Power grids are the blood vessels of modern civilisation. Most of the systems we use in our daily lives depend in one way or another on electricity reaching them, and any failure, such as the one we experienced on the Iberian peninsula on 28 April 2025, is a sign of how vital this constant supply is to civilisation. In a large number of homes, without electricity there is no hot water, no cooking, no heating, no communication with loved ones, so it is necessary to ensure that such situations do not happen again.
The system is therefore undergoing a transition to a more resilient, efficient and sustainable future, which is one of the greatest challenges and opportunities of the century. This transition requires the correct implementation of redundant and intelligent systems, where artificial intelligence, chemical storage and cybersecurity work together to become the pillars of a modern electrical architecture.
INSIDE. From simple infrastructure to smart energy
The first power plants operated with direct current, so they had to be located in areas very close to the supply. In other words, the generators were located in nearby buildings or directly inside factories or places where electricity was needed. This fact greatly limited the electricity supply, since, to generate electricity, turbines were needed to spin turbines that could turn coils within a magnetic field. Rivers were needed to drive the turbines or the constant burning of coal was required to exploit the principles of the steam engine.
In Spain, the first documented use of electricity for lighting was the work of the then professor of general chemistry at the University of Santiago, Antonio Casares, in April 1951.[i]. The professor installed in the cloister of the University a two-bar graphite arc powered by 50 batteries. At nightfall, Casares connected the apparatus which illuminated, to the admiration of the public and the press of the time, the courtyard and the church tower of the University.
He repeated the experiment on 24 July 1852, before the feast of St. James, on one of the façades of the cathedral after gathering a large part of the population. Such was the astonishment of the audience that, according to the book The magic spark of Armando Cotarelo, one of the university librarians exclaimed: “A noite está varrida da terra”.” (night is swept from the earth). After him, several chemists and pharmacists used similar systems to illuminate their businesses. And, little by little, electricity gradually made its presence felt in various factories. Later, in 1875, the first commercial power station was inaugurated in Barcelona. This power station was built to supply electricity to the motor company The Inland and Maritime Engineer which, in turn, became the first customer of a power plant in Spain.
It would not be until 1881 that the first public lighting would be seen in operation in Comillas, Cantabria.[ii]. There, the Marquis Antonio López y López, a businessman who had made his fortune in the United States, wanted to illuminate the visit of Alfonso XII and his wife María Cristina with electric lanterns. And five years later, the first permanent public lighting was installed in Girona. That same year, at the Chicago World's Fair, Nikola Tesla demonstrated the superiority of alternating current when it came to transporting electricity.
It did not take long for the breakthrough to materialise in Spain. The first time electricity was transported over long distances was in Zaragoza in 1893.[iii]. The line ran for three kilometres from the place where the hydraulic energy was produced: the San Carlos Mill, to the city centre. The most powerful hydraulic generator in Spain at the time was installed for this engineering work. In this way, it was demonstrated that it was possible to move electricity production away from the towns and villages and away from the smoke derived from the burning of fuels, or to build hydroelectric dams in the most suitable places in terms of orography, not location. Thus, in 1909, the first large power line was built between the Molinar waterfall on the river Júcar and Madrid, a distance of 240 km at a voltage of 60,000 volts.
Following these advances, Spain became increasingly electrified and modernised. Night, in effect, was swept away little by little, as the wiring reached every town on the peninsula. More dams were built; gas, coal and oil power stations; nuclear energy arrived in the 1980s and, since then, what currently generates most of our country's electricity has come onto the scene: wind and photovoltaic renewable energies. The electricity generated has been distributed to every corner of Spain by means of a network of cables that has also been part of the modernisation process. The landscape has been filled with power lines, and underwater cables lie at the bottom of the sea, connecting us to the islands and to Morocco. Graph 1 shows the main components of the electricity networks.
Security systems have also been put in place to absorb the volatility of renewable sources and the proliferation of increasingly decentralised electricity generation. These new smart grids are called “Smart grids” and, thanks to the integration of digital technology, allow constant, two-way communication between electricity production sites and consumers. In this way, electricity flows can be distributed more efficiently and surpluses can be allocated to storage systems to ensure production in less favourable situations.
