EUROPEAN COMMISSION Strasbourg, 18.10.2022 SWD(2022) 341 final COMMISSION STAFF WORKING DOCUMENT Accompanying the document COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS Digitalising the energy system - EU action plan {COM(2022) 552 final}



Contents 1. Digital and green transformation of the energy system 1.1 Digitalisation in the energy system 1.2 Towards a decentralised, decarbonised and flexible energy system 1.3 The benefits for citizens and consumers 1.4 Enabling cooperation and collective action 1.5 Cooperation to share knowledge 2 Developing an EU framework for sharing data to support innovative energy services 2.1 Context 2.2 Evidence, projects and best practice 2.3 Key actions 3 Details on actions to promote investments in a smart electricity grid 3.1 Support the development of a Digital Twin of the EU Electricity Grid 3.2 Support the definition of common smart grid indicators 4 Details on actions to empower consumers 4.1 Digital tools for energy communities and other collective action initiatives

4.2 Peer-to-peer trading 4.3 Support upskilling and reskilling of the workforce for the digitalisation of the energy value chain 4.4 Dedicated structures supporting upskilling and reskilling for digitalisation of energy value chain 5 Cybersecurity and resilience 5.1 Context 5.2 Evidence, projects and best practices 6 Energy consumption of the ICT sector 6.1 Context 6.2 Key actions 7 Annex: Summary of the sample of projects co-funded by Horizon 2020 programme with cybersecurity components 1.Digital and green transformation of the energy system 1.1Digitalisation in the energy system Digitalisation is developing at an exponential rate, internet traffic has tripled in only the past 5 years and around 90% of the data in the world today were only created in the last 2 years. The increase ICT sector’s use of energy also follows this trend – it currently accounts for approximately 7% of global electricity consumption and this is forecast to rise to 13% by 2030. Digitalisation is not new to the energy sector, however: the energy sector was one of the early adopters of digitalised solutions, many of which have already been in service for decades. The early developments took place mainly in a few areas of the value chains (e.g. large power plants or electricity transmission networks), while the more recent ones span across the whole spectrum. Since the 1970s, digital pioneers have been using emerging technologies to facilitate grid management and operations and or to improve decision making for exploration and production assets. The planning and operation of wind and photovoltaic (PV) installations uses geo-information systems and advanced weather models. Sensors help to maintain power plants. Modelling tools optimise the planning of wind farms or predict the re-charging needs of the growing number of electric cars. The digital transformation is accelerating, widening and deepening. More computing power, improved connectivity, as well as better sensors and algorithms. Main characteristics of digitalisation Apart from the move away from analogue solutions, access to ever more information and the rapid rate of innovation in computer and communication tools, the main characteristics of digitalisation are as follows.



Source: Hafner, Manfred / Luciani, (2022), The Palgrave Handbook of International Energy Economics Cham, Switzerland The decentralisation of energy generation and millions of connected smart appliances, heat pumps and electric cars transform the last meters in the distribution grids into the first, and operators have to invest in monitoring and control capabilities. Improving the performance of wind turbines depends on digital technologies, for example by equipping wind blades with sensors to gather more precise data on their performance and improve (predictive) maintenance that will reduce outage times. Building detailed digital models of energy assets based on detailed sensoring and large data-sets to model performance under various circumstances, also known as digital twins, can improve performance of these energy assets or reduce the costs of research and experiments through virtualisation. High-Performance Computing is already contributing to the energy transition, for example by improving wind plant performance, by improving the understanding of the physics of solid-state batteries, or by better hydrological modelling that is key in reservoir management for hydropower production.

Smart Computer for the Energy Transition In Northern Germany large quantities of wind power are fed in to the grid: at peak times, this is often more than can be transported via power lines to the south and west of the country, where many large consumers are located. German TSO TenneT and experts from the Jülich Supercomputing Centre (JSC) have developed a special computer system that enables to perform numerous calculations in parallel for the optimal adaptation of the grid and design of new lines: with this system computer simulations of the power flows were accelerated more than 30 times. Source: Smart Computer for the Energy Transition (fz-juelich.de), press release 31 July 2018:

https://www.fz-juelich.de/en/news/archive/press-release/2018/2018-07-31-tennet In the upcoming years, the digitalisation process will evolve into service-oriented architectures and moving beyond today’s cloud computing ecosystems. Artificial intelligence can help to optimise the management and operation of the energy grids or to optimise the room temperature in smart buildings. With the rise of the platform economy and personal data becoming a valuable commodity, new opportunities and challenges for the governance appear. Uncertainties, if connected appliances that offer more comfort might also open the door to espionage and cyber-crime, could hinder the digital transformation if left unchecked. Also, the increasing energy consumption of the IT sector – improvements in energy efficiency are outrun by the increase in use of IT – poses a challenge to policy makers. 1.2Towards a decentralised, decarbonised and flexible energy system To meet the Green Deal objectives in the most cost-efficient way requires an energy system that is much smarter and more interactive than it is today. Increased grids’ observability and controllability, improved forecasting of energy production from distributed energy resources, and seamless integration across different operators in actively managing their systems are all examples of new needs and challenges that require innovative digital solutions. Decarbonisation, electrification and decentralisation of the energy system require digitalisation to make it work. The Green Deal and the Digital Agenda need to go hand-in-hand as a twin transition. The value of flexibility in the energy system Most renewable energy sources generate fluctuating amounts of energy, because they rely on the availability of sun, wind or water. This fluctuation creates a significant mismatch between generation and demand. Balancing the system requires adding flexibility through an array of solutions on four different levels: ·flexible energy generation (including biomass and geothermal) ·storing energy and releasing it later through batteries or other options ·markets linking the supply and demand of flexibility Digitalisation interconnect all the relevant parts of the energy system and enabling end consumers to access markets directly. Most renewable energy sources are of a variable nature. The availability of sun, wind, or water varies from seconds to seasons. This variability creates a potential mismatch between generation and demand. Balancing the energy system depends on adding flexibility, on both supply and demand sides. This flexibility ideally connects locally and system-wide, through an array of solutions that can address the fluctuations inherent in renewable energy sources. Such flexibility will be particularly important for short-term fluctuations, whereas it is unlikely to be an efficient or sufficiently scalable solution for seasonal fluctuations that require long-term energy storage. This ‘smartness’, in turn, will avoid additional capital expenditures for enhancing the existing grid infrastructure, and allow a faster deployment of electric cars, decentralised renewables, and other technologies - due to reuse of existing infrastructure.

Figure 1: Flexibility in the Energy System Source: Energy Transition Expertise Centre (2021) Digitalisation of Energy Flexibility, p. 12

The need to integrate an increasing amount of renewable energies while maintaining the security of energy supply, the decentralisation of energy generation and advent of prosumers, and the flurry of Internet of Things (IoT) devices connected to the grid require novel solutions and energy services to facilitate/incentivise flexible energy consumption and demand side management. All these services and the new actors emerging on the energy markets, ranging from aggregators and providers of flexibility to prosumers, are relying on readily available energy data. More specifically, realising such a smart system requires access to data, the ability to operate smooth and transparent data exchanges, and an effective management of data use and reuse. Operating the modern energy systems and accommodating the variety of new technologies, products, as well as new business models and market players to enhance the flexibility require bi-directional communication capabilities, data exchanges and data sharing. Not only the energy, but also data must flow freely in the system . In its turn, the quantity of data that is generated and used has been increasing at an exponential scale over the past several years while opening opportunities for data-driven innovation and new investment models. Thus, ensuring a coherent and coordinated European framework for data sharing and (re-)use, based on common approaches that ensure interoperable solutions becomes an overall objective sought by numerous stakeholders. Smart charging in Stromnetz Hamburg The decentralisation of energy generation and millions of connected smart appliances, heat pumps and electric cars transform the last meters in the distribution grids into the first, and operators have to invest in monitoring and control capabilities. An assessment for Hamburg (Germany) indicated the cost savings potential: EUR 2 million investments in smart charging to decrease simultaneous demand can prevent EUR 20 million costs for the necessary reinforcement of the grid to cater for a share of 9% of electric vehicles in the city. Source: Stromnetz Hamburg (2018), Elektromobilität – Netzausbaustrategie und Restriktionen im Hamburger

Verteilnetz https://www.hamburg.de/contentblob/10993526/1f90214d9b07e4de6323c078ff779d9d/data/d-anlage-13-pra%CC%88sentation-snh-20180504-energienetzbeirat-snh.pdf Despite the digitalisation of energy is already happening there is still a significant gap to come to a smart and flexible energy system. One essential element where more is needed, is to create suitable electricity infrastructure as well as digital-ready regulatory frameworks. Smarter grids are the backbone of the digitalisation of the energy system. It is therefore essential to foster investments in smart grids development and related enabling digital solutions. Example: IElectrix IElectrix is an EU-funded project that aims at developing innovative technical solutions and economical business models to facilitate the implementation of Local Energy Communities. This is also a way to speed up the integration of Renewable Energy Sources in Smart Grids and to increase the grid resilience and thereby the security of supply. The IElectrix project consists in implementing different smart grids demonstrators to experiment a set of functionalities required to keep up with the current energy sector transformation: renewable intermittent energies, digitalisation, decentralisation, and consumer’s implication. Source: IElectrix - Integrated local energy systems (Energy islands) (ielectrix-h2020.eu) ; Website: Indian and European

