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
Date: 2022-10-18
Institutions: Directorate-General for Energy, European Commission
Subjects: EU action, EU energy policy, digital transformation, electrical energy, energy consumption, energy grid, energy transition, information security, innovation, investment, smart technology

EN 

  EN 

   EUROPEAN COMMISSION  Strasbourg, 18.10.2022  COM(2022) 552 final  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 {SWD(2022) 341 final}  
 
 
1. 

TOWARDS A DIGITALISED, GREEN AND RESILIENT ENERGY SYSTEM 

To  end  the  EU’s  dependence  on  Russian  fossil  fuels,  tackle  the  climate  crisis  and  ensure 
affordable access to energy for all, the European Green Deal and REPowerEU require a deep 
digital and sustainable transformation of our energy system. For example, we need to install 
solar photovoltaic (PV) panels on roofs of all commercial and public buildings by 2027 and on 
all new residential buildings by 20291, install 10 million heat pumps over the next 5 years2 and 
replace 30 million cars with zero-emission vehicles on the road by 2030.3 Reducing greenhouse 
gas emissions by 55% and reaching a share of 45% renewables in 2030 can only happen if the 
energy system is ready for it.  

To achieve these objectives, Europe needs to build an energy system that is much smarter and 
more  interactive  than  it  is  today.  Energy  and  resource  efficiency,  decarbonisation, 
electrification,  sector  integration  and  decentralisation  of  the  energy  system  all  require  a 
tremendous effort in digitalisation. Digitalisation of the energy system is a policy priority and 
one  where  the  European  Green  Deal  and  the  Digital  Decade  Policy  Programme  2030  for 
Europe go hand-in-hand as  a twin  transition. Globally, the EU promotes the twin  transition 
through the Global Gateway Strategy4. 

About EUR 584 billion of investment in the electricity grid will be required, between 2020 and 
2030, in particular in the distribution grid. A substantial part of these investments will need to 
be in digitalisation. The International Energy Agency (IEA) estimated that, globally, demand-
side responses could avoid USD 270 billion of investments in new electricity infrastructure5. 
Another  study  estimates  that  around  EUR  170  billion  investments  in  digitalisation  will  be 
needed out of a total of around EUR 400 billion6 investments in the distribution grid over the 
period 2020-2030. Making the smartest use possible of our energy grid will also ensure the 
best use of our territory when ramping up renewables investments. 

Investing in digital technologies such as smart IoT devices and meters, 5G and 6G connectivity, 
a pan-European energy data space powered by Cloud-edge computing servers, and digital twins 
of  the  energy  system  facilitates  the  clean  energy  transition,  while  bringing  benefits  to  our 
everyday life. For example, they can help us visualise our real time energy consumption and 
receive  tailored  advice  on  how  to  reduce  it.  Digital  tools  can  automatically  control  room 
temperatures, charge electric cars, and manage appliances in order to benefit from the lowest 
energy prices, while preserving a comfortable and healthy indoor environment. With digital 
tools, public authorities can also better map, monitor, and address energy poverty, while the 
energy sector can better optimise its operations and prioritise the use of renewables. 

Digitalisation is already underway in the energy sector, as it is in many other sectors: electric 
vehicles, PV installations, heat pumps and many other new devices are equipped with smart 
technologies that generate data and enable remote control. The number of active IoT devices 

1   EU Solar Energy Strategy COM(2022)221 
2   REPowerEU Communication COM(2022)230 final  
3   Sustainable and Smart Mobility Strategy COM(2020)789 final 
4   The Global Gateway JOIN(2021) 30 final 

5  

International 
https://iea.blob.core.windows.net/assets/b1e6600c-4e40-4d9c-809d-
1d1724c763d5/DigitalizationandEnergy3.pdf  

Digitalization 

Agency, 

Energy 

and 

Energy, 

2017 

- 

6   Figure  for  the  EU+UK.  Source:  Connecting  the  dots:  Distribution  grid  investment  to  power  the  energy 

transition - Eurelectric – Powering People  

1 

 
 
                                                 
in  the  world  is  expected  to  grow  rapidly  and  surpass  25.4  billion  in  20307.  51%  of  all 
households and SMEs in the EU are equipped with smart electricity meters8. EU digital and 
energy  policies  already  guide  digitalisation  of  energy  as  issues  like  data  interoperability, 
security of supply  and cybersecurity, privacy and consumer protection cannot  be left  to  the 
market alone and its proper implementation is key.  

But  more  is  needed  if  we  want  to  fully  exploit  the  potential  of  digital  technologies  and 
accelerate the  digitalisation of our energy  system while  addressing the challenges it brings, 
respecting privacy and data protection, and ensuring a fair transition that leaves no one behind. 
Sharing  data  across  the  energy  value  chain,  and  linking  these  data  with  weather  models, 
mobility  patterns,  financial  services  and  geographic  location  systems  through  ever-more 
powerful  computing  capacity  will  make  innovative  services  at  new  levels  of  precision  and 
adequacy possible and contribute to growth and jobs in the EU.  

It  will  enable  financial  institutions  to  unlock  private  investments  that  support  the  energy 
transition  and  will  enable  consumers  to  actively  manage  their  energy  consumption  or 
generation and benefit from direct participation in the market. This requires a strategic vision 
and concrete actions in the following areas: 

  promote  connectivity,  interoperability  and  seamless  exchange  of  data  between 

 

different actors while respecting privacy and data protection;  
foster more and better coordinated investments in the electricity grid as the enabler 
for a smarter and more resilient energy system and a EU-wide coordinated plan for the 
accelerated deployment of the necessary digital solutions; 

  empower consumers, including the most vulnerable or with low digital skills, to benefit 
from  new  ways  to  engage  in  the  energy  transition  or  from  better  services  based  on 
digital innovations, whilst being protected against high energy prices online as they are 
currently off-line;  

  enhance cyber-security – which requires a continuous effort and investment; 
  address energy consumption of digital technologies and promote greater efficiency 

and circularity;  

  design  an  effective  governance,  through  structural  and  joint  planning  by  public 
authorities in  cooperation with  the private sector, learning  of all actors involved, as 
well as continuous support for R&I.  