As stated by the European Commission, climate neutrality is expected to be achieved by 2050. However, an estimated 40% of European electricity grids are 40 years old or older and do not have the flexibility to respond to the increased demands of electrification and the integration of renewable electricity sources. Grid modernisation is therefore necessary to achieve full decentralisation of electricity production.[iv]. This modernisation has to overcome certain techno-economic constraints and challenges, such as the effect of voltage increase, economic losses due to constraints to cope with grid congestion and the large investments needed to ensure an efficient green energy transition.[v].
One of the keys to this transition is the standardisation of protocols and systems. For this reason, the European Union issued smart meter standardisation mandates M/441 in 2009 and mandate M/490 for smart grids in 2011. Since then, different expert groups have continued to contribute to the development of new standards and update existing ones. Among the successes of this initiative is SAREF (Smart Appliances Reference)[vi], is a common language created in 2015 for the standardisation of the Internet of Things (IoT). This system, which began to be implemented in 2017, has enabled a large number of electrical devices connected to the grid to communicate with each other, creating smart ecosystems.
Subsequently, SAREF has continued to evolve to become the backbone for different sectors, including energy, to pave the way for an interoperable IoT. Another success is the first Implementing Regulation (EU) 2023/1162 on interoperability rules for access to metering and consumption data, created in June 2023, which ensures a common language for all electricity operators. In addition, work is currently underway on an implementing act to maintain energy balance depending on production and demand.
However, one of the technologies that could revolutionise the energy sector is undoubtedly the implementation of artificial intelligence (AI). According to the European Commission, it can transform the continent's energy infrastructure, although such a transformation must take into account data protection, potential errors and cybersecurity risks.
AI can play a particularly important role in grid optimisation. Well-trained AI can help predict electricity production and consumption patterns and, above all, minimise the impact of variability in electricity generation from renewables. However, this implementation will only be possible if, in turn, sufficient sensors or smart meters are installed that can obtain real-time data from the grid. In this way, it will be possible to detect voltage drops or surges due to inclement weather or cyber-attacks.
The use of AI is not limited to its implementation in the grids themselves. AI is already being used by energy companies E.ON and Italy's Enel to monitor the physical state of their grids. Using data from satellite observation systems, the Frankfurt-based company monitors the weather, fires and landslides that could endanger the power lines. It is thus able to redirect the flow to other locations and guarantee supply at all times. It also expects to use this computational power to respond to other potential threats and to ensure that the power grid remains stable at all times.
However, all these AI solutions come with an associated cost that needs to be assessed. It is expected that the proliferation of data centres enabling the establishment of AI models could have a strong impact on electricity consumption. With the EU planning to triple its data processing capacity in the next 5-7 years, the International Energy Agency estimates that carbon emissions from data centre power consumption will reach 320 megatonnes by 2030. [vii]. However, a report by the Boston Consulting Group of 2023[viii] indicates that the application of AI could help avoid 5 to 10% of global greenhouse gas emissions by the same year. The same conclusions were reached by a 2025 study by the London School of Economics and Political Science.[ix].
A roadmap on digitisation and AI in data centres for 2026 is therefore being developed. It will include measures to facilitate the sustainable integration of data centres into the energy system and address other issues related to the large-scale deployment of data centres in the EU, such as grid optimisation, energy efficiency and demand flexibility.
Among all the measures, new proposals for the chemical storage of electricity will also be assessed to act as a buffer in the event that renewables cannot guarantee supply. These proposals include green methanol, the production of which aids decarbonisation and its versatility means it can be used in internal combustion engines, to power fuel cells, or as a raw material for industry.
Green methanol was covered in depth in chapter 9 of the INTEC2024 report, where it was explained in detail from its production to its possibilities.[x]. Focusing specifically on its role in the future of the electricity grid, green methanol can be a decisive factor in the complete decarbonisation envisaged by the EU by 2050.
Going into detail about its structure, methanol or methyl alcohol (CH₃OH) is the alcohol with the simplest molecular structure. It is liquid at room temperature and highly flammable, which is why it is also known as “burning alcohol”. In industry, methanol is used as a solvent, antifreeze or as a precursor for other basic chemicals.
