Getting Ready for the Challenges of a Digital Energy Sector

Digitalisation of the energy space comes with risks, but opportunities as well. By Kwok Sher Wei

With century-old power system practices being turned on its head in an increasingly digital world, energy sector players must be prepared to deal with the risks that come along with this transformation. Speakers at the second panel session of the Singapore-International Energy Agency (IEA) Forum highlighted three key challenges in particular.

1. Adaptability

The increasing digitalisation and decentralisation of power systems will require generation companies and grid operators to change the way they operate. Philippe Monloubou, Chairman of French electricity network operator ENEDIS, said that France had over 200 generators connected to its power system 10 years ago, and that this had grown to over 400,000 power producers today. In such an evolving environment, grid operators all over the world need to be adaptable to deal with this transformation.

2. Cyber Security

Digitalisation will cause information flow to be multi-dimensional, making communications infrastructure and IT systems exponentially more vulnerable. However, there are solutions that can help mitigate these risks. For instance, Martin Hauske, Nokia’s Asia Pacific Energy Segment Sales Leader, said that information transmitted through fibre optic cables can now be encrypted and potential virus attacks detected. 

3. Data Privacy Protection

While not an obvious challenge, electricity consumption data can provide personal insights into a consumer’s everyday life. For example, a consumption profile can show when a household turns on its cooker or air-conditioning. “Each initiative through the market has to comply with regulations to protect personal data. Regulations will need to be in place to protect the data of all consumers,” said Mr Monloubou.

While the panel focused on threats, they also believed that digitalisation also brings about opportunities for innovation. For instance, Singapore government agencies like the Energy Market Authority and Economic Development Board have partnered industry players to promote innovation; a practice that the panellists said should be continued.

Aya Yoshida, the IEA’s Head of Asia Pacific and Partnership Division, said that the sector needs to experiment and to “learn by doing”. To better accomplish this, regulators should have the right policies in place to encourage innovation while ensuring that the risks are managed.