Local Energy Communities for Renewable Integration and the Energy Transition. | IELECTRIX Project | Fact Sheet | H2020 | CORDIS | European Commission (europa.eu) Through different pilots, the project aims at overcoming the challenges posed by diverse geographical, technical and economic situation. The decentralisation of energy generation and millions of connected smart appliances, heat pumps and electric cars transform the last meters in the distribution grids into the first, and operators have to invest in monitoring and control capabilities. An assessment for Hamburg (Germany) indicated the cost savings potential: EUR 2 million investments in smart charging to decrease simultaneous demand can prevent EUR 20 million costs for the necessary reinforcement of the grid to cater for a share of 9% of electric vehicles in the city. Source: Stromnetz Hamburg (2018), Elektromobilität – Netzausbaustrategie und Restriktionen im Hamburger

Verteilnetz https://www.hamburg.de/contentblob/10993526/1f90214d9b07e4de6323c078ff779d9d/data/d-anlage-13-pra%CC%88sentation-snh-20180504-energienetzbeirat-snh.pdf 1.3The benefits for citizens and consumers It may seem contradictory to address the need for investments in grids at a time where the EU is experiencing particularly high energy prices and fears shortages of energy for the coming winter, due to Russia’s war of aggression against Ukraine. These high energy prices had a particular impact on the energy poor and the more vulnerable households, for whom energy already represented a higher portion of their average expenditure. Increased renewables production and increased energy efficiency could help mitigate the impact of such episodes and reduce the EU dependence on energy imports (as stated in the REPowerEU Communication). But, in addition to other measures, this requires a smart energy system that empowers citizens through better and more innovative energy services and digital tools. For example, it is essential that consumers have the option to access their energy data, and ensure that they have the appropriate knowledge of how to use it for them to be able to adopt more energy-efficient consumption patterns and reap further benefits of energy-efficient behaviour. For instance, such was the goal of the EU-funded ECO2 (Energy Conscious Consumers) project , which created thee-learning Act4eco.eu platform, which provides 22 e-learning modules that consumers can use to learn how to plan and improve their energy efficiency. Many Member States now make it possible for households to equip their homes with smart meters to follow their energy consumption on a day-to-day, or even real-time basis. This information and insight into their energy use can help them take control of their energy consumption, make informed choices on when and how to consume and opt for the most suitable pricing contract. Moreover having the appropriate information, consumers will be able to improve their energy habits for making savings, and manage their energy behaviour to reduce their bills, which is especially important in the current high and volatile price context . Smart meters can also support a wider-range of tariffs that encourage consumers to shift their energy usage to off-peak cheaper times. This helps consumer save money and it would reduce the pressure on the energy system to activate fossil fuel capacity, including gas, at peak times. Furthermore, digitalisation allows to automate the reaction to price-signals or other incentives: consumers can use their electric vehicles and other small and easy-to-mobilise assets (i.e. batteries and heat pumps which can provide energy storage and enable bidirectional recharging) to increase grid efficiency and help the system operators to avoid costly network reinforcements thus lowering the use of system charges. This can also be the best response when too much renewable electricity is produced (digital tools can provide information in real time on the renewable electricity and of GHG emissions share in the grid, so that consumers can use clean electricity to charge their electric vehicles). Digital tools such as smart meters have helped to empower consumers in recent years. Simplicity is crucial: tools and services must be easy to understand and use so that users do not revert back to their old consumption patterns, lose interest and even disengage. Users may find it difficult to understand and apply concepts such as energy flexibility. It is therefore of crucial importance to increase their trust in demand-side management and associated innovative energy services so that they can fully exploit the potential of digital tools. Overall, new business models and actors should be encouraged in the market, as they will facilitate the introduction of innovative products and make it easier for consumers to recognize the benefits and subscribe into new energy services. To fully unlock the potential of the opportunities of digitalisation and facilitate end-users' participation in the system, awareness and learning must support the twin transitions. Consumers must be able to operate these new innovative tools so that new vulnerabilities are not created and no one is left behind. Successful green and digital transitions require significant changes in organisational culture, leadership profiles, mind-set and skillsets. Matching technological innovation with innovation in social practices and relations (both individually and collectively) is crucial for the success of the twin green and digital transitions. Digital innovation and social innovation reinforce each other. Disparities between different consumer groups (e.g., different levels of digital skills or different levels of willingness to participate in the energy markets) mean that the design of digital tools and solutions must adapt to differing needs. Different consumer groups (e.g. on the basis of consumers’ principal motivations and/or their willingness to engage) have been proposed .Digitalisation provides an additional opportunity for consumers to engage in the energy market, because the inherent flexibility of digital tools makes it possible to adapt designs to each consumers’ specificities and preferences. 1.4Enabling cooperation and collective action Communities as well as individuals can participate in the energy market. Since the 1970s in Denmark and Germany, some communities and local groups have come together to invest in shared renewable production assets, share the resulting benefits and exchange information and best practices on supporting the energy system. More recently, social innovation and digital innovation have reinforced each other. Energy communities (as defined by the Clean Energy for All Europeans Package, ) are important drivers of innovation due to the disruptive and decentralised nature of their activities (community networks, energy sharing, self-consumption), and they have more recently enjoyed increasing attention and popularity.