But this chemical compound is dubbed “green” when it is produced using only renewable and non-polluting methods. It is usually classified into two types: biomethanol if it is generated from sustainable biomass sources, such as livestock products or forestry waste; or e-methanol if it is produced from green hydrogen (itself produced by renewable methods) and captured carbon dioxide. The end result of both methods is the same: methanol. The only variation is the method of production.
E-methanol is of particular interest to the electricity industry, as its production requires hydrogen gas and CO₂. To obtain hydrogen gas, excess electricity production can be used to separate water (H₂O) into oxygen and hydrogen.[xi]. Once the hydrogen is obtained, it can be mixed with CO₂ captured from other industries such as cement plants, steel mills or fossil fuel burning power stations to create methanol. In this way, the gas that was to be released into the atmosphere is put to a new use. Although it is true that, if this methanol is used as a fuel, the CO₂ ends up in the atmosphere just the same, but with several important advantages. First, the carbon that would otherwise have been expelled is put to a new use, with twice the yield. In addition, it can be used as a substitute for fossil fuels with minimal modifications and, finally, it does not produce other polluting gases such as nitrogen or sulphur oxides. It is therefore an interesting and scalable option, as the development of the technology shows.
The first plant to generate green methanol in this way opened in Iceland in 2012, generating around 4,000 tonnes of methanol. This is miniscule compared to a fossil fuel methanol plant, which can produce millions of tonnes a year. But progress is slowly being made and new plants can now create hundreds of thousands of tonnes. A clear example is Europe's largest green methanol plant, capable of producing 300,000 tonnes of the fuel. The project, to be developed by Cepsa and C2X in Huelva, is scheduled to start operating in 2028. There are other projects underway in other communities, both for the generation of e-methanol and biomethanol.
In December 2015, the Ukrainian electricity grid suffered a cyber-attack that caused 100,000 people to lose power for 10 hours. Analysis of the attack showed that hackers had managed to take control of the human-machine interface at three power plants by exploiting a loophole in vulnerable software. Once inside, the hackers took control of the various computer systems in the plants and blocked any other user from using them. To restore the systems, the computer scientists had to shut down the various computer systems and start them up manually. Once they succeeded, the power came back on quickly.[xii]
With more computerised systems, and with greater network decentralisation, such attacks pose a greater risk, as “manually rebooting systems” can be much more complex. For this reason, several universities together with energy distribution companies are developing new standards and technologies to prevent vulnerabilities. They are all based on 5 principles: Identify vulnerabilities, protect critical systems, detect attacks, respond to attacks and recover power as quickly as possible.[xiii]
However, close and transparent collaboration between governments, utilities and cybersecurity specialists is essential for successful measures. In this way, preventive measures can be implemented to mitigate these risks and maintain the reliability and security of electricity systems.
But cybersecurity is not the only risk. On 28 April 2025 there was a major blackout on the Iberian Peninsula that left a large part of Spain and Portugal without electricity. In this particular case, the power blackout was not related to a cyberattack, but was a phenomenon of cascading power surges that could not be dampened. According to the report presented by the government, the first surges caused the disconnection of the generating plants and, in turn, a drop in frequency occurred, which aggravated the problem, disconnecting the rest of the generators by underfrequency. The whole process took only 5 seconds. As the Committee for the analysis of the circumstances of the electricity crisis of 28 April 2025 points out[xiv], Although this situation was not due to a lack of firmness or capacity, the zero electricity showed the importance of tools linked to security of supply. It was therefore proposed to minimise the bureaucratic hurdles to their implementation.
In addition, Red Eléctrica produced its own report in which it indicated 15 recommendations to prevent a recurrence of the improbable combination of circumstances that shut down the peninsula. These include dynamic voltage controls, mechanisms to reduce fluctuations in electricity flow and greater control and observation.[xv].
2025 marks the 150th anniversary of electric power generation. This invention, which began a few years ago as a curiosity to amaze the public, has become a fundamental pillar of modern society. But our dependence on electricity is also a vulnerability that needs to be addressed before it becomes a problem. Keeping the grid up to date and in tune with the times is therefore one of the main challenges of the 21st century.
