habits, including the time they leave and return to their property, when they go to sleep, their busiest periods of energy consumption at home or in a business premises, the use of heating or cooling etc. In brief, such information lets the energy players know citizens/consumers’ private habits – a data set, which substantially concerns every consumer’s privacy.

The second question decided by the Court was if the data transmission to the ESO was permitted without the data owner’s (the consumer’s) prior consent. The Court considered that as the data transmission is to guarantee and control the energy grid’s reliable operation, it justifies forwarded to the ESO this personal data without their owner’s prior consent.

Ultimately, the Court declares that the need to develop the oversight role to assure the better system performance justifies forward to the ESO this personal data without their owner’s prior consent.

The Court’s award does not prejudge the final outcome on whether DSOs or the ESO has the right to manage the hub and enable third-party access to ‘smart’ meter data. The Spanish regulator is being pressed to draw up new rules on this issue, as to unlock the potential benefits to consumers, the energy system and help in the fight against global warming.