Digital tools for energy communities Many digital tools make it possible for communities of consumers to scale up and diversify their positive impact on the electricity system. - For instance, digitalisation makes it possible to develop business cases to provide flexibility services through aggregation. Digital tools make a seamless exchange of electricity between grid operators and the community possible. This can in turn make it possible to use digital tools and interfaces to set up dynamic pricing tools and share price signals with the community’s members. The Belgian energy community Ecopower is focusing on developing such models. The Delta-EE Whitepaper on Residential demand response shows that residential sector has huge untapped potential with over 200GW of installed assets of which HVAC and hot water heaters account for 97%. Lastly, an EU-funded project, FLEXCoop, is developing digital tools to enable energy cooperatives to act as an aggregator and build up the flexibility potential of their members. -Communities’ digital tools can be used to manage congestion (e.g. the EnerGent project partially resolved power-poverty issues by controlling inverters of households’ photovoltaic panels to support the grid). Energy communities are a testing ground for real-life experimentation with new technologies and the social arrangements needed for an inclusive and just transition, and they are some of the drivers of such forms of citizen’s empowerment. These innovative activities can often be facilitated or optimised using digital tools. For example, remote rural energy systems that suffer from high transport costs and insecure supply due to weak and unstable and/or remote connection to the medium-voltage grid can use digital tools to reduce their dependence on the main electricity grid by pooling their own consumption of individually produced electricity. Benefits of digitalisation are also evident for urban energy systems which are characterised by a complex energy infrastructure that is designed to supply energy to multiple energy users and from an increasing number of players (including members of the general public) acting not only as consumers but also as suppliers or otherwise adding flexibility to the system. A recent report published by CINEA emphasises that the digitalisation of energy systems has multiple specific benefits in urban contexts. These benefits also extend to mobility, infrastructure, and buildings. The same report examines different scenarios for 2025, 2030 and 2040, and formulates policy recommendations to foster these evolutions and lift remaining barriers. One of the most interesting developments of the past decade has been the development and implementation of tools that enable the peer-to-peer (‘P2P’) trading of electricity. A recent study from the German Institute for Ecological Economy Research (IÖW) evidenced the enormous potential for energy sharing: more than 90% of all households in Germany could benefit from electricity from citizens-owned power plants, thereby mitigating current high European energy prices. Evidence also shows that P2P trading of electricity increases the added-value citizens (that is to say both self-producers and consumers) can gain from engaging in electricity trading, which in turn may drive increased levels of private investment in renewable energy generation assets. Peer-2-peer trading oSeveral companies and projects – both in the EU and elsewhere – use peer-2-peer trading: The Brooklyn microgrid (BMG) project in the US has enabled 40 prosumers and 200 consumers to sell the electricity they produce on their own premises at a price they are free to set for a period of 12 months. oThe RENeW Nexus Project in Australia has enabled 22 residential prosumers and 26 residential consumers living in the same area to trade their surplus energy production through a blockchain-based platform. oThe Dutch SchoonSchip pilot project has interconnected a floating neighbourhood of 46 households and enabled them to engage in P2P residential energy sharing while at the same time helping the operator of the distribution system to avoid congestion. The project was set up under a Dutch national experimentation scheme. Through the application of demand response, energy storage, conversion and electrification, the Schoonschip smart grid has become almost fully autonomous, requiring only a minimal backup connexion with the rest of the national grid: the 46 homes with a combined capacity of approximately 900 kVA are connected to the public grid with a single connection of only 160 kVA. oOgarniamgrad.pl is a Polish energy trading platform that makes it possible to buy and sell electricity at real-time auctions. It has saved more than USD 970 000 for its users. oThe EU project PARITY aims at delivering a transactive flexibility framework that will increase durability and efficiency of the electrical grid, while simultaneously enabling the adoption of more RES through enhanced real-time control of DER Flexibility combined with novel active network management functionalities. PARITY goes beyond the traditional “top-down” grid management practices by enabling the functioning of a local flexibility market platform making use of IoT, as well as blockchain technologies for P2P energy trading. The examples elaborated in the PARITY project tend to evidence that the major share of the cost savings enabled by consumer participation in the energy system result from local (P2P) energy trading, but hybrid market models (energy trading + flexibility provision) are also able to generate additional smaller revenues from flexibility provision. oThe EU-funded Energy Community Cooperatives (ECCO project) has created a digital platform to provide users with all the necessary resources for community energy projects. These include: (i) a community space which connects users and provides space for communication, (ii) a resources page with links to relevant resources to assist community energy groups’ progress, and (iii) custom-built tools designed to measure the progress of community energy projects, including: a) a greenhouse gas calculator that calculates the annual carbon dioxide savings that can be achieved by consuming different forms of renewable energy, b) a self-assessment tool to help community energy groups see what stage of development their projects have reached, c) a technology decision plan that suggests the best renewable energy option for a given user based on the resources available in their local community and d) a timeline tool that gives an in-depth view of each step in the ECCO timeline. 1.5Cooperation to share knowledge Knowledge and knowledge sharing Upscaling from innovations Organisation and governance structures ·As we gradually progress to a green energy system, new knowledge which is currently lacking will have to be built up, at both EU and national levels. Technology, market functioning and legal frameworks are all closely connected to each other. Knowledge needs to be shared across different policy areas and levels. ·A lot of research and innovation is taking place in the EU on relevant topics, producing a lot of new knowledge, but this knowledge is sometimes fragmented. Collective learning and knowledge sharing should be improved (BRIDGE is active in this area). Knowledge should be shared between all stakeholders (including policymakers and regulators in Member States, market stakeholders and the general public). Sharing knowledge will make it possible to develop a common vision and strategy, making it easier to create the conditions for success. ·As the transformation towards a green and digital energy system progresses, new knowledge which is currently missing will have to be built up, both on an EU and on a national level. Technology, market functioning and legal frameworks are strongly intertwined, and its corresponding knowledge should be shared across the different structures and at all levels. ·Knowledge coming out of research and innovation activities is sometimes fragmented. Many respondents ask for extended collective knowledge sharing, organised at EU level, among policy makers and regulators in MS, stakeholders, and last but not least, European citizens. ·A significant number of EU research and innovation projects have not upscaled their results into new business operations. The main reasons given were interoperability issues and inconsistencies between the Member States’ legal frameworks. ·In the step towards new business operations, coordinate action at EU and MS level is asked to ensure governance, market design, business models, standardisation and interoperability facilitate scale-up. The evidence from policy trends, stakeholders’ feedback and insights into research and innovation projects that were analysed as input for this action plan underlined the importance to understand and steer the digital transformation of the energy system. The potential to accelerate the EU Green and Digital Transition and the implementation of the REPowerEU Plan requires a closer cooperation in the EU, with likeminded countries and international organisation, and between energy and digital players across the entire energy value chain. 2Developing an EU framework for sharing data to support innovative energy services 2.1Context Strategic and regulatory EU frameworks are starting to lay down measures to ensure coherent approaches and interoperable solutions. Thus, the EU Strategy for Energy System Integration stresses the importance of data availability and interoperability for the functioning, development and further integration of the energy system, and for realising the full potential of prosumers and grid flexibility. Additionally, several legal acts already in force or recent legal proposals for the energy sector include provisions regarding the exchange of energy-related data. ·The Electricity Market Directive and Regulation include provisions on the access to, and interoperability of data from (smart) meters, as well as requirements for transmission and distribution system operators with regard to data access and data management. ·The Commission’s proposal for a revision of the Renewables Directive lays down requirements on access to data to enable smart and bidirectional charging of electric vehicles. It also requires making available information on the share of renewable electricity and the greenhouse gas emissions content of the electricity supplied in the Member States. ·The Commission’s proposal for a revision of the Energy Performance of Buildings Directive defines rules for access to, and exchange and interoperability of data from (smart) buildings. This will enable the rollout of new smart building services and will support renovation actions. In addition, recent legal proposals and strategic documents cover general topics regarding the exchanges of data. They are highly relevant for numerous economic sectors, including the energy sector. ·The Commission’s proposal for a Data Governance Act aims to foster the availability of data for use by increasing trust in data intermediaries and by strengthening data-sharing mechanisms across the EU. It also establishes the European Data Innovation Board, a new expert group that would support the Commission on enhancing cross-sectoral data sharing and (re-)use. ·The Commission’s proposal for a Regulation on harmonised rules on fair access to and use of data (Data Act) defines generic data-sharing requirements, based on consumers’ requests, for non-personal data generated by physical, connected objects.