In order to achieve the decarbonisation goals proposed in recent decades, as shown in Graph 2, artificial intelligence can be of great help in optimising electricity grids. However, its implementation has to be done with great care and taking into account that the databases required for its operation can also consume valuable resources. On the other hand, in order to achieve a resilient and secure grid, the implementation of buffer energies, such as chemical storage of electricity in the form of green methanol, and the updating of security protocols, will be key players for the future of the electricity grid. This grid, which is expected to be decentralised and variable in production, will undoubtedly be a sign of a shift towards a more sustainable world.
As a bridge between the historical context and the current situation, grid modernisation should be seen as part of a broader process of digitisation, decarbonisation and integration of distributed resources.
IN ACTION. The new electricity grid that a ‘net zero’ planet needs’
The transition to a world with zero net emissions must be supported by larger, more robust and smarter electricity grids, as global electricity consumption is expected to grow 20% faster in the next decade than in the previous decade.[xvi]. A modelling analysis conducted by MIT identifies cost-effective pathways for decarbonising electricity systems and argues that emissions can be reduced by 97% to 99% from 2005 levels in the United States without compromising grid reliability.[xvii]. As a result, global electricity demand is projected to grow from just under 25,000 TWh in 2021 to almost 54,000 TWh in 2050. The European Union (EU) estimates that electricity consumption on the continent will increase by approximately 60% and cross-border transmission capacity will double by 2030.
According to the International Energy Agency, this will involve adding or renewing more than 80 million kilometres of grids by 2040, the equivalent of the entire existing global infrastructure, and doubling the pace of investment in electricity grids, which should exceed $600 billion per year, with an emphasis on digitisation and modernisation of distribution networks. The EU has raised the annual spending estimate until 2030 to 65-100 billion euros.[xviii], Germany, for example, will need to invest more than three times as much as France in its distribution network by 2050.
To meet the above increase in demand, moving away from the legacy model and meeting the energy transition targets, will require even more investment of approximately one trillion euros per year until 2050.[xix], 2.5 trillion by 2035 alone, according to McKinsey estimates.[xx]. Technological innovation has forced a revision of much planning in this regard. For example, it was long thought that existing management mechanisms could only handle renewable generation up to 20% penetration levels.[xxi], The consensus today is that wind and solar PV should account for more than 80% of the total increase in energy capacity in the next two decades, compared to less than 40% in the last two decades. A net zero emissions scenario in 2050 calls for this share to be even higher, at 90%.
For the effects of this investment to be felt, new transmission corridors are needed to connect the solar PV projects to be built in the desert and future offshore wind turbines, both of which are located far from demand centres such as cities and industrial areas. System flexibility will also need to be doubled by 2030 to ensure that this does not affect the stability of supply. The bill for the aggiornamento emissions from grids, if it is to be done by integrating more renewable energy, it will necessarily be higher.
The pace of implementation of new investments and penetration of green technologies is, however, lagging behind all these projections. The current market reality is far from these targets. At least 3,000 gigawatts (GW) of renewable energy projects, of which 1,500 GW are in advanced stages, were expected to be connected to grids by the end of 2023, becoming a bottleneck for the transition to a net zero emission world. Investment in zero-emission generation has grown rapidly, almost doubling in fact the installed capacity in 2010, but global spending on grids has barely changed and remains stable at around $300 billion per year. At times of energy crisis such as those experienced in the aftermath of the Ukraine invasion, this sluggishness has accentuated many countries' dependence on natural gas, whose global imports could increase by 80 billion cubic metres (bcm) per year from 2030 if investment lags persist; as could coal imports, which could be almost 50 million tonnes higher than today.
What is striking is that technologies aimed at improving the grid are not always included in the energy planning process of national regulatory authorities, despite the fact that their integration into the system can potentially increase total grid capacity by between 20% and 40%. Without improvements, the risk of outages rises - already costing around $100 billion per year, 0.1% of global GDP - and grid congestion problems grow. In Germany, congestion costs reached EUR 4 billion per year by 2022, and in the United States they rose from USD 6 billion to almost USD 21 billion in three years.
Although at a slower rate than desirable, over the last five decades, the world's electricity grid has experienced continuous growth, which can be estimated at approximately one million kilometres per year. Most of this expansion has taken place in the distribution networks (connecting to end-users: households, industries, facilities, etc.) and they represent approximately 93% of the total length of the electricity system, compared to 7% for transmission lines (connecting power generation points to distribution networks close to users). Digitisation has become increasingly important, accounting for about 20% of investment by 2022. The IEA estimates that spending on smart grids would need to more than double by 2030 to align with the Net Zero Emissions Scenario in 2050.[xxii], especially in emerging and developing economies (EMDEs).
