DIGITALIZATION AND

THE FUTURE OF
POWER GRIDS

SAFER, SMARTER, GREENER

02 DIGITALIZATION AND THE FUTURE OF POWER GRIDS

01
INTRODUCTION

As the pace of the energy transition accelerates, Transmission and distribution system operators sit at the
DNV GL's Energy Transition Outlook forecasts that by heart of making the energy transition successful. Their
2050 power generation from solar photovoltaic and wind work is vital to making the efficient integration of variable
energy will be 36,000 terawatt hours per year, more than renewables possible whilst at the same time ensuring
20 times today’s output. Globally, renewable energy will the reliability and safety of the power system. Yet, the
provide almost 80% of the world’s electricity by 2050 transmission and distribution (T&D) industry is facing
according to the report. huge disruption, not only from the influx of renewables
but also changes in energy pricing, aging infrastructure
Integrating these vast quantities of variable renewable and consumer demand. System operation is becoming
energy sources will require more than $1.5 trn of annual increasingly complex with a huge increase in the amount
investment in the expansion and reinforcement of power of information which must be exchanged between market
grids by 2030. This will include both ultra-high-voltage players, through digital systems. New technologies and
transmission networks and extensive demand-response digital tools hold the key to meeting these challenges
solutions to balance variable wind and solar power. head on, but there are currently barriers standing in the
way of digitalization in the T&D industry.

About the research:

This report is based on a global survey1 of 1,919 energy
industry professionals. The respondents represent a
range of business sizes from start-ups to large corporates
and a range of functions within the industry, from
board-level executives to senior engineers, developers
and financiers.

1
Conducted by Foresight Factory in December 2018 and January 2019
 DIGITALIZATION AND THE FUTURE OF POWER GRIDS 03

02
THE PROGRESS OF DIGITALIZATION IN
THE T&D INDUSTRY

Digitalization in the T&D industry isn’t new. The power part of their publicly stated strategy, this falls to 39% for
industry has a history of applying digital tools and Transmission System Operators (TSOs). Compounding
upgrading analog systems. This includes the automation this, one third of the T&D industry considers itself less
of network operations, the emergence of sensors and advanced than the wider energy industry in its current
data analytics to enable smart asset management leading application of digitalization.
to a better utilization of main system components. The
ongoing decentralization of generation requires more Despite this, when it comes to the perceived benefits of
sophisticated Supervisory Control and Data Acquisition digitalization, TSOs list improving operational efficiency
(SCADA) and related grid-operation tools. Despite this (64%), improving decision making (61%) and improving
clear drive towards digitalization, our research of almost cyber security (36%) as top priorities. DNOs list improving
2,000 stakeholders within the energy industry reveals cost efficiency (42%), improving decision making (52%)
that only just over half (52%) of Distribution Network and improving operational efficiency (60%) as their top
Operators (DNOs) have digitalization as a core priorities.
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03
WHICH TECHNOLOGIES ARE IMPACTING
THE T&D INDUSTRY?
TSO
DNO

Cyber security 76%

67%
67%

67%
Data visualization
71%

73%
Automation and digital workflow
68%

Advanced analytics (e.g. artificial 47%

intelligence and machine learning) 45%

30%
Cloud computing
50%

36%
IoT (e.g. sensors and edge computing)Cloud computing
42%

18%
Drones and UAVs
23%

30%
Coding
26%

12%
Augmented and virtual reality
18%

24%
Distributed computing
20%

9%
Blockchain
18%
 DIGITALIZATION AND THE FUTURE OF POWER GRIDS 05

04
LACK OF DIGITAL MINDSET

Enabling successful digital transformation goes beyond technology. For an organization to truly benefit from
any new approach, every layer of the organization needs to be involved and every employee needs to be on board.
Currently, 40% of respondents believe that a lack of digital mindset is a barrier within their organization. In this case,
digital mindset was defined as lack of staff engagement with digitalization and/or difficulty convincing staff to
change their ways of working. So although the technology and ambition might be there, unless you can persuade the
entire organization about the benefits of digitalization, you’re fighting a losing battle.

For the wider energy industry, our research reveals unanimous recognition that digital skills training is needed,
with 91% of participants regarding it fundamental for their organization to invest in digital skills training, with
71% considering this important for immediate investment.

This statement also rings true for the T&D industry. The findings reveal that the T&D industry is heavily focused on
the skills that its workforce will need for the future. When questioned about which skillset would be most important
for the industry to have in its workforce, the following skills were highlighted as most in demand by the T&D industry:

48% Understanding 47% Data science 41% Big data

and application analytics
of IoT systems

67% of respondents also highlighted a need for employees with combined data and domain expertise;
this comes as no surprise in an industry where IT skills have always been separated from T&D expertise.
55% also said the industry needs more strategic planning in this area. Despite the need for new skills to enable
digitalization, just 41% and 36% of DNOs and TSOs respectively, said that their organization takes a proactive longer-term
view when considering goals.
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05
THE NEED FOR SYSTEM INTEGRATION
83% of respondents highlighted that the industry needs systems and bringing together the multitude of data
more employees with system integration skills. This points will be critical to the success of future-proofing
comes as no surprise. The power industry is continuously T&D systems, and state-of-the art system operation.
adding different digital systems. Integrating these
 DIGITALIZATION AND THE FUTURE OF POWER GRIDS 07

06
THE DATA SHARING HURDLE
The power industry is one of the most highly regulated decisions based on this to reduce cost and improve
in the world. The importance of a reliable power supply operations. Progress will depend on adequate data
for our economy and society means that the risk of sharing by grid companies to facilitate combined data
disruption needs to be minimized at every opportunity. harvesting and data hubs, where this is beneficial to
The high security considerations surrounding data about improve efficiency and optimize operations, while
operations and the status of assets means that data addressing regulatory and consumer concerns regarding
sharing comes with challenges. This rings true for our security. According to the respondents from the industry,
respondents, with 45% citing data sharing concerns as a this barrier may not be as much of an issue as one
barrier to digitalization. However, much of the potential might assume, with just 21% and 12% of DNOs and
of digitalization is in the ability to share data and make TSOs respectively saying that regulation is a barrier to
digitalization.

07
LOOKING TO THE FUTURE
The T&D industry has changed beyond recognition in In order to meet the demands of a rapidly changing
the past few years, prices have reduced, technology energy system, the T&D industry needs to lead the
is advancing, and grid operators have taken action to way by embracing new digital technology, upskill their
improve operations, while at the same time adapting to a employees and encourage a new generation of T&D
major shift in both generation and demand patterns. engineers to enter the industry and ensure that a lack of
digital mindset doesn’t hold it back.
SAFER, SMARTER, GREENER

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Email: contact.energy@dnvgl.com
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