·The Commission’s proposal for a Regulation on alternative fuels infrastructure aims to support the availability and accessibility of data from publicly accessible recharging points, ensuring a suitable functioning and offering of services. ·The European Data Strategy published in 2020 announced the establishment of common European data spaces in nine sectors, including energy. The energy data space will reinforce the availability and cross-sector sharing of data, in a customer-centric, secure and trustworthy manner. This will facilitate innovative solutions and support the decarbonisation of the energy system. ·The Statement of the Members of the European Council of 25 March 2021 calls for progress in establishing the sectoral data spaces announced in the European Data Strategy. ·Building on the European Data Strategy, the Commission’s 2022 Staff Working Document on Common European Data Spaces stresses the point that the energy data space will help the further integration of renewables, increase the energy system efficiency, and ensure a smooth and competitive transition towards the electrification of sectors such as heating and transport. ·The European Interoperability Framework lays down guiding principles and recommendations that could drive the seamless exchanges of data within and across various sectoral data spaces. Several key actions will therefore be implemented with the aim of making the best use of data in the energy sector, and helping to build, scale up and maintain interoperable solutions for a strong European energy system. The actions proposed have the electricity system at their core, as an accelerated integration of renewables and electrification are now driving the pace of its transformation. However, the proposed framework is designed not only to closely interact with and gradually include other energy carriers (e.g., decarbonised gases and hydrogen), but also to interconnect with other sectors such as transport and finance. Furthermore, it should be noted that the actions do not directly address matters related to the ownership of data or intellectual property rights that may apply. Nor do they directly address data confidentiality, privacy and personal data protection. These very important cross-policy aspects are all considered to have a general applicability, which is governed by separate frameworks. The focus is kept on data sharing arrangements and processes that are needed to improve the functioning of existing energy services, and on developing new ones in order to increase the share of renewables in the energy system and to strengthen the system efficiency and the overall security of supply. In this approach, it is considered that the relevant actors (e.g. prosumers) have an interest in sharing their energy-related data. The relevant stakeholders therefore express their consent for sharing their energy-related data when subscribing to new services that bring them direct benefits, e.g. through the monetisation of their flexibility, by lowering the energy bills through charging their electric vehicles (EVs) in a smart way, by improving the self-consumption of the energy produced by their PVs or by any other means. Additionally, data sharing is envisaged to be conducted among eligible and trusted parties. Finally, the data sharing arrangements that need to be built in a coordinated way aim primarily to further develop several areas of the energy value chains, and innovative energy services and products that are key to deliver on the Green Deal and REPowerEU objectives. The policy areas that require easy and seamless data exchanges include: establishing new flexibility products and services that help the integration of increasing shares of renewables and strengthen the liquidity and resilience of the energy markets; facilitating the rollout of smart EV charging and vehicle-to-grid services; supporting smart energy buildings as a source of renewable energy production and flexibility in the energy system, and making the data from buildings available to define business cases for renovation and improving the buildings’ overall efficiency. The data exchanges among the grid operators (i.e. transmission and distribution system operators), which are required for the functioning and stability of the grids, are not directly addressed here, but the strong synergies will be closely observed and factored in. In other words, the main aim will be to coordinate action at the edge of the grids and at the interface with the electricity markets, by bringing together the views of a large variety of stakeholders that would otherwise find very hard to coordinate among themselves. 2.2Evidence, projects and best practice Numerous stakeholders have pointed out the need to strengthen EU cooperation and coordination on the exchange of data for energy. Their views indicate several key areas of action and the main priorities to be addressed. The Commission conducted an online public consultation between October 2021 and January 2022 to collect the views of citizens, businesses and national authorities on the main priorities for digitalising energy. The answers received stressed the point that insufficient cooperation, at various levels, is a barrier to unlocking the full potential of the data. Legal uncertainties due to different national rules on accessing energy data across Member States, and the lack of appropriate infrastructures for such data access prove to be currently quite problematic. The national organisations should therefore cooperate and harmonise their approaches whenever possible. Additionally, any legal uncertainties regarding their mandates should be resolved and the responsibilities of the actors involved should be clarified. Country example: Austria Nation-wide standardized data exchanges on energy started in 2012, with the implementation of an automated digital process for consumers to switch their energy supplier. The data exchange framework underwent multiple developments over time, driven by the needs of smart grid stakeholders that established working groups. Today, a decentralized, scalable, and highly standardized framework covers many additional use cases, including customer billing and customer management processes, access to metering and consumption data, processes linked to energy communities etc. The principles observed ensure that data always stays as close to the source as possible and is only exchanged based on customer consent or in the context of well-defined business processes observing clear legal requirements. Consumers and energy market players get a unified and secure interface to interact with the smart grid services. All data exchanges are conducted with securely signed and encrypted market messages. Customers can give and revoke their consent to sharing data and/or participating in an energy community. Each new market process is developed on the basis of public consultations and it subsequently becomes mandatory for all market actors. The management of the technical infrastructure for the energy-related data exchanges (EDA) was initially ensured by a working group without a legal personality. In 2020 this was transformed into a limited liability company (EDA GmbH), which now acts as a solution provider. Additional information: https://eda.at ; https://ebutilities.at . Interoperability aspects were also a major area of concern for the stakeholders consulted. The lack of interoperability for accessing data and exchanging it between devices and/or organisations was seen as the main barrier at operational level. Concluding, the top three actions recommended by stakeholders to be taken at the EU level were: (1) to define roles and responsibilities and to clarify the legal framework for data exchanges in energy; (2) to address interoperability; and (3) to create a governance structure for access to and sharing of data. The Commission followed up its online public consultation by organising a series of six workshops in February and March 2022 to collect additional inputs. Hundreds of participants attended and shared valuable views and ideas. One of the key conclusions drawn referred to the opportunity to establish an EU expert group on data for energy. This would bring together several main categories of stakeholders, including Member State authorities and regulators, grid operators and energy market players, research and innovation experts, technology providers and equipment manufacturers, standardisation representatives, and organisations representing consumers/prosumers. Additionally, a governance for the upcoming energy data space should be built and interoperable building blocks should be established for developing the data space in a robust and scalable way. Country example: The Netherlands All Dutch electricity grid operators joined forces in 2007 and embarked, via the NEDU association, on exchanging energy data with market stakeholders. The scope covers data for supplying energy, consumers switching their energy suppliers, and exchanging metering data. In 2018 it became apparent that the energy transition would require data exchange between more parties within the energy sector, and with other sectors such as transport, buildings, and the financial sector. A national initiative was launched and resulted in a legal entity (BAS, the data exchange framework administrator) and an association (MFF, the market facilitating forum, which replaced NEDU). Both became operational in April 2022. BAS is an independent legal entity that has the Dutch TSO and DSOs as its shareholders. BAS is expected to handle all energy data exchanges. In the MFF meetings all relevant energy and cross-sectoral stakeholders, which require access to energy-related data, meet and agree on standard data formats and data exchange processes that should be used. Once agreed, BAS will implement those solutions, and monitor and report on their correct usage. Additional use cases for data exchanges are being actively developed as needed. Thus, data that is instrumental for operating the electricity system is currently exchanged between market stakeholders and grid operators. This is done via the GOPACS platform, which coordinates the procurement by grid operators of market-based flexibility services that are used to mitigate grid congestion. Furthermore, frameworks start to be developed for accommodating smart EV charging, and for supporting social housing associations to renovate the homes of their tenants for improving their energy efficiency. Additional information: https://www.mffbas.nl/ ; https://en.gopacs.eu/ . Country example: Estonia Estfeed is the first Estonian secure platform and protocol for managing distributed exchanges of metering and consumption data between data providers and data users. The transfer of metering data requires the owner’s consent. The platform is designed and operated by Elering AS, the Estonian TSO, as a flexible and scalable system to share consumer energy data with any energy services that can use it for deploying value-added services. A dedicated API (Application Programming Interface) allows access to the platform services through standard interfaces. The initial use cases that drove the design of the platform referred to supporting and coordinating the energy supply processes. As such, the main users have been energy suppliers, balance responsible parties and grid operators. Recently, aggregators, as providers of flexibility services to the electricity system, were also granted access. Furthermore, any consumer/prosumer can grant access to its data to any third party, while remaining the owner of that data and being able to fully supervise its use. Estfeed is built on the X-Road software-based national solution, which manages data exchanges and is the backbone of e-Estonia. X-Road allows various public and private sector e-service information systems to link up and function in harmony. Additional information: https://elering.ee/en/developments-related-energy-companies ; https://e-estonia.com/solutions/interoperability-services/x-road/ . Challenges regarding interoperability and access to data that might hamper the large-scale deployment of demand side solutions for flexibility were also identified in an expert report published by the Smart Grids Task Force (SGTF). The report recommended several key actions, which included: ensuring stakeholder coordination at EU level to promote data access and interoperability, jointly developing guidelines, defining standard capabilities and requirements for smart appliances, defining an EU framework and associated building blocks for data access, and working with the Member States for establishing customised national implementations of those building blocks. A separate SGTF report laid the ground for more detailed work on data access in the electricity and gas sectors. It recommended engaging all relevant stakeholders and agreeing on several key interoperability features. Building upon this work, the SGTF experts further proposed a set of interoperability rules to be considered at EU level for access to electricity metering and consumption data. Valuable work for improving data exchanges in energy and advancing interoperability is being carried out by the Bridge Initiative of the European Commission. The Data Management working group regularly publishes reports based on the findings and lessons learnt from research and innovation projects. Their reports focus on analysing frameworks and technical matters that underpin the exchange of data in a secure and interoperable manner. Ensuring interoperability is identified as a key prerequisite for a successful energy transition and solutions are being sought. Therefore, a common European reference architecture for data exchanges and a repository of use cases are being developed and proposed to be used by the energy actors and research projects, and a methodology was developed for analysing the system implementation of flexibility-related use cases. These products are being further refined and developed. Further joint work by key stakeholders will be needed in order to ensure their use on a wide scale. This technical perspective is naturally complemented by the regular reports published by the other Bridge working groups, which focus on regulatory models, business models, and consumer and citizens’ engagement, respectively.