With a length of more than one million kilometres, the EU's electricity infrastructure is the largest and most integrated in the world, but 40% of its distribution networks are more than 40 years old. The EU Action Plan ‘Digitisation of the Energy System’.’[xxiii] The Commission foresees that, of the approximately EUR 584 billion of investments in the European electricity grid until 2030, EUR 170 billion will be spent on digitisation. This includes smart meters, automated grid management, digital metering technologies and improved field operations.
The delays experienced by more than a quarter of Europe's electricity projects of common interest (PCIs) for grid expansion and upgrades are not only, or even primarily, the fault of the operators. New infrastructure typically takes between five and 15 years to implement due to permitting problems, often involving multiple authorities and jurisdictions along the entire route. This is five times longer than new renewable energy projects and up to seven times longer than new electric vehicle charging infrastructure.
The construction of the 340 km long Ultranet direct current line in Germany is estimated to require around 13,500 permits. The European Network of Transmission System Operators for Electricity (ENTSOe) produces a non-binding ten-year grid development plan every two years, a timeframe considered by the European Agency for the Cooperation of Energy Regulators (ACER) to be excessive, as it leads to analyses based on outdated data. In such circumstances, the task of unravelling the Gordian knot of bureaucracy is complicated.
Fragmentation of actors is another key constraint for the modernisation of the European electricity grid. Just over two thirds of new investments must be made in the distribution network, where operators must provide the equipment, including smart meters and local storage systems. There are 30 transmission system operators (TTOs) in the EU, with Germany having four and Austria two, but thousands of distribution system operators (DSOs). The networks operated by the latter account for most of the infrastructure, which is reflected in the value of the assets and makes integration dynamics more difficult. For example, the network operated by the largest French DSO, ENEDIS, is worth EUR 54 billion, while the asset base of the country's largest STO, RTE, is EUR 17 billion.[xxiv].
The European Commission is promoting, without much success so far, initiatives to foster collaboration. It is promoting the creation of a digital twin of the European electricity grid.[xxv] through the TwinEU (Digital Twin for Europe) project, which promotes the federation of local twins of the electricity system. Likewise, the Trans-European Energy Networks (TEN-E) policy[xxvi] encourages regional cooperation across 11 priority geographical corridors, including electricity, and in three thematic priority areas, including smart grids. Interconnectivity is key to ensuring energy security and reliability: integrating European electricity markets could bring an estimated benefit of up to €34 billion per year.[xxvii] to citizens.
The European reaction is part of a global speed change linked not only to the climate challenge, but also to the competitiveness of economies. China has modernised and expanded its electricity grids with investments worth $442 billion over the period 2021-2025. China Southern Power Grid planned to contribute $99 billion, in addition to contributions from some regional companies.
The Grid Resilience Innovative Partnership Programme (GRIP)[xxviii] The US government's plan envisaged USD 10.5 billion in aid lines to support grid modernisation and expansion, split into USD 2.5 billion for grid resilience, USD 3 billion for smart grids and USD 5 billion for grid innovation. The World Bank[xxix], together with the Multilateral Investment Guarantee Agency (MIGA), the International Finance Corporation (IFC) and other development agencies, announced an initiative to promote private investment in distributed renewable energy (DER) systems to electrify specific areas in Africa quickly and efficiently.
Digital technologies have become central to any modernisation strategy. They open the door to more efficient management and make the direction of energy flows more predictable in a world where an increasing number of distributed resources will coexist, from electric vehicles to renewable energy plants and electric heat pumps. Digital transformation enables a data-driven strategy that facilitates the balancing of supply and demand, the exchange of information between STOs and DSOs, the optimisation of energy distribution and the prediction of consumption trends.[xxx]. The slow pace of digitisation of distribution networks is in fact already limiting the availability of real-time data, and this slows down the whole modernisation process, as it is precisely this real-time data that reduces the cost of upgrading the existing network infrastructure.[xxxi].
