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General topics
Digitalisation
Digitalisation entails comprehensive integration of digital technologies into the generation, transmission, distribution, and consumption of electricity, as well as into the coordination among actors and the governance of the system. It encompasses sensing and monitoring, communication networks, data analytics, automation, and the platforms through which market participants interact.
Why this matters
Smart grid transitions depend on digital tools that did not exist in conventionally operated electricity systems. Advanced metering infrastructure generates the granular consumption and grid-state data on which time-varying tariffs and demand response programmes rely. Distributed energy resource management systems allow operators to coordinate storage, solar generation, and flexible loads across distribution networks. Machine learning and other analytical methods improve forecasting, fault detection, and operational decisions. These tools reshape how grid codes are implemented, how markets clear, how operating practices evolve, and how data governance arrangements are designed.1)
Digitalisation does not simply add a digital layer to an existing electricity system. It changes what the system can do, who can participate in it, and what governance arrangements are needed to steer it toward broadly shared outcomes.
At the same time, digitalisation introduces cybersecurity risks, raises governance questions around data ownership and privacy, and reshapes the skills that actors across the system need. The speed at which digital tools evolve can outpace the institutional frameworks meant to govern them, creating gaps between what is technically possible and what is regulated, standardised, or equitably accessible.2)
A shared definition
Digitalisation in the context of smart grid transitions describes the integration of digital technologies, data infrastructure, and analytical tools into the electricity system, its markets, and its governance. It encompasses both the deployment of specific technologies and the broader organisational, institutional, and behavioural changes that accompany digital integration. Within ISGAN's scope, digitalisation covers four main strands: coupling ICT integration with energy system electrification, enhancing grid management and decision-making through analytics, improving communication and coordination among actors, and advancing integration of renewable energy solutions.3)
| Digital capability | Key aspects | Examples of technologies |
|---|---|---|
| Sensing and monitoring | Real-time visibility into grid conditions, consumption patterns, and asset health | Smart meters, grid sensors, phasor measurement units, weather monitoring |
| Communication and data exchange | Information flows between system components, actors, and platforms | Fibre, cellular, low-power wide-area networks, data exchange standards and protocols |
| Analytics and intelligence | Pattern recognition, forecasting, optimisation, and decision support | Machine learning, statistical modelling, digital twins, big data platforms |
| Automation and control | Automated response to system conditions without manual intervention | SCADA, distribution management systems, DERMS, automated switching |
| Platforms and markets | Digital coordination of transactions, services, and market participation | Energy trading platforms, flexibility marketplaces, aggregation platforms |
These strands are interdependent: analytics depends on sensing and communication, automation requires analytics and communication, and integrated platforms draw on all of the above. A systems-of-systems approach recognises that digitalisation creates connections between previously separate technical and organisational domains, enabling new levels of interoperability across and among organisations.4)
Perspectives
Digitalisation intersects with every aspect of smart grid transitions. The actors perspective reveals how digital tools change behaviour, competences, and power relations. The technology perspective focuses on infrastructure and the standards that make it interoperable. The institutional perspective highlights the governance frameworks that steer digitalisation toward broadly shared outcomes.
Actors and stakeholders
All actors in the electricity system increasingly depend on digital tools for coordination, decision-making, and market participation, though to very different degrees. System operators rely on digital platforms for real-time grid management, and aggregators use similar tools to bundle and dispatch distributed resources. Consumers interact with the system through smart meters and energy management apps, where usability often determines the extent of their participation. Digital tools can also establish new collaboration arrangements, connecting actors who have not previously interacted.