The OneNet project OneNet is co-financed by Horizon Europe with EUR 22 million and has a total value of EUR 28 million. Over 70 partners from 22 European countries, including two major associations of electricity grid operators (ENTSO-E and E.DSO) are part of a unique consortium with an ambitious goal. They aim to provide a seamless near real time integration of all the actors in the electricity networks across Europe for the optimization of the overall system and the promotion of an open and fair market structure. More specifically, during its three-year implementation schedule lasting until September 2023 the project undertakes to: define standardised products and key parameters for grid services that aim at the coordination of all actors, from grid operators to customers; define a common IT architecture and common IT interfaces that enable open interactions among the existing platforms for all energy products and services envisaged; and implement and showcase scalable solutions grouped in large-scale demonstrators covering major regions in Europe. OneNet therefore works to develop an open and flexible architecture to transform the actual European electricity system, tackling country- or zonal fragmentation, and building a pan-European smarter and more efficient coordination. The vision is to coordinate market and network technical operations among them and across different countries, while maximizing the consumer capabilities to participate in an open market structure. The general use case of the OneNet system describes, among others, the main steps to enable a cross-platform energy data exchange using the OneNet middleware. Such a data exchange will allow building multiple cross-platform services for market-based management of flexibility in the electricity system. Open mechanisms will allow the OneNet participants (including platforms, applications or services that act as Data Providers or Data Consumers) to interact with each other by using the OneNet Middleware. Additional information: https://onenet-project.eu/ ; https://op.europa.eu/en/publication-detail/-/publication/abf32809-143e-11ec-b4fe-01aa75ed71a1/language-en . With regard to the main priorities that would warrant enhanced data exchanges and require extensive stakeholder coordination, the feedback collected during the preparatory phase of this action plan converged by indicating several areas. The vast majority of respondents in the online public consultation indicated that balancing electricity supply and demand by using flexibility solutions should be the top priority. The stakeholder workshops went into more detail and stressed that priority should be given to the areas that are rapidly developing from strategic, legal, technical and organisational perspectives. These areas include aggregation, demand response and flexibility services for the grids, smart and bidirectional EV charging, and reinforcing the role of smart buildings as key players for improved energy efficiency and innovative energy services. Similar priorities were identified by a recent study completed by the Energy Transition Expertise Centre (EnTEC). The RENAISSANCE project RENAISSANCE is a Horizon Europe project that ends its 36-month implementation schedule in the second half of 2022. The project has a total value of EUR 6.9 million, out of which EUR 5.9 million represent the EU co-financing. Fifteen organisations from 7 European countries are partnering for a successful delivery of the project objectives. RENAISSANCE aimed at demonstrating highly replicable design and management approaches for integrated local energy systems, that achieve high participation of local consumers (15-20%), exceed at local level the EU targets for renewable energy sources (37-80%) while decreasing the energy price for community members (10-15% below current market prices). The methodology and each of the four pilots (in Belgium, Greece, Spain and the Netherlands) covered key energy vectors (like electricity and heat), and involved different actors (e.g. households, SMEs, institutions) to valorise flexibility services within and between communities, and with DSOs. Local data exchanges for each pilot site, as well as between pilots, were instrumental for putting the design into practice, lowering the local GHG emissions and bringing value to the local energy communities of prosumers. The secure, interoperable and scalable RENAISSANCE platform interconnects all energy vectors of the demonstration sites into a unique decentralized multi-vector energy services market where consumers/prosumers can interact and perform financial actions defined by smart contracts. Additional information: https://www.renaissance-h2020.eu/ ; https://op.europa.eu/en/publication-detail/-/publication/abf32809-143e-11ec-b4fe-01aa75ed71a1/language-en . The InterConnect project The Interconnect project funded by the Horizon 2020 programme gathers 50 European organisations from 11 countries to bring efficient energy management solutions within the reach of end-users. The four-year project will operate until 2023 and has a value of EUR 35.8 million, receiving an EU contribution of EUR 35.8 million. InterConnect will implement interoperable solutions connecting smart homes, smart buildings and smart grids. It will demonstrate, among others, the benefits of enabling smart homes and buildings to become active energy players. Seven large-scale pilots in the participating countries are deploying and testing innovative digital solutions that are interoperable and provide flexibility services to the electricity grids. These pilots make it possible to reduce grids investment and operational costs, and will benefit consumers. Facilitating seamless exchanges of interoperable data will also make it possible to extend these benefits beyond R&I pilots. Additional information: https://interconnectproject.eu/ ; https://op.europa.eu/en/publication-detail/-/publication/abf32809-143e-11ec-b4fe-01aa75ed71a1/language-en . 2.3Key actions Against this backdrop, the Commission will take concrete steps to establish a common European energy data space for improving the access to, exchange of, and (re-)use of data. The goal is to broaden the availability of data, and to make smooth and transparent data exchanges possible for the benefit of different players and different use-cases throughout the entire value chain. They include: system operators, suppliers, aggregators, providers of storage and/or demand response services, energy service companies, building managers, financial institutions, consumers and prosumers, manufacturers of electric vehicles, smart equipment and appliances (including SMEs), operators of charging points for EVs. The best use of already available data must be ensured, including data from smart meters, to serve the interests of consumers and the energy system as a whole. The actions will also enhance the interoperability of energy assets and services, will facilitate the comparability of solutions, promote standardisation, enhance grids flexibility and responsiveness, and will ultimately contribute to the overall energy security and reliability of the energy system. Along the road towards deploying a common European data space for energy, several underlying principles will be observed. ·Access to non-personal and/or anonymised energy data needs to be made available to all relevant parties, based on the consent of the data owners and while observing technical data protection needs and confidentiality requirements. Data monopolies need to be avoided. ·Cybersecurity and personal data protection are an intrinsic part of the approach. ·Consumer acceptance and empowerment are key, being the starting point for accessing and using data coming from individuals and businesses. ·EU data sovereignty principles are duly observed, with data being able to flow within the EU and across sectors. ·The rules for access to, and use of data are fair, practical and clear, and there are clear and trustworthy data governance mechanisms in place; there is an open, but assertive approach to international data flows, based on European values. ·Open-source solutions, including software modules, open standards and data models will be considered whenever possible, as enablers of innovation and generating economies of scale. The use of open application programme interfaces (APIs) should nonetheless be the norm, facilitating the exchanges of real-time data. ·Data that are to be shared (and widely exchanged) should be focused and should contain only the elements that are really needed for establishing and managing innovative energy services. Additionally, non-essential data should be stored and processed locally. ·The construction of the energy data space will be closely coordinated with the development of other sectoral data spaces, so that interoperable cross-sectoral solutions and services could be rolled-out. The logic of the actions envisaged will cover several key dimensions. ·The actions will ensure that energy data is actually made available and shared with the relevant partners and market players (subject to the consent expressed by the owners of that data). Access to relevant energy data is instrumental for bringing innovative services to the market and creating value along the value chains. ·They will coordinate the EU and Member States efforts and relevant initiatives, and will ensure that the European arrangements build on the national ones, and facilitate pan-European or cross-border transactions. National models and arrangements for data exchanges should be coordinated at EU level with a view to furthering the integration of the energy markets.

·They will bring all relevant parties together to develop coherent business models and grid services that are deployed at scale and in an interoperable manner. Stakeholders should therefore coordinate their work when developing relevant energy services that fully respond to the key enablers laid down in the energy regulatory framework. Economies of scale and faster deployment could be reached this way. ·They will capitalise on the solutions that are readily available and, where necessary, accelerate their development and ensure their full market uptake. These key inputs equally include relevant legal instruments and arrangements (such as interoperability requirements for metering data), market and stakeholders coordination results (for instance a code of conduct for smart appliances), and key results achieved by research and innovation activities (for instance, recommendations on data exchanges and interoperability put forward by the Bridge initiative). · They will mobilise the resources and interoperable building blocks developed as described above in order to roll out a common European energy data space. Coordination arrangements will contribute to the future governance of the data space, while the various interoperability building blocks will facilitate effective data exchanges across the EU energy markets and value chains. The key actions that will be pursued are grouped into three main dimensions, bringing together in a complementary way top-down coordination initiatives, with bottom-up targeted actions, all benefitting of support from the latest developments in research, innovation and digitalisation actions and programmes. A ‘one size fits all’ solution would not be optimal for this area of action, which is very complex in terms of legal, operational and technical requirements, entailing numerous processes and involving a variety of actors. Therefore, a development of customised approaches based on use cases will be pursued. A first category of actions will define the strategic approach, aiming to ensure convergent and coherent EU action. Thus, a key action is to strengthen the coordination at EU level regarding data exchanges in the energy sector. The Commission will set up the ‘Data for Energy’ (D4E) expert working group to coordinate the views and actions of the relevant stakeholders with regard to sharing and (re-)using energy data. The working group will foster the exchange of experiences and best practices, and will assist the Commission in the preparation of policy initiatives and regulatory frameworks. Notably, its advice will play a key role in the preparation and rollout of a common European data space for energy, and in setting up its governance. A set of priorities will guide from the outset the activity of this expert group, and those are based on areas of energy markets and services that are in rapid development and undergo profound transformations. The D4E group will be integrated, as a permanent working group, within the current ‘Smart Grids Task Force’ (SGTF). The SGTF will be formally re-established, expanded and reconfigured to achieve its revised objectives, which will include specific competences regarding data exchanges. This overhaul will include broadening its membership and further developing its internal organisation and working procedures. Member States’ representatives will work together with energy system operators, technology and service providers, manufacturers, research and innovation organisations, academia, financial institutions, technical standardisation experts and NGO representatives to strengthen coordinated data sharing across Europe, to improve interoperability and to reduce market fragmentation. The participation of Member States in D4E is key, as data exchange is defined by energy market and data rules and principles agreed at EU level, but it also requires national data exchange frameworks for its practical implementation. Additionally, ensuring EU-wide interoperability among the various national frameworks will be needed for successfully building a genuine common European energy data space. Some of the text boxes above give examples of data exchange governance in Member States, and of EU-wide projects that achieve consistency and interoperability across borders. Facilitating and promoting the exchange of best-practices and experiences between policy makers in Member States, while learning from EU-wide projects and making best use of their results, will be an important added value of D4E. D4E will undertake the development of a portfolio of European high-level use cases for data exchanges in energy. These use cases represent the main priorities that need to be analysed and developed. The coordination at EU level will aim to ensure that, on the one hand they evolve into the main elements of a future common European energy data space and, on the other hand they build on the work already carried out either in the Member States or through various EU initiatives. The high-level use cases that will be addressed from the outset by D4E are: 1.‘Flexibility in energy systems’ – aims to further develop and roll out flexibility products for the energy markets, including demand response services for the integration of renewable energy sources and to limit grid congestion, including facilitating the aggregation of flexibility potential based on access to data from devices behind-the-meter; 2.‘Smart and bidirectional EV charging’ – refers to integrating smart EV charging into power grids and promoting bidirectional vehicle-to-grid (V2G) services; 3.‘Smart and energy-efficient buildings’ – develops mechanisms for capitalising on data from smart buildings for promoting and financing energy-efficient building renovations. It should be noted that although the second priority mentioned above could also be analysed as part of the wider flexibility approach of the first high-level use case, it is nonetheless defined as a priority in its own right because of the distinctive characteristics, prominent uses, and cross-sectoral application. Other high-level use cases might be considered later on, depending on the development priorities of EU energy grids and markets. D4E will develop these priorities to detail the use case-specific needs and objectives for data exchanges. This will prepare the ground and building blocks for establishing a common European energy data space. In doing so, D4E will make the best use of the relevant inputs and building blocks developed by various initiatives or new legal instruments, and will closely interact with existing initiatives to explore synergies. These include: the upcoming Network code on demand side flexibility (in particular for the 1st high-level use case above), the work of the Sustainable Transport Forum (STF) (for the 2nd high-level use case), and that of the Expert group on European financial data space, the Energy Efficiency Financial Institutions Group, and the Smart Readiness Indicator and its platform (for the 3rd high-level use case). This work also aims to establish EU-wide interoperability principles both inside the energy data space, and between energy and other European data spaces (e.g. for transport or for financial services). Interoperability will be analysed and worked on in all its different dimensions, be it coherent business and functional approaches based on common use cases, or technical interoperability ensured by common data models and communication protocols. A close cooperation with the upcoming European Data Innovation Board is envisaged to that end. As an example of ensuring cross-sectoral interoperability and data sharing, D4E will jointly work with the Data group of STF for developing in detail the high-level use case on smart and bi-directional EV charging, and with the Expert group on the financial data space for developing the details on green mortgages and funding green renovations under the use case on energy efficient buildings. Ensuring stronger linkages between the energy and transport sectors could contribute to the overall optimisation of the energy system as a whole. The integration of electric vehicles into the energy system offers a clear opportunity to provide flexibility to the electricity system, facilitating the incorporation of renewable energy and supporting the development of an energy-efficient charging infrastructure. D4E and the Data group of STF will pursue an effective expert collaboration for outlining the requirements and key actions to develop effective and interoperable European data-sharing arrangements for the energy system, capitalising on and complementing the provisions for governance and data sharing of electric vehicle charging infrastructure. To that end, the two working groups will define a joint work programme with the aim to issue recommendations on common principles and best practices for supporting the EU-wide uptake of smart and bidirectional charging solutions. They will also work to define the key elements for a data exchange framework between grid operators, aggregators and relevant charging infrastructure stakeholders that supports a successful integration of electric vehicles into the energy system. Limiting grid congestion and enabling vehicle-to-grid (V2G) services will be key objectives. Furthermore, seamless data exchanges between the energy and the financial data spaces could help unlocking additional private financing to support the energy transition. As a general approach, the activity of D4E will cover two main phases of development. ·In the first phase, the precise scope of the EU action in all the three high-level use cases will be further developed by building on, and complementing various national initiatives. The roles and responsibilities of the main actors that exchange data will be clarified and the data flows and their various components will be defined. Horizontal requirements will be established, including the legal, operational, functional and technical components that underpin those data exchanges. The identified processes and principles will constitute the main building blocks of the future energy data space. The work of the first phase, envisaged to take around 24 months, will use the immediate inputs that will be made available by the second and third categories of actions described below. The continuous development of the energy data space and ensuring its subsequent improvements and expansions will remain a key task of D4E on long term;