2.  TOWARDS  AN  EU  FRAMEWORK  FOR  SHARING  DATA  TO  SUPPORT  INNOVATIVE  ENERGY 
SERVICES  

The key enabler for a digitalised energy system is the availability of, access to, and sharing of 
energy-related data based on seamless and secure data transfers among trusted parties. Better 
coordinating  these  exchanges  and  building  an  EU  coordination  framework  to  strengthen 
interoperability among different systems and technical solutions will make it possible for more 
innovative services to enter the market. Generally applicable principles will also need to be 

7   https://www.cbi.eu/market-information/outsourcing-itobpo/industrial-internet-things/market-potential, 

7 

June 2022 

8   Estimate based on Smart Metering Benchmarking Report (March 2020), European Commission, Directorate-
General for Energy, Alaton, C., Tounquet, F., Benchmarking smart metering deployment in the EU-28 : final 
report, Publications Office, https://data.europa.eu/doi/10.2833/492070. 

2 

 
 
 
 
                                                 
strictly upheld, including those on EU data sovereignty, cybersecurity, data privacy, consumer 
acceptance and interoperability.  

That is why Europe needs a common European energy data space9, and will need to start 
its deployment no later than 2024. The deployment of an appropriate data sharing framework 
for energy could facilitate the participation on the wholesale markets of more than 580 GW of 
flexible energy resources that make full use of digital solutions by 205010. It is estimated that 
this would cover over 90% of the overall flexibility needs in the EU electricity grids. Enabling 
the  smart  and  bidirectional  charging  of  electric  vehicles  (EVs),  the  participation  of  virtual 
power plants in the energy markets and exploiting the potential of energy communities, smart 
buildings  and  smart  heating  using  heat  pumps  could  contribute  the  largest  share  of  that 
flexibility. Moreover, car batteries can be used to store surplus energy and dispatch it when 
needed,  by  tracking  when  the  vehicle  is  in  its  garage,  anticipating  periods  of  non-use,  and 
monitoring how much spare capacity can be made available. 

The existing European regulatory framework for energy already prepared the ground, and the 
Fit-for-55 proposals put forward specific provisions on data exchanges. More generally, the 
proposed Data Act11 lays down new rules on who can use and access data generated in the EU 
across all economic sector and clarifies users’ right to freely access and use the data generated 
by their products, including the right to share these data with third parties. Additionally, the 
Data Governance Act12 aims to foster the availability of data by strengthening the data sharing 
mechanisms and increasing trust in data intermediaries. 

Implementing  the  above  legislation  and  making  data  exchanges  happen  effectively  and 
efficiently will require a coordinated approach guided by the public authorities. The framework 
for  data  sharing  is  not  just  about  standardisation,  it  requires  a  complex  set  of  legal  and 
operational  arrangements,  as  well  as  technical  requirements  and  guidelines.  Strong 
coordination  is  needed  to  ensure  coherent  and  smooth  processes  at  European  level,  which 
complement, coordinate, and add value to the national initiatives. Therefore, the aim of this 
action area is to establish a common European energy data space13 and to ensure a solid 
governance  for  it,  in  the  form  of  a  coordinated  European  framework  for  sharing  and 
using the energy data. A preparatory phase will be completed by 2024, with the deployment 
starting immediately after. The indicative timetable and the steps needed towards this goal are 
presented below. 

2.1 

Strategic EU coordination 

9   The European Data Strategy (COM(2020) 66 final) announced the creation of Common European data spaces 

in nine sectors, including energy. 

10   ‘Digitalisation  of  energy  flexibility’,  report  by  the  Energy  Transition  Expertise  Centre  (EnTEC), 
https://op.europa.eu/en/publication-detail/-/publication/c230dd32-a5a2-11ec-83e1-01aa75ed71a1/language-
en.  

11   COM(2022) 68 final. 
12   COM(2020) 767 final.  
13   A common European data space brings together relevant data infrastructures and governance frameworks, in 
order to facilitate data pooling and sharing. It will include the deployment of data sharing means and services, 
data governance structures, and will improve the availability, quality and interoperability of data. More details 
are provided in the Commission Staff Working Document on common European data spaces (SWD(2022) 
45 final). 

3 

 
 
 
                                                 
To further promote the digitalisation of the energy sector, the Commission will formally re-
establish the existing Smart Grids Task Force (SGTF)14. The group will be renamed the 
‘Smart Energy Expert Group’ and will have greater responsibilities and involve all Member 
States and additional relevant stakeholders. 

Within this Smart Energy Expert Group, the Commission will set up, by March 2023 at the 
latest,  the  ‘Data  for  Energy’  (D4E)  working  group.  This  group  will  bring  together  the 
Commission,  the  Member  States  and  the  relevant  public  and  private  stakeholders  for 
contributing  to  building  the  European  framework  for  sharing  energy-related  data.  D4E  will 
help strengthen the coordination at EU level on data exchanges for the energy sector, defining 
the  driving  principles  and  ensuring  consistency  across  different  data-sharing  priorities  and 
initiatives.  Furthermore,  D4E  will  support  the  Commission  in  developing  and  rolling  out  a 
common European data space for energy. Thus, the governance and the main building blocks 
of the upcoming data space will be designed and managed in partnership.  

