Energy sector ‘must tackle risk averse approach to digital’

The energy system is being hindered by poor quality, inaccurate or missing data, while crucial information is often restricted or hard to find, a new report has concluded.

The Energy Data Taskforce, commissioned by government, Ofgem, and Innovate UK, has today (13 June) issued its five recommendations to modernise the sector’s approach to digitalisation and tackle a “culture of risk aversion” which has dissuaded a data-driven approach.

Launching the report exclusively at the Utility Week Energy Summit this morning, the taskforce chair Laura Sandys will set out a blueprint based around two key principles – filling gaps through requiring new and better-quality data, and embedding the presumption that data is open. She will also stress that the sector faces a skills gap of the right combination of data, energy and engineering talent, which urgently needs to be filled.

The taskforce, which is run by Energy Systems Catapult, has laid out in the report a staged approach towards achieving a “modern, digitalised energy system”. This would start with understanding the data that exists, which of it is most important, what is missing and how access can be made easier. The next step would be to focus on infrastructure and asset visibility and then layering operational data across the assets to support system optimisation. The report says the industry should then focus on open markets – aiming to achieve much better price discovery through unlocking new markets, informed by time, location and service value data. Finally, it recommends better data sharing with regulators to enable a more agile and risk reflective approach to regulation.

Sandys said: “Data and digitalisation, while not the sole enablers of energy system transformation, are essential to optimising the value of assets and infrastructure, driving innovative services, better understanding risks, increasing system resilience, and driving us towards net-zero carbon and decentralisation at best value to consumers.

“In addition, greater data openness will provide much superior price and market visibility, increase liquidity and drive investment into the right technologies, locations and solutions for the system, all delivering better system and price outcomes for consumers.

“The taskforce has found that the energy sector faces a unique set of challenges which have hindered the progress towards a more digitalised, data rich system.

“A culture of risk aversion has dissuaded collaborative, data driven solutions, while a skills gap, where it is hard to get the right combination of data, energy and engineering talent, needs to be filled.”

The recommendations in full are:

• Recommendation 1: Digitalisation of the Energy System – Government and Ofgem should use existing legislative and regulatory measures to direct the sector to adopt the principle of Digitalisation of the Energy System in the consumers’ interest.
• Recommendation 2: Maximising the Value of Data – Government and Ofgem should direct the sector to adopt the principle that Energy System Data should be Presumed Open, supported by requirements that data is ‘Discoverable, Searchable, Understandable’, with common ‘Structures, Interfaces and Standards’ and is ‘Secure and Resilient’.
• Recommendation 3: Visibility of Data – A Data Catalogue should be established to provide visibility through standardised metadata of Energy System Datasets across Government, the regulator and industry.
• Recommendation 4: Coordination of Asset Registration – An Asset Registration Strategy should be established in order to increase registration compliance, improve the reliability of data and improve the efficiency of data collection.
• Recommendation 5: Visibility of Infrastructure and Assets – A unified Digital System Map of the Energy System should be established to increase visibility of the Energy System infrastructure and assets, enable optimisation of investment and inform the creation of new markets.

Energy and clean growth minister Chris Skidmore, who is covering the energy brief in Claire Perry’s absence, welcomed the report, saying: “Transparent and accessible data will become ever more important as the UK develops its smart, green energy system. The way we share and harness that data will help us all as we move towards the greater use of low carbon technologies such as solar panels, battery storage systems and electric vehicles.

“The recommendations in this report will help to ensure data is at the forefront of our low carbon energy system which will continue to go from strength to strength as we power towards becoming a net zero economy by 2050.”

Martin Cave, Ofgem chairman, who is also speaking at today’s Energy Summit, said: “Data will play a crucial role in enabling competition and innovation to drive down prices for customers and provide them with new products and services.

“This is why Ofgem fully supports the Taskforce’s five recommendations to improve data use. We will be working with BEIS, consumer groups and the industry to ensure better use of data unlocks a brighter future for energy consumers.”

Philip New, Energy Systems Catapult chief executive, said: ”The transformation of the energy system will require an acceleration in the pace of innovation across the sector – digitalisation and data will be a key enabler of that innovation.

“We have been very encouraged by the support from the sector in developing these recommendations.”

Responding to the findings, Sir John Armitt, National Infrastructure Commission chair, said: “Data has the power to transform how the UK generates and uses energy, but to be effective, it needs to be shared as widely as possible. It’s positive the Taskforce has therefore accepted the Commission’s recommendations for improving data sharing, so that the UK can harness the benefits of smart infrastructure.”

Lawrence Slade, Energy UK chief executive, said: “This report sets out a positive vision for a more transparent and accessible energy system that will benefit market participants and customers alike by enabling decarbonisation and increasing innovation across the system. It is vital we capitalise on the gathering momentum in this area.”

Fintan Slye, National Grid Electricity System Operator director, said: “Digitalisation and data is essential to managing the energy system efficiently and securely through the energy transition.  We welcome this industry-wide digitalisation strategy and we look forward to closely supporting its delivery.”

Mark Bygraves, Elexon chief executive, said: “Elexon welcomes the Energy Data Taskforce’s report and believes that it is a valuable contribution to facilitating the development of innovative products for the energy market for the benefit of the end customer.

“We will help initiate the implementation of the report’s recommendations by seeking where necessary, to facilitate a change to the Balancing and Settlement Code this year to further embed the principle of Open Data within the BSC.”