·In the second phase, after the main building blocks will be defined and agreed upon, D4E will assist the European Commission in deploying the common European energy data space, and will play an active role in establishing its governance. This will be done in close coordination with the governance of the other European data spaces, to ensure consistent approaches and to embed interoperable processes. Overall support, coordination and guidance to ensure a coherent development of the various sectoral data spaces, and interoperability among them, will be provided by the European Data Innovation Board and the Data Spaces Support Centre. A second category comprises immediate actions, which will feed into the strategic coordination and will provide the first deliverables for enhancing data exchanges and underpinning the work of the upcoming D4E expert group. These actions represent targeted initiatives, for which preparatory work is being carried out, and will provide immediate results. Their outcomes will benefit the work that the D4E will undertake for developing the high-level use cases. An implementing act on interoperability requirements and procedures for access to metering and consumption data is being developed and will be submitted by the Commission for adoption through the comitology procedure. Subsequently, the Commission will start the preparation of one or more implementing acts on interoperability requirements and procedures for access to data required for demand response and customer switching. The Commission was empowered to adopt these acts by the Electricity Market Directive. These implementing acts will lay down the rules regarding the interoperability requirements and non-discriminatory and transparent procedures for access to, and management and exchange of data generated by the (smart) meters, aiming to support the interoperability of energy services throughout the EU. The Commission will also promote a code of conduct for energy smart appliances to boost participation in demand response schemes. This action will build on the work started under the Ecodesign framework. Through this action there will be defined sets of (functional and interoperability) requirements for energy smart appliances. These requirements would demonstrate a specific ‘energy-smart’ behaviour of products, meaning that they are able to participate in demand response schemes and they could do so in an interoperable way. The code of conduct will be offered for adherence to the manufacturers that place equipment on the EU internal market. A mass adoption of this Code of Conduct will mean that heat pumps, smart EV chargers, PV inverters, smart washing machines and other smart home appliances would be able to easily communicate with each other and aggregate efforts to provide flexibility to the grid. This level of interoperability is expected to greatly facilitate both the participation of consumers/prosumers in demand response schemes, and the efforts of aggregators to access significant numbers of assets and installed flexibility capacities. Thirdly, research and innovation actions will, together with pilot deployments of data exchange frameworks and solutions, support the development and implementation of the actions detailed above and the deployment of the common European energy data space. Substantial funding will continue to be made available through Horizon Europe and Digital Europe programmes for research and innovation, and to bringing digital transformation towards market deployment. European projects will be invited to develop and upscale the high-level use cases, and to bridge the identified market gaps. They will also start to prepare and demonstrate the building blocks of the upcoming energy data space. In particular, the Digital Europe Programme will include a specific call in 2024 for supporting the deployment of the common European data space for energy. This will capitalise on the results that will be achieved by five projects funded by Horizon Europe, which aim to establish the ground for a common European data space for energy. As an important step forward for enhancing interoperability on a European scale, mechanisms for building interoperable solutions will be embedded from the outset in the future research and innovation projects. The Bridge initiative, which groups together all the Horizon 2020 and Horizon Europe projects that are active in the areas of smart grids, energy storage and digitalisation, will take concrete steps in that direction. Key building blocks are being developed and will be proposed for use by all the future European projects. These interoperability blocks include a repository of common use cases, agreement on reference architectures to be widely used, and the use of a set of harmonised role models for the energy actors. Other building blocks could be developed in the future, based on the needs that are identified by the projects. Complementing these technical products, coordination activities will ensure that the widespread use of these technical products will be embedded in the work plans of Bridge and its various working groups. This will boost the interoperability and scalability of the solutions developed by the research projects, and thus prepare them better for their large-scale adoption in real-life operation. A subsequent step will be to feed these results into the work of D4E, because they could be used for the development of the high-level use cases envisaged. 3Details on actions to promote investments in a smart electricity grid As highlighted in the introduction, to digitalise the energy system and be able to fully exploit the opportunities it brings, investments in smart grids development and related enabling digital solutions are instrumental. Currently the pace at which these investments are taking place is not high enough. It is therefore necessary to speed up investments in smart and digital electricity grids in order to make the network and the energy system as a whole more intelligent (ref. Expert Workshop held on 25 May 2022). This was also highlighted during the open public consultation conducted as part of the consultative process on which this Action Plan is built upon. Many of these investment projects are innovative, so a regulatory framework that further supports innovation is crucial. Net2DG Horizon 2020 Project The Net2DG Horizon 2020 Project has led to the development of an ICT-Gateway that enables a digital twin of the low voltage distribution grid. On top of this digital twin, some applications for Grid Monitoring, Loss Calculation, Outage Detection and Diagnostic have been developed. Overall, this architecture leads to a fully digital process for operation and planning of the low voltage grid. The system has been deployed in two field environments in Germany and Denmark and field trials in the low-voltage grid have allowed to highlight the following benefits of using this system: Source: Net2DG Horizon 2020 Project, http://www.net2dg.eu/wafx_res/Files/Net2DG_D5.3_25.06.2021.pdf 1.Outage detection and diagnosis time could be reduced to few minutes 2.Grid losses could be reduced by 11% via voltage management applied in combination with continuous voltage monitoring; when applying a variant of the reactive power coordination of inverters, a reduction by 20% was possible. 3.The hosting capacity of the field trial example grid was increased by 30% through an enhanced planning process using the digital grid status, and an additional 50% increase was achievable through the coordinated reactive power management of the inverters. Investments in digitalisation of the grid by Fluvius In its 2022-2032 investment planning, Fluvius, the Flemish distribution system operator (DSO), has added EUR 4 billion in planned grid investments to the EUR 7 billion already planned to achieve the energy transition. Fluvius evaluates that an additional EUR 2 billion in hardware (e.g., cables, etc.) investments would be needed if the investments are not ‘smart’ (i.e. if they do not include, for example, the roll-out of flexibility services, smart meters and capacity tariffs). Source: Investeringsplan 2023-2032, versie 8 juni 2022 (versie voor publieke consultatie): over.fluvius.be/publicatie/investeringsplan-2023-2032 In many Member States, the regulatory frameworks appear to set barriers to innovation on electricity infrastructure. It may be the case that there are no specific provisions related to innovation or that these set out a bias towards capital expenditure (CAPEX) based solutions instead of operational expenditures (OPEX) solutions. In general, innovative solutions that are usually of lower (total) costs and more operational expenditure (OPEX) intensive are not as attractive to invest in as they should be . 3.1Support the development of a Digital Twin of the EU Electricity Grid In order to establish a long-term strategy for innovation, promote investment in a smarter, greener, safer and more resilient electricity network, and reduce the associated investment risk, an EU “digitalisation of energy” flagship initiative, in the form of a Digital Twin of the EU electricity grid, aims to ensure structured cooperation on investments and data exchange between network operators. Holistic DSO and TSO cooperation in network planning and operation is a prerequisite for a smart electricity grid. The EU DSO Entity and ENTSO-E play a key role in line with the tasks set for them under the Electricity Regulation, whilst considering the required flexibilities at national level, and cooperation to create a Digital Twin of the grid can further facilitate such cooperation.