D4E will focus its work on developing a portfolio of European high-level use cases15 for 
data exchanges in energy that are key to deliver on the objectives of the Green Deal and the 
Digital  Decade.  The  high-level  use  cases  that  will  be  addressed  from  the  outset  include: 
flexibility  services  for  the  energy  markets  and  grids;  smart  and  bi-directional  charging  of 
electric  vehicles;  and  smart  and  energy-efficient  buildings,  including  boosting  private  and 
public investments and harnessing the proposed solar rooftop initiative. Additional high-level 
use cases can be considered later in the process, whenever needed.  

D4E  will  further  develop  those  priority  areas  by  producing  the  implementing  details  and 
deliverables needed as building blocks for the future common European energy data space, and 
will propose them to the Commission for endorsement and to act upon. In doing so, D4E will 
capitalise  on  other  initiatives  and  work  streams  that  are  being  undertaken  at  the  European 
level16. In particular, for smart and bi-directional EV charging, the Commission will define, by 
2023, a joint work programme for D4E and the Sustainable Transport Forum17 with the aim to 
ensure alignment between the energy and mobility data spaces, supporting system integration 
and providing cross-sectoral services. Additionally, D4E will closely cooperate with the Expert 

14   The Smart Grids Task Force is an informal expert group that advises the Commission on policy and regulatory 
frameworks  for  developing  and  rolling  out  smart  grids  (https://ec.europa.eu/transparency/expert-groups-
register/screen/expert-groups/consult?do=groupDetail.groupDetail&groupID=2892).  

15   The concept of high-level use cases refers to the main priority areas to be addressed. Each high-level use case 
will, in practice, encompass several use cases that will describe in more details the relevant actors, processes 
and data flows for each specific business and operational arrangement. 

the 

16   These include the current  work of  the Smart Grids Task Force, the ongoing  work for a Network code  on 
demand 
flexibility 
side 
(https://www.acer.europa.eu/sites/default/files/documents/Media/News/Documents/2022%2006%2001%20
FG%20Request%20to%20ACER_final.pdf), the work related to the Commission proposal for a Regulation 
(https://eur-
on 
lex.europa.eu/resource.html?uri=cellar:dbb134db-e575-11eb-a1a5-
01aa75ed71a1.0001.02/DOC_1&format=PDF) and the results obtained by the Sustainable Transport Forum, 
as  well  as  the  activity  and  products  of  the  Expert  group  on  European  financial  data  space 
(https://ec.europa.eu/transparency/expert-groups-register/screen/expert-
groups/consult?lang=en&groupID=3763) and the Energy Efficiency Financial Institutions Group (EEFIG) 
(https://eefig.ec.europa.eu/index_en).  

infrastructure 

deployment 

alternative 

fuels 

of 

17   In particular the working group ‘Common Data Approach for Electromobility and other Alternative Fuels 
(STF on Data)’ that focuses on mapping the policy and technical elements needed to put in place an open 
data  ecosystem  for  electromobility  (https://transport.ec.europa.eu/transport-themes/clean-transport-urban-
transport/sustainable-transport-forum-stf_en).  

4 

 
 
                                                 
Group on the European financial data space for developing use cases of common interest to 
channel more private financial resources to the energy transition.  

D4E will also help the European Commission to implement the governance of the common 
European data space for energy. This will be done in close coordination with the European 
Data Innovation Board18 and the emerging governances of the other European data spaces, to 
ensure consistent approaches and embed interoperable processes from the outset. Seamless data 
flows  across  the  energy  data  space,  as  well  as  between  energy  and  other  data  spaces19,  are 
instrumental to create value added along and across European value chains. Furthermore, the 
Data Spaces Support Centre20 will provide guidance to the upcoming sectoral data spaces, and 
support  their  creation  by  making  available  relevant  technologies,  processes,  and  tools.  The 
guiding principles  and recommendations  of the European  Interoperability  Framework21 will 
inform the processes of ensuring cross-sectoral interoperability and in line with the upcoming 
Commission proposal for a reinforced interoperability cooperation. 

2.2 

Immediate results and building blocks to support the process 

D4E will be set up in parallel with several other initiatives that will mutually reinforce each 
other. For all initiatives, it is important that consumers have a smart electricity meter installed 
in  their  home.  This  is  still  not  the  case  in  many  Member  States22  and  makes  it  even  more 
pressing to step up efforts to more widely deploy smart metering. The Commission urgently 
calls on those Member States who have not yet achieved full rollout of smart meters to speed 
up their efforts and increase their national objectives with regard to this rollout, in particular 
while  updating  their  National  Energy  and  Climate  Plans.  Where  a  cost-benefit  analysis 
concluded against the rollout of smart meters, the Commission calls on Member States to revisit 
and re-run these analyses, in light of the Green Deal and REPowerEU. 

When advising the Commission, D4E will factor in the activities that support enhanced data 
exchanges. These initiatives include:  

  Adoption  by  the  Commission  of  an  implementing  act  on  interoperability 
requirements, and non-discriminatory and transparent procedures for access to 
metering and consumption data (as provided for by the Electricity Directive, Article 
24);  
  Preparing 

interoperability  requirements,  and  non-
discriminatory  and  transparent  procedures  for  access  to  data  required  for 
demand  response  and  customer  switching  (as  provided  for  by  the  Electricity 
Directive, Article 24);  

implementing  acts  on 

18   Expert group that will be established according to the provisions of the proposed Data Governance Act. 
19   Such as the data spaces dedicated to mobility, construction and buildings, and the financial sector.  
20   The  Data  Spaces  Support  Centre  is  being  set  up  with  the  support  of  the  Digital  Europe  Programme 
(https://ec.europa.eu/info/funding-tenders/opportunities/portal/screen/opportunities/topic-details/digital-
2021-cloud-ai-01-suppcentre).  

21   https://joinup.ec.europa.eu/collection/nifo-national-interoperability-framework-observatory/3-

interoperability-layers.  

