European Business Schools Librarian's Group

Working Papers,
Copenhagen Business School, Department of Economics

No 5-2024: Energy Sector Digitalisation, Green Transition and Regulatory Trade-offs

Manuel Llorca (), Golnoush Soroush, Emanuele Giovannetti (), Tooraj Jamasb () and Daniel Davi-Arderius ()
Additional contact information
Manuel Llorca: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark
Golnoush Soroush: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark
Emanuele Giovannetti: Faculty of Business and Law, Anglia Ruskin University, UK
Tooraj Jamasb: Department of Economics, Copenhagen Business School, Postal: Copenhagen Business School, Department of Economics, Porcelaenshaven 16 A. 1. floor, DK-2000 Frederiksberg, Denmark
Daniel Davi-Arderius: Càtedra de Sostenibilitat Energètica, Institut d'Economia de Barcelona, Universitat de Barcelona, Spain

Abstract: The green transition relies on electricity generation from intermittent renewable energy sources and the electrification of end-consumption such as heating, cooling, or mobility. At the same time, an increasing number of previously passive consumers are becoming active actors in the energy system, while the quantity of electric devices connected to the grid increases. These trends pose new operational, economic, and regulatory questions as the traditional roles of certain agents are mutating and multiplying. Digitalisation offers the possibility of implementing innovative solutions to the new challenges faced by grid operators, especially at the distribution grid level. In the EU Grid Action Plan, investments in grid digitalisation and real-time monitoring are deemed as crucial to achieve an efficient and fast energy transition. In this paper we present potential digital solutions to overcome the operational challenges posed by the ‘future-proof’ energy systems currently being devised and we address their economic implications. We also address some key aspects related to the digitalisation of the energy sector (efficiency and innovation, interoperability and standardisation, centralised vs decentralised solutions) from an economic perspective. Finally, a successful digitalisation of the sector requires adjustments in the regulatory frameworks. In the conclusion, we detail some recommendations needed for regulatory improvements.

Keywords: Energy transition; Digitalisation; Standardisation and interoperability; Economic principles; Innovation; Regulation

JEL-codes: L10; L50; L90; Q40

Language: English

29 pages, February 2, 2024

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