A Digital Twin of the EU electricity grid will not only help optimise operations management and network development planning, but also streamline renewable integration analysis, synchronise data from various sources across the value chain, and generally strengthen the visibility and controllability of the grid. It will also make it possible to investigate and assess how the electricity grid responds to stimuli or shocks (e.g. renewable energy sources integration, demand response and cyberattacks) using forecasting and long-term modelling, and thus contributing to a more resilient electricity grid. It is also vital to test the application of science and innovation in the energy sector (e.g. testing the combination of high performance computing, big data, AI and cloud computing). The aim of the Digital Twin will be to enhance the efficiency and smartness of the grid in order to make the networks and the entire energy system more intelligent. The creation of the Digital Twin will be a stepwise process take place step by step and will be achieved through coordinated investment in five areas: I)observability and controllability II)efficient infrastructure and network planning III)operations and simulations for a more resilient grid IV)active system management and forecasting to support flexibility and demand response data exchange V)interaction between TSOs and DSOs. Subject to approval by the Member States, the Commission will support the creation of a Digital Twin with Horizon Europe. Implementation of a digital twin by a TSO The Finnish transmission system operator, Fingrid, implemented a digital twin to help manage its assets and operations, and plan its infrastructure investment. This digital solution allowed Fingrid to reduce data collection workload and focus on data analysis. The model provided by the digital twin allows Fingrid to plan investment up to 25 years in advance. The digital twin is used to develop several investment scenarios that take different policy frameworks into account. This enables Fingrid to save costs and use its time more efficiently. Fingrid is currently investing more than EUR 1 billion in developing clean power sources and integrating them into the grids. This investment is based on projects developed by the digital twin. Fingrid had already decided to digitalise the grid at an early stage. This allowed it to exploit the opportunities provided by the digital twin, because a smart grid is a prerequisite for an accurate digital grid model. Source: Digital Twin Fingrid | 2018 | Siemens Global: Digital Twin Fingrid | 2018 | Siemens Global 3.2Support the definition of common smart grid indicators In addition to the concrete cooperation initiative of the Digital Twin, it is essential that the regulatory framework fully supports innovative investments in the smartness of the grid. To that end, a structured interaction between national regulatory authorities (NRAs) and network operators in defining (common) network key performance indicators (in addition to tailored ones) to measure the smartness of the electricity network (and in the longer term the impact of such investments) is key to setting targets and monitoring developing trends, opportunities and challenges. The Commission will support and cooperate with the European Union Agency for the Cooperation of Energy Regulators (ACER) and the NRAs to define common smart grid indicators. If useful, objectives for these indicators may be set. These common smart grid indicators will be defined in the five areas listed above and will allow NRAs to monitor smart and digital investment in the electricity grid annually as of 2023, as required by Article 59.1(l) of the Electricity Market Directive. Such common indicators will also provide guidance on the implementation of that article. These common indicators will help to speed up investment in smart and digital electricity grids because they will ensure cooperation and the exchange of best practices between NRAs for defining efficient investment in digitalisation and innovation at a time when the need to invest in networks is high. The role of NRAs will at the same time ensure that investments are efficient and that the quality of service to grid users improves. Key performance indicators will also help network operators identify the most effective ways to invest in smartness and digitalisation. The common smart grid indicators should include a limited set of output indicators, supported by input indicators. ·Output indicators reflect the benefits/impacts of the smart and digital electricity grid for grid users. They therefore measure whether system operators fulfil their activities in an efficient manner. ·Input indicators, by contrast, reflect the level of readiness and uptake of specific digital solutions by system operators (SO), and help guide the transition progress by assessing whether SOs have sufficient tools/instruments to deliver on the output indicators.

Both actions are intrinsically linked and both require TSO-DSO cooperation in smartening the electricity grid. The Digital Twin of the grid provides a concrete collaboration framework for integrating the smart grid indicators, helping to monitor progress made in digitalising the grid. Smarter and more digitalised grids will generate more data as a basis for optimised and interactive grid management to promote flexibility, including smart charging and the integration of more renewables and greater energy efficiency. 4Details on actions to empower consumers 4.1Digital tools for energy communities and other collective action initiatives The Energy Communities Repository will help policy makers, regulators and local communities to better understand how to set up and support business models that require ICT and data-driven solutions (such as community electricity trading). This could increase the financial viability of energy community projects and incentivise convergent and consistent energy legislation across the EU. To the extent that these tools are activity-related, they could also help inform other types of collective action initiatives. Finally, the Energy Communities Repository could help identify and shortlist digital tools to provide ready-to-use building blocks for emerging energy communities, thus boosting the digital literacy of their members and their ability to become active and dynamic energy consumers. The Commission will also provide funding to support communities at the set-up stage and to support system integration projects through the LIFE Energy Communities Facility. 4.2 As mentioned above, P2P electricity trading would allow both individuals and companies (both self-producers and consumers) to gain more from their engagement in the energy system. This may in turn encourage private investment in renewable electricity-generation assets . It is also in keeping with the aspiration of more and more members of the public to contribute to the green transition from the bottom-up, by reducing their consumption, producing and using energy locally, and reducing their overall reliance on the electricity grid (thus helping to mitigate grid congestion and reduce network losses). Finally, by allowing local individuals to trade electricity locally (thereby increasing consumer participation in local energy markets and promoting investment in decentralised generation assets), P2P electricity trading could become the first emerging component of local energy markets. The development of this tool will be funded under the Horizon Europe programme through a dedicated call with the aim of creating a model project in terms of customer-centric design , community ownership, replicability, easy open-source access to deliverables and ease of maintenance of the resulting tools. This will be accompanied by a study to help: (I)identify and explore multiple business models that could be relevant for Energy Sharing and P2P trading; (II)define the requirements for ICT platforms that are relevant for the identified business models; (III)engage with ICT platform solution providers to identify the requirements and build an overview of the solutions currently available on the market for these business models; (IV)describe how these solutions would fulfil the requirements in force; (V)identify the legal, technical and operational prerequisites for a successful implementation.

The Commission will also, together with the Joint Research Centre (JRC) Living Lab, develop an experimentation platform to test simulated energy communities. This will incentivise consumers and other stakeholders to create, develop and support, new energy communities, join existing energy communities and/or improve their practices. It will also provide a testbed for innovative activities such as blockchain-based energy trading to optimise processes and operations, and will help identify potential legal, regulatory, fiscal and technical barriers. 4.3Support upskilling and reskilling of the workforce for the digitalisation of the energy value chain We will in the future need digitally empowered and capable members of the public, a digitally skilled workforce and digital experts. The twin green and digital transitions require new and emerging green and digital skills to be integrated into existing jobs and professionals to be enabled to acquire new and specialised skills so that they can adapt to the fast-changing data-driven service market. Innovative technology solutions rely on there being enough skilled workers and trained professionals to apply them on a wide scale in our daily lives. The European Green Deal made this very clear, acknowledging the urgent need for proactive upskilling and reskilling schemes at all levels. The results of the public consultation , have led the Commission to conclude that shortcomings in skills development and the lack of a properly trained workforce are the most significant barriers to the uptake of digital technologies. In the context of REPowerEU, such barriers can hamper the application of clean energy technologies. Clear responses are therefore needed in order to successfully close existing skills gaps and mismatches that hinder the growth of the sector. Revising vocational and educational training strategies, and changing the curricula in energy education are key ways of properly responding to the dynamic context of high renewable penetration and digitalisation of the energy sector, because these require specific knowledge and skills as well as new ways of using new technologies. Well-informed and qualified professionals will have a key role to play in encouraging and stimulating the development and implementation of digital tools for the benefit of consumers. Building on the 2020 Skills Agenda, Council recommendation on Ensuring a fair transition towards climate neutrality and the Blueprint Strategy for the Digitalisation of the Energy Value Chain (BSDE) , the Commission will address these issues by supporting the establishment of a large-scale partnership within the framework of the Pact for Skills. Key national, non-governmental and industrial stakeholders, system operators, academia and research institutions will cooperate in promoting concrete investment in reskilling and upskilling opportunities so that the EU’s workforce can adapt and prepare for the future digitalisation of energy-related jobs. Synergies and cooperation with other relevant sectorial alliances and large-scale partnerships will be identified and exploited. This action will complement the target for basic digital skills established by the European Pillar of Social Rights action plan and the targets of the Digital Decade. The Commission encourages Member States to boost skills by making full use of the European Social Fund+ and the Just Transition Fund. The European Climate Pact and the upcoming Erasmus+ Alliances for Innovation will also play a role in developing forward-looking skills and university-level partnerships for cooperation on skills. The Recovery and Resilience Facility (RRF) can also help promote local and regional upskilling and reskilling schemes. 4.4Dedicated structures supporting upskilling and reskilling for digitalisation of energy value chain Skills gaps vary depending on the industries, specialisations and demographics of each region. Local actors have a deep understanding of the challenges and needs faced by the local population and can ensure that local skills strategies address them all. In the context of the ‘Creating an “EU Digital Energy” platform to support innovation ecosystems’ action, the Large-Scale Partnership on Skills for the Digitalisation of the Energy Value Chain will support the creation of a common vision; promote the sharing of best practices, knowledge and skills throughous the value chain; and contribute to the regional roll-out of the sectorial alliance strategy within the European Digital Innovation Hubs (EDIHs) devoted to the energy sector. EDIHs will be structures dedicated to boosting digital energy skills, deploying strategies for creating demand for such skills and sharing best practices. 5Cybersecurity and resilience 5.1Context Cybersecurity is essential for the security and reliability of the increasingly digitalised energy system. All other sectors depend on energy-critical infrastructures. A cyber-attack that create an outage in a part of the energy system might trigger an immediate and far-reaching cascade consequences. For example, cloud infrastructures for hosting and processing data, transport (through the Vehicle to Grid and smart charging technologies) and building automation, are highly dependent on reliable energy systems.