22    At the end of 2020, in 11 Member States the installation rate of electricity smart meters to householders had 
reached more than 80%; Denmark, Estonia, Spain, Finland, Italy, and Sweden recorded a 98% rollout rate or 
higher, followed by Luxembourg, Malta, the Netherlands, France and Slovenia, with rollout rates between 
83% and 93%. Smart metering rollout plans and actual rollout rates diverge widely, suggesting that a number 
of  EU  consumers  will  not  have  access  to  smart  meters  in  the  near  future  (source:  ACER/CEER  Market 
Monitoring Report 2021). 

5 

 
 
                                                 
  Promoting a code of conduct for energy-smart appliances to enable interoperability 

and boost their participation in demand response schemes23.   

The EU Research and Innovation, and Digitalisation programmes will continue to play a key 
role. Thus, the Commission intends to support, through the Digital Europe Programme24, the 
deployment of a common European energy data space. This will build on the demonstrations 
and results that will be developed by a set of projects funded by Horizon Europe25, as well as 
on the use cases that will be developed by D4E. Additionally, the Horizon Europe programme 
supports key research and innovation projects and initiatives26 that provide valuable inputs on 
best  practices  and  recommendations,  including  concrete  deliverables  such  as  tools  and 
methodologies. These inputs will, on the one hand, enhance the interoperability of the solutions 
proposed by Horizon Europe projects and, on the other hand, could be further scaled up and 
used  to  develop  the  high-level  use  cases  and  bridge  the  identified  market  gaps  towards  the 
deployment of a fully-fledged data space. By doing so, the Commission will guide the work of 
D4E with the results brought forward by projects and programmes that pilot energy data spaces 
and common models for both data exchanges and interoperability.  

Europe is already investing in next generation energy systems and smart grids by deploying 
emerging  digital  technologies,  including  digital  twins,  decentralised  intelligence,  and  edge 
computing. These are just a few examples of the smart use of data available within digitalised 
energy systems, and illustrates the importance of data sharing and energy data spaces. Large 
amounts  of  data  collected  in  smart  cities  and  communities  in  local  data  platforms  (through 
smart devices connected to the Internet of Things, smartphone apps, social media, etc.) allow 
for  the  creation  of  many  services  for  energy  and  infrastructure  optimisation,  building  and 
facility  management,  scenario  planning  and  disaster  management  in  a  district  or  city. 
Numerous  examples  exist  across  the  Union  of  how  digitalisation  is  applied  locally27.  The 
Commission  encourages  Member  States,  regions,  cities,  and  industry  to  exchange  best 
practices and coordinate on wider deployment and on standardisation to accelerate the green 
transition and reinforce the European energy ecosystem.  

3. PROMOTING INVESTMENTS IN DIGITAL ELECTRICITY INFRASTRUCTURE  

Smart  and  digital  energy  infrastructure  is  a  key  requirement  for  all  the  high-level  use-case 
priorities. The electricity grid needs to interact with many actors or devices based on a detailed 
level of observability, and hence availability of data, to enable flexibility, smart charging and 
smart buildings. The EU’s electricity network has become increasingly digitalised in the last 
decade,  but  the  speed  of  transformation  needs  to  increase  significantly.  Coordination  and 
cooperation will help to ensure the best value for money in driving change across the EU and 

23   This will facilitate the aggregation of flexibility coming from smart assets in households and companies. For 
more details see: https://ses.jrc.ec.europa.eu/development-of-policy-proposals-for-energy-smart-appliances.  
24   This includes proposed support for the deployment of a common European energy data space with a budget 
of EUR 8 million, and support by and cooperation with the Data Space Support Centre for interoperability 
across data spaces (e.g. mobility, smart communities).  

25   The Horizon Europe 2021 Work Programme supports 5 projects with a budget of EUR 40 million that aim to 
energy 

establish 
(https://ec.europa.eu/info/funding-tenders/opportunities/portal/screen/opportunities/topic-details/horizon-
cl5-2021-d3-01-01). 

common  European 

deploying 

ground 

space 

data 

the 

for 

for 

a 

26   Such as projects that are cooperating under the Bridge initiative to provide policy advice with regard to smart 

grids: (https://bridge-smart-grid-storage-systems-digital-projects.ec.europa.eu/).  
27   See examples in the Staff Working Document accompanying this Communication.  

6 

 
 
 
 
                                                 
contributing to an efficient digitalisation of the electricity grid. As stated above, to achieve the 
ambitious targets of both the “Fit for 55” legislative package and the REPowerEU plan, EUR 
584  billion  of  investment  in  the  electricity  grid  will  be  required,  between  2020  and  2030. 
Estimates are that around EUR 170 billion investments in digitalisation will be needed out of 
a total of around EUR 400 billion investments in the distribution grid over the period 2020-
2030.  

Against  this  background,  the  Commission  announces  today  that  it  will  support  the  EU 
transmission system operators (TSOs) and distribution system operators (DSOs) to create 
a digital twin of the European electricity grid: a sophisticated virtual model of the European 
electricity grid. The aim of the digital twin is to enhance the efficiency and smartness of the 
grid as a way to make not only the networks, but the energy system as a whole, more intelligent. 
The creation of a digital twin will be achieved through coordinated investments 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; and (v) data exchange between TSOs 
and DSOs. The digital twin will not be created in one go but will be a continuous investment 
and innovation  effort  for  years to  come. Throughout  this process,  synergies with  upcoming 
initiatives  on  virtual  worlds,  such  as  the  metaverse,  will  be  ensured.  As  a  first  step,  the 
European Network of Transmission System Operators for Electricity (ENTSO-E) and the EU 
DSO Entity will sign a Declaration of Intent to kick-start the development of a digital twin of 
the  EU-wide  electricity  grid  with  a  comprehensive  consultation  of  grid  users  and  other 
stakeholders on concrete deliverables. The Commission intends to support ENTSO-E and the 
EU DSO Entity as well as concrete investments by system operators through various means 
including Horizon Europe.  

