The Big Picture (Infographic): Power Sector Digitalization Use Cases

In a recent article in the journal Energy, experts from universities in Portugal, Switzerland, the U.S., and Romania identify digitalization as a pivotal phenomenon affecting the electricity sector, alongside other “megatrends” such as decarbonization, decentralization, and deregulation. Despite the increasing focus on the effects of digitalization on power systems, the authors highlight a notable gap: a lack of comprehensive analysis that examines digitalization phenomena, anticipated benefits, challenges, and policy options on a global scale. This shortfall may stem from the absence of universally accepted definitions within the power sector for digitization, digitalization, and digital transformation. For instance, digitalization has been interpreted from both data-centric and process-centric viewpoints.

To clarify, the authors define digitization as the conversion of analog to digital data, describing it as a relatively swift process that involves individual actors within the electricity sector and can be completed within months. Digitalization, however, is seen as the utilization of new data sources via digital technologies across all entities in an economic sector to enhance safety, efficiency, and productivity, necessitating structural changes over several years. Digital transformation, they explain, represents a comprehensive, cross-sectoral integration of all economic and social agents into a connected digital system, leveraging improved data exchange, analysis, and decision-making over years to decades, altering interactions among market participants.

The article posits that digitalizing power systems is a multifaceted endeavor involving a broad range of stakeholders, including international and governmental bodies, NGOs, civil representatives, power companies, utilities, industry associations, and digital firms specializing in software, hardware, and communications. The authors also differentiate between “primary digital technologies”—the backbone of most applications and business models in the sector, such as big data, artificial intelligence, the Internet of Things, and distributed ledger technology—and “secondary digital technologies,” which have fewer documented use cases or less consensus, including digital twins, robotics, 3D printing, augmented and virtual realities, and cloud computing. Source: Heymann, F., Milojevic, T., Covatariu, A., & Verma, P. (2023). Digitalization in decarbonizing electricity systems. Energy, 262(Part B), 125521. https://doi.org/10.1016/j.energy.2022.125521

—Sonal Patel is a POWER senior editor (@sonalcpatel, @POWERmagazine).