The internet of things is one of the great levers of digital transformation of energy grids, through devices such as residential smart meters. Innovations in integrated circuits, edge information processing (edge) and AI, such as those incorporated in second-generation smart meters, can help reduce stress on communication networks, improve real-time responses to network fluctuations, and enhance data security and privacy.
Deployment has progressed in recent years, even reaching 100% in some economies, such as China, but still remains very low in many countries. By the end of 2023, 1.06 billion smart meters for electricity, water and gas have been installed worldwide.[xxxii], with a global average penetration of 43%. North American countries have the most mature electricity smart meter market, with a penetration of almost 77%, and some East Asian nations also have high rates. In the EU, fifteen countries, including Spain, have a smart meter deployment rate of more than 80%.[xxxiii], Germany, with just over 50 million points, has one of the lowest adoption rates, at less than 10%. Its government has taken steps to accelerate implementations and expects to reach full deployment by 2032.
The installed base of these devices is expected to exceed 1.75 billion units by 2030 with a compound annual growth rate (CAGR) of 6%. For Europe alone, investment in smart metering systems could reach €47 billion by 2030. If 266 million devices are installed, the penetration rate would rise to 92%. The Commission estimates that they offer electricity savings of €270,000 per metering point, distributed between consumers, suppliers and operators.
In order to maximise the metering potential offered by smart meters, the European Commission[xxxiv] decided to improve access to them by introducing interoperability and non-discriminatory access requirements. These measures, coupled with the Data Act, which entered into force in September 2025, empower consumers to actively participate in the energy transition and enable energy suppliers to develop new services.
As a supporting infrastructure, the European Common Energy Data Space is included in the Digital Europe Programme[xxxv]. Europe also promotes a code of conduct[xxxvi] for energy smart appliances to enable interoperability and boost their participation in demand response schemes. It was presented at the continent's largest industrial trade fair, the Hannover Messe, with the commitment of ten manufacturers and one energy management systems company.
Artificial intelligence (AI) will play an increasingly critical role in integrating renewable energy, stabilising energy grids and reducing the financial risks associated with infrastructure instability.[xxxvii]. Their proliferation has allowed the introduction of forecasting models that go beyond traditional usage patterns.[xxxviii]. The advent of the smart grid (SG) marks a paradigm shift in electricity supply.[xxxix]. It integrates modern telecommunications and sensor technologies and enables optimised power supply strategies. Unlike the traditional one-way grid, it introduces a two-way framework that facilitates the two-way flow of information and electricity. The Department of Energy (DOE) claims that if modern electricity grids were 5% more efficient than they are today, the energy savings would be equal to the effect of eliminating emissions from 53 million cars.
Management will become seamless thanks to AI. Green Empowerment's SGs for Small Grids Project[xl] seeks to bring open source smart technology to engineers and technicians in remote communities. Works with regional partners to build renewable energy microgrids with indigenous communities in South Asia.. On the other side of the globe, under a flexibility contract with Dutch grid operator Liander, food company PepsiCo will buy power for its Chips factory in Broek op Langedijk only when there is sufficient supply and transmission capacity available on the grid.[xli].
The reconfiguration of these mechanisms will overcome operational problems in addition to those mentioned above. For example, high grid transformation costs are one of the main barriers to the deployment of energy storage systems, designed to store excess output from renewable generation sources during off-peak hours and release it during peak hours. Companies such as Finland's Wärtsilä have designed grid-forming battery systems (grid forming) that enable distributed energy storage and flexible power generation. Wärtsilä has created a hybrid solution on the Portuguese island of Graciosa in grid forming which integrates wind, solar, storage and thermal generation and announced a similar project in Shetland Islands (Scotland) in mid-2025.[xlii]. Their model allows distinct geographic areas to be integrated into a larger energy system, so that they can be easily disconnected from it to ensure grid balance and resilience. According to this vision, these geographical areas connectable y disconnectable can be islands, streets, neighbourhoods or self-sufficient cities.
Historically, technological precariousness has made low-voltage lines, located in the last-mile distribution network, the blind spot of electricity networks.[xliii]. It did not make sense to equip lines serving few customers and with a low volume of energy in transit with sensors. However, with distributed PV generation and new demand paradigms, including electric vehicle charging, heat pumps and general electrification, 90% of European grid operators plan to modernise low-voltage grids.[xliv]. This will accentuate the convergence of interests between the transmission and distribution areas.