Fostering investments in smart energy grids requires a comprehensive framework, but many 
Member States’ regulations do neither appear to incentivise digitalisation nor innovation.28 To 
foster investment in the smartness of the European electricity grid, and in the digital twin in 
particular, a coordinated approach is also needed that helps national regulators to determine 
what  constitutes  efficient  investment  in  digitalisation  and  to  provide  incentives  to  system 
operators. Therefore, the Commission will aim to ensure that by 2023 a regulatory framework 
that  is  fit  for  purpose  to  attract  and  guide  such  investment  is  in  place.  In  particular,  the 
Commission  will  support  the  European  Union  Agency  for  the  Cooperation  of  Energy 
Regulators  (ACER)  and  the  national  regulatory  authorities  (NRAs)  in  their  work  to 
define common smart grid indicators, as well as objectives for these indicators, so NRAs 
can monitor smart and digital investments in the electricity grid annually as of 202329 and 
measure progress towards the creation of the digital twin30.  

These actions, and the digitalisation of energy infrastructure more generally, have and will be 
supported through various instruments at EU level. The revised TEN-E Regulation provides 
for greater opportunities to support cross border smart electricity grid. It updated the definition 
of smart electricity grids and its related category for cross-border smart electricity grid PCIs as 
well  as  simplified  the  selection  criteria  and  the  role  of  project  promoters.  CEF  Digital  will 

28   Position on incentivising smart investments to improve the efficient use of electricity transmission assets, 

ACER, November 2021. 

29   The common indicators will also provide guidance on the transposition of Article 59.1(l) of the Electricity 

Directive. 

30   As both actions will happen in parallel and common smart grid indicators will be defined in the same 5 areas 

as those for coordinated investments to create the digital twin. 

7 

 
 
 
 
                                                 
develop  concepts  and  carry  out  feasibility  studies,  potentially  leading  to  implementation 
projects,  for  pan-European  Operational  Digital  Platforms.  Supporting  the  European  cyber-
secure  digital  twin  of  the  electricity  grid,  these  shall  provide  digital  technologies  and 
connectivity for retrofitting the existing energy and transport infrastructures with the required 
cross-border digital infrastructure. 

In addition, digitalisation of national and regional administrative services can help to streamline 
permit processes for grid development31 by making it possible to communicate online and by 
supporting the activities of the permitting national competent authorities and single points of 
contact32. The Commission will open the technical support instruments for this goal. Member 
States  can  request,  via  their  coordinating  authorities,  assistance  from  the  technical  support 
instruments.33  

4. 

BENEFITS FOR CONSUMERS: NEW SERVICES, SKILLS AND EMPOWERMENT 

Consumers are front and centre in  our efforts to  digitalise the energy system.  Digitalisation 
brings benefits  to  households and SMEs in  the form of  innovative data-driven services  that 
enable them to, for example, better manage their bills, know their energy consumption in real 
time, share electricity they generated themselves with their neighbours or sell it back to the 
market, or save energy (and money) which is one of the cheapest, safest, and cleanest ways to 
address  high  prices  and  reduce  our  reliance  on  fossil-fuel  imports  from  Russia.  Digital 
inclusion  should  ensure  that  also  the  most  vulnerable  citizens,  those  with  low  incomes  and 
living in remote regions have affordable access to new digital technologies and tools, and are 
enabled to benefit from the digitalisation of the energy system.  

Digital information about the energy consumption of appliances (through the European Product 
Registry for Energy Labelling34) or in the home (through smart meters) can help consumers in 
their efforts to  reduce energy use, provided that such digital  tools are made available to  all 
consumers at an affordable price. Sustainable design of digital devices and clear information 
about  their  environmental  footprint,  repairability  and  recyclability  can  help  to  reduce  raw 
material use and foster transition towards circularity. But interoperability is key. For example, 
the  first  results  of  the  DRIMPAC  project35  showed  that  making  it  easy  for  small  energy 
consumers to participate in demand response through a unified interoperability framework can 
lower  their  energy  bills  by  20%,  driven  among  other  things  by  a  15%  reduction  in  energy 
consumption. 

4.1   A legal framework that empowers and protects consumers  

32   For example, via the creation of electronic application portals and common repositories of permitting-related 
relevant data for energy infrastructure and renewable projects, one-stop shops for project developers or by 
increasing  transparency  on  the  availability  of  grid  capacities  to  uptake  additional  renewable  projects  in 
specific local areas. 

33   https://ec.europa.eu/info/funding-tenders/find-funding/eu-funding-programmes/technical-support-

instrument/technical-support-instrument-tsi_en  

34   https://ec.europa.eu/info/energy-climate-change-environment/standards-tools-and-labels/products-labelling-

rules-and-requirements/energy-label-and-ecodesign/product-database_en  

35   Unified  Demand  Response  Interoperability  framework  enabling  Market  Participation  of  Active  energy 
Consumers. For  more information see: CORDIS Results Pack on digitalization of the  energy system  –  A 
thematic collection of innovative EU-funded research results. 

8 

 
 
 
                                                 
 
It  is  essential  to  ensure  that  digitalisation  does  not  undermine  the  framework  of  consumer 
protection already established in the internal market in electricity. Protections that exist off-
line will continue to exist online, that is to say in the digital age. This includes rights to accurate 
billing and clear contractual conditions that are well known in advance. Equally, the potential 
for  Member  States  to  establish  regulated  prices,  notably  for  vulnerable  customers  and  the 
energy poor, should not be negatively affected by digitalisation. 

