Europe has the chance to create a world-leading electricity grid. However, Dr Sabine Erlinghagen, CEO of Siemens Grid Software, argues that this can only happen if the EU embraces grid digitalisation.
Erlinghagen spoke with Euractiv’s Christoph Schwaiger about the grid-related challenges that digital solutions can help solve while providing a great return on investment.
CS: Maybe we can start with a snapshot of where we stand now. Are our current policies helping or hindering us when it comes to where we want to take our grid infrastructure?
SE: First of all, we absolutely welcome the plan of the new European Commission to propose a Clean Industrial Deal as well as an electrification action plan. The Draghi report also hints in the right direction when it comes to achieving the energy transition, which, of course, comes with electrification.
In order to achieve those policy goals, the grids play a pivotal role. At the end of the last Commission, this was well recognised, and now we strongly believe that it is about taking action and implementing this. Delivering the energy transition while retaining our competitiveness will not be possible without appropriate digitalisation because otherwise, it will be too costly and too slow.
CS: As we prepare for the future, is your assessment that Europe’s grid is fit for where we’re heading?
SE: With the electrification of everything, the electricity demand is set to triple by 2050. For that, the grid capacity in many countries needs to double in anything between seven and 12 years. It took us 100 years to build the grid we have now.
We’d need to replicate that within 12 years – it’s impossible.
The solution is to apply software and digital means to reduce the need to increase the physical grid’s capacity by intelligently utilising the grid better than we do today.
CS: Can we apply such modern solutions to our ageing grid infrastructure?
SE: Digitalisation impacts how we plan and operate grids, from determining capacity and flexibility to adopting data-driven planning. It determines how granularly we plan. And that is absolutely something that can be implemented now.
When it comes to operating grids in a much better way, we look at operating down to the lowest voltage levels and knowing what’s happening in the distribution grid. So far, we’ve just been focused on the transmission grids.
The key to digitalisation is to create large harmonised markets across the EU. Fragmentation inhibits scale and becomes costly if you might have to develop something 27 times.
The same goes for the distribution system operators (DSOs). In Germany alone, there are more than 800. If each adopts its own digital approach, we’d need thousands of different types of software across Europe. You don’t need to create a monopoly, but you need interoperability, open platforms, and open standards.
CS: Can the digitalisation of our grids also help them cope with the energy transition?
SE: Absolutely. In Rome, for example, there is already a high integration of renewables. They’re deploying digital means to help with flexibility management in a very successful way, which has helped to stabilise grids under stress and to create more grid capacity.
Europe has a chance to be the leader in the field of grid digitalisation. We can create environments which enable stable and green energy for a decarbonised industry and do this at scale.
CS: What policies or initiatives would help companies like Siemens develop solutions fit for the EU’s member states?
SE: In all policies related to grids or electrification, we need to think of digitalisation as integral and not as an afterthought. That’s the only way to make grids stable and affordable.
A recent report by Eurelectric said that grid investments would need to increase to €67 billion per year from 2025. We can cap that need to €55 billion if we do digitalisation correctly.
For that, we need consistency in legislation across member states. One topic which we need to push is flexibility management. Flexibility management can support to contain grid infrastructure investments, quickly add more grid capacity, and keep the grid stable – even under stress from increased renewables.
CS: What steps do we need to take to achieve this?
SE: Flexibility management means that you not only adjust the supply but also the demand for electricity. At the moment, the regulation of how that is incentivised, which markets this is playing out in, and what role DSOs or retailers can play is unclear.
To have a consistent policy around how the markets are designed and what is permitted for DSOs is something that we would like to see accelerated. Consistency across member states unlocks the investment, both on the utility side and also on a technology vendor side, like at Siemens.
CS: Another pain point some countries face more than others is grid congestion. Can digital solutions help?
SE: Of course – 100%! Our Gridscale X software helps scale grid capacity fast. We look at how the electrons flow through the grid, how we plan the electrons to flow through the grid, which route they’re taking, and how we are steering the flow during the day so that those congestions are mitigated.
It’s also much cheaper to steer electrons in the right way and build grid capacity based on flexibility rather than to plan for the maximum usage at the maximum time like we do today.
CS: Similarly, what solutions could you offer on the energy storage front?
SE: We welcome the use of storage to help keep the grid stable. We absolutely factor those resources into our grid planning solutions. We optimally run grids with the help of batteries. Here is where policy needs to provide clarity on how batteries can help balance the grids and make energy consumption for Europe’s citizens more affordable.
CS: And lastly, if we further digitise our grid, could we become more vulnerable to cyber-attacks? How confident are you that companies like Siemens could protect Europe’s grid infrastructure?
SE: Obviously, cyber security in all that we do as Siemens is non-negotiable. It’s certainly front and centre of our minds.
It’s a matter of collaboration – we collaborate with our customers to provide an end-to-end cyber security approach, as well as our partners to understand what it takes to ensure an end-to-end cyber security perspective.
You constantly evolve, and you constantly watch. It’s a place where you need to stay that one step ahead.
This interview has been edited for clarity and brevity.
[ Edited by Brian Maguire | Euractiv’s Advocacy Lab ]