Distributed renewable energy and the digital transformation of energy systems - Challenges and opportunities for Latin America

Transitioning to a net zero energy system requires urgent and massive changes. In the IEA net-zero energy scenario (NZE), 630 GW of solar PV are added to the system yearly by 2030, four‐times the record levels set in 2020, and 100 million buildings are equipped with residential PV by 2030 (from 25 million in 2020). This requires additional system flexibility to continuously balance electricity supply and demand and maintain grid stability, with more than 500 GW of demand response brought to market by 2030 in the NZE. At the same time investments need to nearly triple to an average of almost USD 800 billion by the late 2020s, with investments in digital assets must increase eightfold in the NZE.

Over the coming decades, digital technologies are set to make energy systems around the world more connected, efficient, reliable and sustainable, playing a key role in transforming distributed energy resources into valuable grid assets, with the right incentives. Digitalisation allows to identify the optimal placement of DER, make them visible to system operators, and allow to monitor and control them in real-time, supporting power system security and reliability, as well as the provision of flexibility.

Digitalised energy systems in the future may be able to identify who needs energy and deliver it at the right time, in the right place and at the lowest cost. By 2040, 1 billion households and 11 billion smart appliances worldwide could actively participate in interconnected electricity systems providing 185 GW of system flexibility, facilitating the integration of distributed energy resources.

Energy system digitalisation is gradually emerging around the globe with still a modest penetration in Latin America. Despite considerable deployment of distributed PV resources across countries, advanced meter infrastructure roll-out is still below 10% in the region, and time-of-use tariffs are being rolled-out at moderate pace. With distributed PV (DPV) set to expand in the coming years, accelerating the use of digitalised technologies in Latin America can optimize the deployment of distributed resources, enhancing systems’ flexibility and boosting efficiency.

The complexity of the digital transformation of the energy system, raises issues around planning, financing and political economy (who benefits and who pays), technology and innovation, as well as cybersecurity. Governments have a role to set a conducive framework for this transformation, and realise the benefits while mitigating risks. This workshop will explore international experiences using digital solutions to optimize distributed generation and discuss next steps for Latin America.

The aim is to provide both an international and regional perspective on optimising the deployment of distributed energy resources through digital solutions. Within this broader topic, concrete challenges and opportunities confront policymakers and regulators in each particular region. Country-specific experiences which include, but are not limited to, market design, cybersecurity, data management and financing, merit a platform for exchange, which this event hopes to facilitate.

The IEA gratefully acknowledges the Italian Ministry for Ecological Transition for their support for this webinar as part of their contributions to IEA’s Digital Demand Driven Electricity Networks (3DEN) Initiative on power system modernisation and effective utilisation of demand side resources through digitalisation and to the Clean Energy Transitions Programme.