The EU legal framework lays down the rights of consumers, but implementation is slow. This 
is not just a matter of detailed market rules36, interoperability or data exchange. Consumers 
also need to be able to retain control over who can access their data. Under the proposed Data 
Act,37 data sharing requires consent from the consumer for third-party access to its data. This 
is  key  to  ensuring  consumer’s  trust,  choice,  and  privacy,  in  line  with  the  principles  and 
objectives set forth in the proposed European Declaration on Digital Rights and Principles.38 

Consumer protection needs to be adequately ensured in light of the digitalisation of the energy 
sector. This is particularly relevant with regards to data-driven commercial practices that could 
exploit the behavioural biases of consumers or otherwise prevent them from making informed 
choices.  The  Electricity  Directive  addresses  the  issue  of  consumers’  rights  in  relation  to 
bundled products or services. General EU consumer protection legislation, such as the Unfair 
Commercial  Practices  Directive39,  Consumer  Rights  Directive40  and  Unfair  Contract  Terms 
Directive,41  aims  to  ensure  that  consumers  have  access  to  clear  information  and  are  not 
subjected to misleading or aggressive commercial practices online or offline. In order to ensure 
that  the  existing  legal  framework  remains  fit  for  purpose,  the  Commission  has  launched  a 
Fitness Check of EU consumer law on digital fairness. This evaluation will examine whether 
the  existing  rules  are  adequately  tackling  issues  that  are  also  relevant  in  a  more  digitalised 
energy  sector,  such  as  consumer  vulnerabilities  in  the  digital  environment,  manipulation  of 
choice, difficulties with contract cancellations, etc. 

4.2 

Digital tools designed for and with consumers 

In 2021 only 54% of  the people had basic digital  skills42 but in  a digitalised energy market 
many more will need these skills. This will help them to make informed choices and ensure 
that they do not miss out on opportunities to become more competitive, or to save energy costs. 
For  example,  mastering  digital  skills  will  help  SMEs  and  households  to  understand  how  to 
engage in demand-response, how to optimise their own use of electricity produced on-site, or 
what is entailed by charging an electric vehicle.   

Not all consumers are able or interested to participate in the energy transition in the same way 
or to the same degree of involvement. It is therefore important that nobody is left behind in the 
digital  transition  and  therefore  create  consumer-focused  digital  tools  designed  to  meet  the 
needs, skills, conditions, habits and expectations of different categories of market participants. 

36   In particular, the ongoing preparatory work for a possible network code on demand-side flexibility. 
37   COM(2022) 68 final 
38   COM(2022) 28 final  
39   Directive 2005/29/EC concerning unfair business-to-consumer commercial practices in the internal market. 
40   Directive 2011/83/EU on consumer rights. 
41   Council Directive 93/13/EEC on unfair terms in consumer contracts.  
42   Digital  and  Economic  Index  (DESI)  2022  results,  p.  14  of  European  Analysis  2022  retrieved  from 

https://digital-strategy.ec.europa.eu/en/policies/desi 

9 

 
 
                                                 
The tools created should reflect the reality of demographic change with increasing numbers of 
older consumers who need to be specifically supported in the digital transition. 

The Commission has recently launched, under the Smart Grids Task Force, a new activity to 
further investigate the potential engagement of consumers with digital tools and technologies 
and recommend actions to reinforce the role of consumers’ flexibility and empowerment in the 
energy market. To support this new activity, the European Commission will ensure that key 
R&I projects work together to identify, by mid-2023, strategies to engage consumers in 
the design and use of accessible and affordable digital tools and to identify indicators to 
assess engagement over time. 

Working with Member States, the European Commission will also develop by  2023 a common 
reference  framework  including  an  open  source  reference  implementation  for  a  consumer 
application that allows them to make voluntary reductions in energy consumption and helps 
them in reducing their energy costs. This will lead to a standardised reference application that 
will be developed in close collaboration with energy providers and will draw from applications 
and services already available in the market.  

On this basis, Member States will be encouraged to make available such apps to provide the 
consumer with more customised energy savings tips and advice based on generic information 
about different appliances as well as locally available consumption and weather data. These 
apps could also provide them with all the information necessary to navigate the energy crises 
(e.g. financial support, advice services or support in case of disputes with energy providers). 
As it evolves, the level of intelligence of such apps will be increased by using accurate data 
about  individual  and  collective  electricity  consumption  obtained  from  smart  household 
devices, smart plugs, smart meters and other intelligent monitoring and measuring devices, and 
by  incorporating  artificial  intelligence.  For  the  development  of  such  apps,  based  on  the 
reference  framework  developed  with  Member  States,  the  European  Commission  will  make 
funding available through the Digital Europe programme.   

4.3 

Energy communities and local energy initiatives  

Digital  tools  play  an important  role  in  developing  collective self-consumption schemes  and 
energy communities. Collective energy schemes that involve a whole community, village or 
town can allow such consumers to connect and scale-up collectively their potential interaction 
with the electricity system. For example, such schemes could allow a community to: (i) better 
monitor how the community is performing in terms of energy consumption, or (ii) share solar 
panels or otherwise engage in energy sharing or peer-to-peer trading of electricity produced 
from joint investment projects that can make them less dependent on high electricity prices set 
in the wholesale market. The Commission will seek to make the best use of digital tools to 
support  energy  communities  and  schemes  for  the  local  consumption  of  locally  produced 
electricity. The Commission will also seek to promote the sharing of knowledge on existing 
digital tools, with programs tailored to the needs of different demographic groups. To achieve 
these goals, the Commission will:  

 

In the context of the Energy Communities Repository project, identify and shortlist 
digital tools and produce guidance on energy sharing and peer-to-peer exchange 
arrangements. These tools and this guidance will improve the understanding and skills 
of policy makers, regulators and local communities so they can build up and support 
information and communications technology (ICT) and data-driven business models.  