In 2019, the Commission provided guidance to network operators and technology suppliers on the energy sector’s main cybersecurity challenges, notably: 1)real-time requirements 2)the cascade effect, 3)the combination of legacy and state-of-the-art technologies. There are a number of other key requirements and challenges in this area: 1.Clear and robust cybersecurity governance structures between public and private actors. This includes, for example, the TSOs, the DSOs, vendors, national regulatory bodies from different sectors and EU structures such as the Computer Security Incident Response Team (CSIRT) and the Cyber Crisis Liaison Organisation (CyCLONe) networks 2.Harmonised rules for assessing cybersecurity risks and security measures 3.Agreed procedures for collective responses to cybersecurity incidents 4.Low levels of capacity-capacity building and knowledge sharing in the Member States 5.Increasing digitalisation and connectivity of energy infrastructure. These make the new decentralised models of production and consumption possible. These models require additional exchanges of data for operations, maintenance and trading, creating data security risks. Different instruments are being developed to achieve these objectives. For example: 1)forthcoming Network Code on Cybersecurity of Cross-Border Electricity Flows stems from the Electricity Regulation and, will lay down sector-specific rules for cybersecurity of cross-border electricity flows, including rules on common minimum requirements, planning, monitoring, reporting and crisis management. Other energy sectors, such as gas or hydrogen, might require similar rules. 2)The EU funding programmes that will be managed through the European Competence Centre and the Network of Coordination Centres will contribute to cybersecurity capacity building. Some of those programmes aim to increase and enhance knowledge sharing between Member States. 3)While cybersecurity is essential, it should not hamper fair competition and market access to for new or competing products and services. To that end, the legislative proposal on the Cyber Resilience Act in 2022 will lay down harmonised rules for the placing on the market of products with digital elements in the Union and duty of care for the whole lifecycle of these products, as well as corresponding rules on market monitoring and surveillance. This should help to establish common rules while improving the security of products with digital elements. To address the challenges and implement the instruments mentioned above, the EU is developing an approach to strengthening the cybersecurity of energy systems. This will build on the EU cross-sectoral cybersecurity framework. At strategic policy level, the cybersecurity in the action plan is aligned with the Commission priority ‘A Europe fit for the Digital Age’ and the ‘EU Cybersecurity Strategy for the Digital Decade’ . At operational level, the Commission (particularly DG ENER) pays utmost attention to cooperation with the Member States and their cybersecurity bodies. Policy work in the area of cybersecurity for energy is carried out in close collaboration with other entities such as the European Network Information Security Agency (ENISA) and the Computer Emergency Response Team for the EU bodies and agencies (CERT-EU). Further collaboration will be sought with other bodies and organisations, such as the CSIRT Network, the Cyber Crisis Liaison Organisation Network (CyCLONE), the Joint Cybersecurity Unit, European Cybersecurity Competence Centre and the Network of National Coordination Centres.

In terms of policy instruments, the main legislative text for cybersecurity is the Directive on Security of Network and Information Systems concerning measures for a high common level of security of network and information systems across the Union (the NIS 1 Directive ). The Commission proposed to revise this Directive through, so called, the NIS2 Directive version and it responds to the increasing degree of digitalisation and connectivity in society. The Directive defines the energy sector (including electricity, district heating and cooling, oil, gas and hydrogen) as a sector of high criticality. Specific cybersecurity legislation in the energy sector will bring the sector into line with, and complement the revised Directive on Security of Network and Information Systems and the Risk Preparedness Regulation . Cybersecurity has become a more important requirement for resilient energy systems because of digitalisation. The cybersecurity attacks on the operational technologies (OTs) can have consequences that go beyond IT systems, such damages to the wider energy infrastructure. 5.2Evidence, projects and best practices Digitalisation makes new energy systems possible and cybersecurity is a prerequisite for digitalisation. The Commission’s public consultation on the digitalisation of the energy system action plan revealed that a majority of stakeholders see high and medium risks related to digital components and services, on both at the demand and supply sides. There is, however, no clear consensus as to who is best placed to manage these risks. Examples of real cases of cyberattacks that show the consequences and impacts: ·Recent attacks to the satellite communication networks used for monitoring of windfarms in Northern Europe. More than 5000 wind turbines lost connection for remote management. ·The Colonial pipeline ransomware attack in May 2021. It halted operations for several days due to unavailability of their IT support systems. Several Federal States had shortage of gasoline and other oil and gas products impacting hundreds of thousands of citizens and companies. ·The Solar Winds compromise of its software supply chain embedding malicious code in its Orion software and replicating it in the end customer’s installations. ·The power grid attack in Ukraine in 2015 that resulted in power outages lasting several hours. In addition to the public consultation, the Commission has also reviewed a number of projects co-funded by the Horizon 2020 Framework Programme in the field of cybersecurity (see the Annex for an overview). In the reviewed sample of projects, the consortia and project coordinators perceive a strong role for cybersecurity and physical security for their infrastructure. A number of the main lessons have been learned from projects: 1)Lack of interoperability of ICT protocols and solutions: different communication protocols impeding a common cybersecurity framework in the energy sector. 2)There are number of organisational barriers (e.g. perceived insufficient cooperation between the stakeholders involved in regulation, operations, research, production, testing and implementation of cybersecurity solutions). 3)The roles and responsibilities of the parties involved in the prevention, detection and resolution of cybersecurity incidents should be better defined and implemented so that they can effectively support crisis operations. 4)Research and innovation of digital products should include the concept of Cybersecurity by design. 5)Certification schemes for products and services are still lacking. 6)Sector specific information sharing networks are proving very useful for to timely reaction to security threats.. This should also be the case for energy equipment manufacturers and technology vendors. 7)The so-called smart technology makes new services and products possible but brings new cybersecurity risks. For example, secure gateways for smart meters, provide services in addition to measuring electricity consumption. They enable data exchanges that will most probably allow for the creation of new services. Similarly, to other sectors such as telecommunications, these new services and applications will need to be very reliable. The upcoming policy work should address these and other challenges. Close cooperation between regulatory authorities, public administrations, the private sector and the general public will be necessary in order to ensure that on one side the energy system remains reliable in the new digital age and that it contributes to the wellbeing of the population.

6 Energy consumption of the ICT sector 6.1Context This action plan illustrates the potentially very significant economic, environmental and social benefits of digitalisation in the energy sector. Many other sectors and use cases, ranging from teleworking and e-learning platforms to digital tools for the monitoring of climate change, show that digitalisation is very useful from many different perspectives. These benefits are mainly thought of in socio-economic terms, but are also of an environmental nature: in 2022, the European Commission launched the European Green Digital Coalition (EGDC) which currently includes 34 signatories committed to working together with experts and academia on science-based methods to measure the net environmental impact of digital solutions across priority sectors, including the energy and power sectors. The Commission has also financed a European Parliament Pilot Project to assist with this. By the end of 2022, 18 real-life case studies will be examined to help validate and refine the iterative development of the net environmental impact methodology across sectors. The first calculations of environmental effects of green digital solutions for energy systems, as well as draft guidelines for deployment of digitalisation with enabling effects, will be available within 2023. The many beneficial use cases unlocked by digitalisation should not, however, obscure the fact that the ICT sector also requires energy to operate and is not climate-neutral. Indeed, the amount of energy consumed by the ICT sector is constantly increasing as the need for and use of digital tools, internet traffic and the number of connected devices rise. This immediately raises the question of the energy consumption of the ICT sector, its energy efficiency and its climate impact. This section aims to provide a framework and show concrete ways to address increasing energy consumption of the ICT sector. Firstly, it should be stressed that digitalisation affects all areas of society (households, private companies, public administrations, infrastructures, etc.) as well as almost all sectors (the most frequently mentioned for comparison during the Commission’s open public consultation were financial services, mobility, building, healthcare and advertising). This transformation has proceeded very quickly in recent decades, requiring significant corporate investment in communication networks and computation power, as well as household investment in telecommunication equipment, computers and other electronic devices. This investment has gone hand-in-hand with a very steep increase in global internet traffic. It is estimated that internet traffic increased 12-fold between 2010 and 2020 (with an average annual growth rate of 30%). It is further expected that the internet traffic will continue to increase at a very fast rate of over 40% per year in coming years. This naturally has consequences in terms of energy consumption and the use of natural resources. Some remarkable energy-efficiency g