Large consumers can help drive the clean energy transition – but they need better data

To build a net zero energy system by mid-century and limit global warming to 1.5 °C, the world needs to triple the installed capacity of renewables and double the annual rate of energy intensity improvements by 2030. However, the additional renewable capacity the International Energy Agency (IEA) expects to come online by the end of the decade falls short of what’s needed to meet international climate targets. Advanced economies and China are expected to install just 85% of what’s required, while emerging and developing economies would have to deploy almost twice as much as planned today. 

Large consumers can play an important role in bridging this gap by bringing additional investment in renewable capacity and deploying flexible demand to improve overall energy efficiency. In recent years, this has been led by large energy consumers, such as private companies and corporates, looking to reduce their emissions. This is significant, since the global industrial and commercial sector is responsible for more than half of global electricity demand and around 25% of global greenhouse gas emissions from power generation.

The IEA’s 2022 report Accelerating Decarbonisation Through Clean Electricity Procurement found that among the hurdles to ramping up decarbonisation efforts, the most common across regions was the lack of reliable data, particularly in emerging economies. Quality data, and access to it, is crucial to support clean energy strategies, measure progress and report associated emissions reductions. This commentary, the first in a series that will explore the link between decarbonisation and digitalisation, will examine how policy makers can enable stronger data ecosystems for clean electricity, empowering consumers to play a strong role in reducing energy sector emissions.

The availability of power system data – including wholesale prices, network constraints, large-scale renewable energy generation and aggregate demand – has improved in recent years. However, there are major challenges given the system’s growing complexity. As the deployment of batteries, heat pumps and electric vehicles surges, hundreds of thousands of assets tied to the transmission and distribution of electricity will evolve into an ecosystem with millions of data points.

Data transparency is also a concern. In Asia, which accounts for 62% of global power sector emissions, 684 million people have no or little data on their electricity supply and demand. And for industries and businesses procuring their own clean electricity, it is increasingly difficult to securely match real-time consumption data with information on the state of the grid, emissions intensity and the power mix at the point of consumption – all of which are crucial for effective decarbonisation strategies.

One issue is that power system data is often collected by and proprietary to different utility departments in vertically integrated companies or spread across different legal entities in liberalised power markets. These siloes hinder interoperability, or the capacity to transfer and use information across various platforms. Data may be owned and collected by diverse actors like network operators, individual consumers and power plant operators. Moreover, the data they collect may vary in terms of its format. This creates issues for consumers or service providers trying to pool data, especially across jurisdictions.

There are signs that collaborative work to address these problems is lagging. According to a recent US survey, only 29% of utilities have a data strategy, and more than half are at nascent stages of data governance. Policy makers must therefore work together quickly to develop solutions to the following challenges.

• Volume, or the amount of data generated, which makes data sets too large to store and analyse using traditional database technology.   
• Velocity, or the speed at which new data is produced and moves around energy systems, driving the need for faster data processing.
• Variety, or the increased types of data we can now use, including on end-consumption, emissions, power system operation and commercial transactions.
• Veracity, or questions about the trustworthiness of data, which grow with the increasing complexity of power systems and diversity of connected devices.
• Value, or the ability to extract quality information from huge amounts of data and identify key takeaways.

Another consideration is that data holds different value to different stakeholders. For example, a residential consumer with a flat regulated tariff may not need granular data on network energy use, whereas an industrial consumer may require data at 15-minute intervals, or even in real time, to optimise their energy purchasing strategies.

By addressing these challenges, policy makers can tap into the opportunities presented by the expanding ecosystem of power system data, allowing them to harness the benefits of digitalisation and reduce emissions more effectively.

Encouragingly, open data platforms for power systems are in development in many places. Data at the transmission network level – including information on generation, system balancing and wholesale prices – is the most widespread, with examples in Belgium, Brazil, Italy and the United States. Helpfully, these systems are designed to empower energy market actors to develop their own analytics tools, such as the IEA’s real-time electricity tracker, which provides data on electricity demand, generation and spot prices from more than 50 sources.

At the distribution and end-consumer level, platforms are still at a nascent stage, though examples in Brazil, Chile, France and the United Kingdom show promise. However, policy support and resources need to be allocated to ensure their viability beyond the pilot stage.

There are also emerging platforms to provide information on power system emissions based on historical or real-time data. For example, the US Environmental Protection Agency has developed an emissions and generation resource integrated database, which provides insights on emissions, emission rates, generation and resource mix based on data from 2021. Other platforms like RTE’s eCO2mix for France and Electricity Maps, which takes a global view, track the emissions intensity of electricity generation in real-time.

Even so, there are gaps. Information on emissions, generation or real-time network conditions is not readily available in all jurisdictions. And even in jurisdictions in which this data is available, there may still be a need for platforms to process and present this information in a meaningful way. Most importantly, as these platforms start to link small and large consumers, policy makers need to define clear guidelines to safeguard consumers’ private data while leaving open opportunities to safely grant third party access, which can facilitate greater collaboration and innovation.

Efforts are underway in a handful of jurisdictions to develop platforms that encompass the whole power system, from supply to demand, and provide transparent and standardised data governance, including trust and security measures that enable safe data sharing. Denmark and Switzerland were among the first countries to develop platforms to bring together smart-meter and power system insights. Denmark’s DataHub prioritises consumer ownership of data and clearly defines use cases for access by third parties. The United Kingdom is on the cusp of implementing a digital spine for the energy system to support data sharing and interoperability across the sector. Australia’s Project EDGE, developed in collaboration with utilities, the system operator and the regulator, defines clear guidelines for data ownership, access, quality and completeness. Meanwhile, in the European Union, six pilot projects are underway to develop solutions to tackle data interoperability challenges, while Member States are now required to provide consumers and interested parties with access to smart meter data in a non-discriminatory, transparent and interoperable way.  

However, more work is needed. Policy makers must act to support improved access to power system data and the development of robust data strategies and tools, which can carry high costs or require significant expertise. This includes setting standards for power system data access and interoperability that consider the following priorities:

Clear governance: Ensuring data quality and transparency, with guidelines for interoperability, is key for the efficient operation of power systems moving forward. Policy makers should collaborate with industry to define data ownership and access guidelines, use cases and clarify questions on data security and privacy.  

Linking data with value: Power system data can be leveraged to improve the efficiency of operations. Policy makers should introduce mechanisms allowing consumers, utilities and third-party service providers to capture that value, which will help investments in digitalisation pay for themselves.

Facilitating robust reporting: Digitalisation strategies should consider features to guarantee characteristics, such as location, time of generation and source, effectively capture clean energy attributes in a way that is useful for consumers, producers and even ministries. These standards would reduce the reporting burden on individual stakeholders and prevent issues such as double counting.

Promoting safe third-party access: While enabling third-party access can improve the development of strong data systems and innovation, policy makers should consider defining liabilities on the use and storage of private information, particularly to protect smaller consumers.

Enabling cross-border collaboration: Defining common principles for data, accounting and cross-border transactions, including energy imports, can facilitate the development of mass market data solutions, as opposed to current bespoke country-by-country or customer-by-customer approaches. This could offer further cost reductions.

The tools available to help consumers quickly decarbonise their energy use, especially from data, are improving – but global cooperation is needed to ensure they can be fully leveraged. Under the Digital Demand Driven Electricity Networks (3DEN) initiative, the IEA will convene a workshop on 27 November to explore how international collaboration could fast-track progress on this improved use of power system data, enabling interoperability and paving the way for demand-driven decarbonisation.