10 

 
 
 
  Develop  a  first-of-its-kind  experimentation  platform  to  test  and  simulate  energy 
communities  in  combination  with  innovative  activities  such  as  blockchain-based 
energy  trading.  This  experimentation  platform  could  also  help  to  better  understand 
behavioural responses to price signals to optimise benefits for communities and identify 
potential legal, regulatory, fiscal or technical barriers.  

4.4 

A skilled workforce to accelerate the digital transition.  

There is a risk that new data-driven services and innovative technology solutions will not be 
implemented fast enough if there are not enough skilled workers and trained professionals to 
help deploy them43. Integrating energy transition-related topics into mainstream education and 
training  is  a  challenge  across  the  EU.  This  could  hamper  the  deployment  of  clean  energy 
technologies and hinder the growth and competitiveness of the sector. Building on the 2020 
Skills  Agenda,  the  Council  Recommendation  on  ensuring  a  fair  transition  towards  climate 
neutrality, and the ongoing blueprint for sectoral cooperation on skills for digitalisation of the 
energy value chain44, the European Commission will support the establishment – by end 2023 
– of a large-scale partnership on the digitalisation of the energy value chain as part of the 
EU’s Pact for Skills. Synergies will be exploited with the upcoming large-scale partnership 
on onshore renewables, the large-scale partnership in the digital ecosystem, the Digital Skills 
and  Jobs  Community,  the  initiatives  for  digital  skills  in  energy  under  the  Digital  Europe 
Programme45, and other relevant sectorial skills alliances and related initiatives.  

More generally the Commission is carrying out a structured dialogue with Member States to 
accelerate commitments and reforms in the area of digital education and skills. To build on this 
process  and  the  numerous  other  Commission’s  actions  in  this  area,  the  Commission  has 
proposed that 2023 be the Year of Skills. 

5. 

STRENGTHENING CYBERSECURITY AND RESILIENCE IN THE ENERGY SYSTEM  

Cybersecurity  is  an  essential  requirement  for  the  reliability  of  the  increasingly  digitalised 
energy system. It plays a key role for the energy system to remain secure and robust against 
cyber incidents and major attacks, covering the whole value chain of the energy system, from 
production  and  transmission  to  distribution  and  the  consumer,  including  all  the  digital 
interfaces along this path. 

The requirements for - and costs of - addressing cybersecurity risks need to be approached in 
a  way  that  ensures  an  accessible  and  competitive  market  for  new  services  and  products.  In 
addition  to  the  critical  role  of  large  electricity  generation  and  transport  infrastructure  (both 
existing  and  new,  such  as  offshore  wind  farms  and  grids  as  mentioned  in  the  strategy  on 

43   Based  on  the  results  of  the  public  consultation,  the  Commission  has  identified  shortcomings  in  skills 
development and the lack of adequate skilled workers as the most important barrier to the uptake of digital 
technologies (Synopsis Report available in Have Your Say). 

44   The  blueprint  for  sectoral  cooperation  on  skills  is  one  of  the  key  initiatives  of  the  new  skills  agenda  for 
Europe.  Under  the  blueprint,  stakeholders  will  work  together  in  sector-specific  partnerships,  also  called 
sectoral skills alliances. Partnerships from each project will develop a sectoral skills strategy to support the 
overall growth strategy for the sector at EU level (to be further rolled out at national and regional level).   
45   EU funding for training opportunities for acquiring digital skills in energy is available in the Digital Europe 

Programme, open call DIGITAL-2022-SKILLS-03 

11 

 
 
 
 
                                                 
offshore renewable energy46), more decentralised generation and consumption of energy that 
are IoT connected increase the ‘attack surface’ of the entire energy system, and thus increase 
cyber-related risks.  

The  EU  has  a  systemic  approach  to  strengthen  the  cybersecurity  of  energy  networks.  This 
approach  combines  energy-specific  measures  building  on  the  cross-sector  cybersecurity 
framework. The reviewed Directive concerning measures for a high common level of security 
of  network  and  information  systems  across  the  Union  (NIS  2  Directive)  is  planned  to  be 
adopted  soon.  It  defines  the  energy  sector  as  one  of  the  EU’s  critical  infrastructures,  and 
provides for cyber-security obligations related to supply chain security and risk-management 
measures.  

In  addition,  the  NIS  2  Directive  offers  the  possibility  of  carrying  out  coordinated  risk 
assessments of critical supply chains, and the Council in its Conclusions on the development 
of  the  EU’s  Cyber  Posture,  invited  the  Commission,  High  Representative  and  the  NIS 
Cooperation Group to carry out by the second quarter of 2023 ‘a risk evaluation and build risk 
scenarios from a cybersecurity perspective in a situation of threat or possible attack against a 
member state or partner countries’.  After consulting the NIS Cooperation Group and ENISA 
and other relevant stakeholders, and building where appropriate on this risk evaluation and 
risk scenarios, the Commission will identify the specific ICT services, systems or products 
that  might  be  subjected  to  coordinated  risk  assessments  with  priority.  In  this  context,  the 
Commission will pay due attention to risks in the renewable energy and grid supply chain, 
including offshore wind. Such assessments should cover both technical and non-technical risk 
factors, such as undue influence by a third State on suppliers and service providers, building 
on the factors identified in the EU coordinated risk assessment of the security of 5G networks 

To increase the resilience to cybersecurity-risks in the electricity system, the Commission (with 
ACER, ENTSO-E and the EU DSO Entity) intends to propose a delegated act in the form of 
the  network  code  for  cybersecurity  aspects  of  cross-border  electricity  flows,  stemming 
from  the  requirements  of  Article  59(2)(e)  of  the  Electricity  Regulation,  including  rules  on 
common minimum requirements, planning, monitoring, reporting crisis management, aiming 
for its adoption in early 2023. Similarly, with the proposal to amend the Security of Gas Supply 
Regulation47, the Commission aims to adapt the gas system to new risks, such as cyber-attacks, 
and the Commission intends to once this amendment is adopted, propose a delegated act on 
the cybersecurity of gas and hydrogen networks. 