One of the technological fields of interest in this respect is the operator's control room AI self-healing modules, which can analyse the state of the grid and find new routes for transporting and redistributing electricity. In the event of a power outage, it is now possible to reconnect the automation of approximately 99% of the affected customers in less than two minutes. If the problem is network congestion, dynamic line rating (DLR) algorithms indicate whether it is possible to operate a line above its rated capacity, even above 110%.
With regard to power transmission lines, the main areas of technological innovation address the digitisation of equipment such as power transformers, substation automation and the development of flexible alternating current transmission systems (FACTS), as well as advanced sensors such as metering units to streamline operations. The digitisation of substations is central to the ongoing transformation of energy systems. In this context, the IEC 61850 standard has established itself as the global reference for next-generation data exchange.[xlv].
Alongside this, large-scale interconnections remain a major focus for investment and innovation, with projects underway in Europe, China, North America, India and Australia. Their main value lies in helping to balance supply and demand between regions by providing access to remote energy resources. In the EU, the REPowerEU scheme[xlvi] includes the development of interconnectors and the huge 455 GW wind-solar complex that will be operational by 2030 in China, includes the construction of high voltage direct current (HVDC) and ultra-high voltage DC (UHVDC) infrastructure.
Electricity transmission systems are considered critical national infrastructures. For the US Department of Energy, the reliable supply of electricity is a key issue for the economy, national security and even health.[xlvii] and the EU's Net-Zero Industry Act (NZIA) designates network technologies as strategic. For this reason, cyber-attacks are increasingly perceived as a threat to their integrity. The UK's 2023 National Risk Register puts the probability of a cyber attack on critical infrastructure at between 5% and 25%, with a potential impact of hundreds of millions of pounds in losses.
In recent years, the number of cyber incidents has increased along with the advance of digitalisation. There have been numerous cases of cyber-attacks on key infrastructures causing significant social disruption around the world. The first EU network code on cyber security for the electricity sector[xlviii],was published in May 2024 and establishes sector-specific rules for the cybersecurity of cross-border electricity flows, including common minimum requirements, planning, monitoring, reporting and crisis management.
The electricity infrastructure is very special, it needs very precise and very fast control. For this reason, transmission systems are managed at 50 or 60 Hz, so that load can be instantly balanced over very large regions, matching demand to production.[xlix]. The current process of grid interconnection involves the addition of many, many new energy devices at various points in the grid, both transmission and distribution. All of them can become potential access points for hackers to the electricity system, because the whole process is controlled by software and communication.
Electrical substations are very sophisticated systems, where some of the control and information has been migrated to the cloud, but some processes are kept completely closed and even isolated, without internet connection. Part of the current innovation seeks to prevent the attack from occurring at the time of the software update of these closed spaces by the technology provider. Georgia Tech researchers have put the defence barrier, for example, on the hardware side and designed chains of logical (physical) gates in the silicon itself, which are inserted when the computer chip to be inserted into the electrical substation is manufactured. In this way, they have ensured that each chip generates a unique 128-bit bit sequence, which is impossible to hack via software.[l].
Like other parts of the economy, dependence on third countries in the supply chain means that, in times of turbulence, grid project developers in Europe have had to face long lead times for procuring specific components or rising raw material prices. The global copper shortage expected this decade could lead to a sudden increase in prices in the midst of the call for a doubling of the number of transformers.
This is another factor that could turn the digital transformation of electricity grids into an inflationary factor, which could have an impact on consumers' bills. By the end of 2024, retail electricity prices for industry in the EU were more than twice as high as in the US and twice as high as in China. At the retail level more than 10% of Europeans are affected by energy poverty.
In this context, careful design of network tariffs is needed to encourage the use of smart grids and incentivise consumers to optimise the use of existing network capacity through time and location indicators. Grid costs can be a substantial part of consumers' final bills: in 2023, grid costs accounted for 25% of average electricity costs for EU households, according to Eurostat.