Kenya — M-KOPA pay-as-you-go platform
Digital payment systems and embedded connectivity in solar home systems create a direct digital relationship between off-grid energy service providers and low-income households, tying energy access to digital infrastructure.5)
Germany — SINTEG digital coordination programme
Five showcase regions tested how digital platforms could coordinate distributed generation, storage, and flexible demand across actors who had previously operated independently, demonstrating new digitally enabled coordination patterns at regional scale.6)
India — AMISP smart meter programme
The Advanced Metering Infrastructure Service Provider model under the Revamped Distribution Sector Scheme creates a new digitally focused actor category, with private companies responsible for deploying, operating, and maintaining metering infrastructure on behalf of distribution utilities.7)
Technologies and infrastructure
Interoperability, scalability, and cybersecurity are central concerns at every layer of digital infrastructure in the electricity system. Advanced metering generates granular consumption data but requires communication networks and IT back-ends to process it. SCADA and distribution management systems form the operational backbone of grid control, while distributed energy resource management systems extend coordination to the grid edge. The Internet of Things connects an expanding array of sensors and controllable devices. AI-based analytical tools and digital twins support predictive maintenance, system optimisation, and scenario analysis. Each additional layer introduces dependencies on communication infrastructure, data standards, and cybersecurity measures.8)
Singapore — grid digital twin and DERMS development
The Energy Market Authority and SP Group are developing a grid digital twin and a distributed energy resource management system to strengthen grid reliability, support EV integration, and optimise asset management across the network.9)
South Korea — KEPCO AI-based substation management
Korea Electric Power Corporation has deployed private 5G networks, IoT sensors, and AI-based diagnostics at substations to enable real-time facility monitoring and predictive maintenance across its transmission and distribution infrastructure.10)
Brazil — smart meter rollout in distribution concessions
Distribution concession holders are deploying smart meters at scale under regulatory requirements, with pilot programmes testing several hundred thousand units in São Paulo, while communication infrastructure coverage across geographically diverse concession areas remains a practical constraint.11)
Institutional structures
Governance frameworks for data access, privacy, cybersecurity, and market participation shape how digitalisation unfolds in practice. Regulatory decisions about who owns smart meter data, who can access it, and under what conditions directly affect whether third-party innovators can develop new services. Cybersecurity regulations for critical electricity infrastructure protect the system but need to balance security requirements with operational flexibility. Standardisation of data formats and communication protocols supports interoperability yet requires coordination among regulators, standards bodies, and industry. The institutional choices made around digitalisation determine whether its benefits are broadly shared or concentrated among actors with superior digital access.
European Union — data governance under the Electricity Market Directive
Directive 2019/944 establishes principles for consumer access to energy data and third-party data sharing, creating an institutional framework for data-driven innovation in electricity services.12)
United States — NIST smart grid interoperability framework
The framework provides a reference architecture and standards roadmap for digital interoperability across the electricity system, addressing the governance challenge of coordinating digital standards across a fragmented regulatory landscape.13)
Japan — cybersecurity governance for electricity infrastructure
METI coordinates cybersecurity policy for the electricity sector through its Industrial Cybersecurity Study Group, which has published supply chain security measures for power control systems and works within the broader framework of the Cybersecurity Basic Act.14)
Key terms
| Term | Definition |
|---|---|
| Digitalisation | The integration of digital technologies, data infrastructure, and analytical tools into the electricity system, its markets, and its governance, encompassing both technical deployment and the organisational and behavioural changes that accompany it.15) |
| Advanced metering infrastructure | The system of smart meters, communication networks, and data management platforms that enables two-way communication between utilities and end users, providing granular consumption and grid-state data for time-varying tariffs, demand response, and consumption analytics.16) |
| Interoperability | The ability of different digital systems, devices, and platforms to exchange and use data effectively, enabled by shared standards and protocols.17) |
| Digital twin | A virtual representation of a physical grid asset or system that supports simulation, monitoring, and predictive analysis using real-time data.18) |
| Cybersecurity | The set of technologies, processes, and practices designed to protect digital systems, networks, and data from unauthorised access, damage, or disruption, a growing concern as electricity infrastructure becomes more digitally connected.19) |
Distinctions and overlaps
Digitalisation vs. digitisation
Digitisation refers to converting analogue information into digital form, for example replacing paper meter readings with electronic data. Digitalisation is broader: it encompasses using digital technologies to change business processes, actor interactions, and system operations. Smart grid transitions involve digitalisation, where digital tools reshape how the system is operated, rather than simply digitising existing workflows.
Digitalisation as enabler vs. digitalisation as driver
Digitalisation enables smart grid functions such as demand response, distributed resource coordination, and real-time monitoring. It can also drive changes that were not originally intended, such as concentrating market power among platform operators, altering privacy expectations, or creating dependencies on digital infrastructure.20)