ACER suggests a planning process based on the identification of system needs and scenarios that harmonise the digital transformation of the electricity grid with other major strategic initiatives such as the expansion of the hydrogen grid, storage capacity, charging infrastructure for electric vehicles and CO2 capture. Increased cross-border electricity trade could also favour the convergence of electricity prices in EU countries, leading to a reduction in average prices and volatility.[li].
Securing the financing of investments will be key to the success of the grid modernisation process. The main EU fund for energy infrastructure is the Connecting Europe-Energy Facility (CEF-E). Equity financing formulas, such as those already used for transport infrastructure, are also being explored. In this respect, the fragmentation of the European capital market remains a limiting factor and could encourage major network operators to raise capital in the US and China.
Ultimately, it will be essential to develop a talent pipeline, ensure the integration of digital skills into power sector curricula and manage the impact of the energy transition and increased automation on the workforce through skills and hands-on training. European energy industry actors and the Commission have launched a Large-Scale Partnership (LSP).[lii] to boost talent development in the sector, following the warning of a potential shortage of skilled professionals in the 2023 Competitiveness Progress Report on clean energy technologies.[liii].
IN SPAIN. An ecosystem of ‘electric’ startups to reinvent the grids
The dynamism of technology-based entrepreneurship is one of the characteristic features of Spain in the field of new electricity grids. Some examples of emerging companies give an idea of the boost the sector is receiving. The startup Splight specialises in optimising grids with artificial intelligence (AI) to democratise access to energy. Its Dynamic Congestion Management (DCM) technology helps energy companies leverage existing infrastructure to meet the dual challenge of avoiding congestion and facilitating the connection of renewable energy, acting as a solution to improve grid flexibility. Splight's AI is a bid to maximise the capacity of existing infrastructure, so that quality of service is not dependent on the construction of new transmission lines. The start-up raised €12 million in a round in which Elewit and Draper B1 participated, as well as international investors such as NOA, Fen Ventures, Ascent Energy Ventures and UC Berkeley Foundation, among others.
Academia is also a source of entrepreneurship in the sector. ENFASYS is a spin-off of the University of Oviedo that takes advantage of the research carried out by the LEMUR group both in hardware and in the development of software libraries and applications aimed at the control and monitoring of electricity grids. One of its projects has consisted of the development of a complete system for the rapid prototyping of control systems in microgrids and electricity distribution networks. The resulting platform enables the integration of renewable energies and battery energy storage systems into the grid. Once incorporated, it facilitates the evaluation of energy and economic optimisation concepts through simulation.
Another spin-off, Plexigrid, also from the University of Oviedo, since its creation in 2020, packages software that helps electricity distributors to save time, optimise and improve supervision and operations in low management, planning and analysis of the grid, flexibility management and management of distributed energy resources, through an aggregated data platform. Plexigrid has raised 6.5 million euros from TheVentureCity, Polar Structure and Vargas Holding. Finally, eRoots, which emerged from the UPC, improves the resilience of electricity grids with a focus on the integration of renewable energies. To this end, it has developed software with computational and grid analysis tools, and offers consultancy and R&D services.
Complementary to Plexigrid's value proposition is that of Adaion, which has developed a platform for digitising the electricity grid with the aim of facilitating planning, interoperability and maintenance for distributors through data analysis, the creation of digital twins and AI application. Born in 2023, Adaion is the first product of Turning Tables, which has been operating since 2016 and has raised €2.3 million through IPW and Fondo Bolsa Social.
In the case of Bamboo Energy, spin-off IREC and established in 2020, its solution enables aggregators and independent retailers to efficiently manage distributed flexibility resources. It has created a flexibility management and data analysis platform with a modular architecture and applied AI, with investors including IDAE and EIT InnoEnergy. Also from Barcelona is the startup Bia, whose capital is backed by Bridgestone, Wayra, Rockstart and EIT InnoEnergy. It uses AI to enable companies to charge their electric vehicles in the most efficient way and for distributors and retailers to improve networks in terms of sustainability, data analysis and prediction. Finally, another Spanish technology-based company involved in improving energy grids is Ingelectus. It has the InPWR suite of applications, designed to optimise the operation and guarantee the stability of renewable plants. For its part, the startup Silbat harnesses the high latent heat of silicon to achieve not only energy density, but also cost reduction, and allow renewable energy plants to operate 24 hours a day in a cost-effective manner.
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