In  parallel,  the  Commission  is    proposing    a  Council  Recommendation  to  improve  the 
resilience of critical infrastructures in a number of priority sectors, including energy, against 
possible  physical,  cyber  or  hybrid  attacks.  The  Proposal  will  address  areas  such  as  a 
harmonised approach to  identify critical  energy infrastructure, the exchange of information, 
and  enhanced  capacity  to  anticipate,  prepare  for,  respond  to,  and  quickly  recover  from  any 
disruptions  thus  strengthening  the  resilience  of  critical  energy  infrastructure.  Lastly,  the 
Commission adopted a legislative proposal on the Cyber Resilience Act that would lay down 
harmonised cybersecurity 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. These requirements would be objective-oriented, 
technology-neutral and future proof. As relevant, the Act would also cover devices embedded 
in the energy supply cycle; for example, digital industrial control systems used for frequency 

46   COM(2020) 741 final  
47    Proposal to amend the Gas Security of Supply Regulation, December 2021 (EU) 2017/1938.  

12 

 
 
                                                 
control in  the electricity grid.  The Cyber Resilience Act  will not  only  enhance  the baseline 
security of the digitalised devices but will also help to increase the trust among the different 
operators. The Commission will therefore promote best use of those schemes by stakeholders.   

6. 

ENERGY CONSUMPTION OF THE ICT SECTOR 

Although  it  brings  overall  net  benefits  to  our  economy  including  by  enabling  emissions 
reductions48, the ICT sector accounts for approximately 7% of global electricity consumption 
and it is forecasted that this share will rise to 13% by 2030. This electricity use at worldwide 
level is currently comparable to the cumulated electricity consumption of the entire population 
taken together in Germany, France, Italy, Spain and Poland, and thus requires comprehensive 
planning given the demand it puts on our electricity grid49. Ensuring that the growing energy 
needs of the ICT sector are met in synergy with the climate neutrality objective is therefore an 
essential part of the twin green and digital transition. It is important to address: (i) the energy 
and  resources  consumption  over  the  full  ICT  value  chain;  and  (ii)  key  emerging  additional 
sources  of  ICT-related energy  consumption.  Solutions  already  exist, such as re-using waste 
heat from data centres, or moving towards circular models (longer lifetimes, reparability, reuse 
and recyclability). On new technologies like high-performance and quantum computing, the 
Commission will pay close attention to their energy consumption and is committed to drive 
investments towards the most energy-efficient solutions. 

6.1 

Design, production, use and end-of-life 

The proposed framework of the Ecodesign for Sustainable Products Regulation (ESPR)50 
aims at (i) establishing EU rules to ensure that only ‘circular’ products are put on the EU 
market (i.e. products that are more durable, can be easily reused, repaired and recycled, and 
consist  as  much  as  possible  of  recycled  materials);  (ii)  creating  a  framework  for  digital 
product passports that provide minimum information, amongst other things, of energy-related 
aspects;  and  (iii)  setting  mandatory  minimum  sustainability  requirements  on  public 
procurement  of  products,  for  a  selection  of  product  groups  including  electronic  and  ICT 
products. To address  the energy consumption of ICT devices in  operation, the Commission 

48   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. 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 in 2023. 

49    In addition, the energy footprint of ICT represents 3-5% of global carbon emissions, which puts it on a par 
with  the  aviation  industry’s  emissions49.  Most  recent  analysis  suggests  that  the  energy  consumption  of 
consumer devices in 2020 accounted for roughly 50% of the overall energy consumption of ICT technologies, 
with  the  two  next  largest  contributors  being  respectively  the  production  of  ICT  devices  (~20%)  and  the 
operation of data centres (~15%).49 However, this picture is expected to change dramatically by 2030, as the 
overall energy consumption of ICT technologies is expected to increase by 50% over this decade. The top 
three contributors in 2030  would then be  the operation of  consumer devices (33%),  the  operation of  data 
centres (30%) and the operation of networks (27%). 

50   Proposal  for  a  Regulation  establishing  a  framework  for  setting  Ecodesign  requirements  for  sustainable 

products and repealing Directive 2009/125/EC, COM(2022) 142 final 

13 

 
 
 
                                                 
will develop an energy-labelling scheme for computers,51 addressing the different uses of 
computers  such  as  (i)  office  work;  (ii)  gaming;  and  (iii)  graphic  design  and  video  editing 
respectively. The Commission’s eco-design working plan 2022-2024 also announced new rules 
covering  product  groups  currently  not  regulated,  such  as  smartphones  and  tablets,  that 
contribute to improving their durability and reparability.52 Green Public Procurement or green 
purchasing helps stimulate a critical mass of demand for more sustainable goods and services 
which otherwise would be difficult to get onto the market. 

6.2 

Energy consumption of telecommunication networks 

More and more ICT devices are being connected, both to each other and to the internet. Over 
60%  of  overall  internet  traffic  is  used  for  video  streaming,  with  online  gaming  and  social 
networking the second and third largest sources of traffic. In 2019, the Commission raised in 
its communication Shaping Europe’s digital future the possibility of introducing ‘transparency 
measures  for  telecoms  operators  on  their  environmental  footprint’  at  EU  level53.  More 
recently, the proposed Declaration on European Digital Rights and Principles emphasises that 
‘everyone  should  have  access 
the 
environmental impact and energy consumption of digital products and services, allowing them 
to make responsible choices’54. The Commission will work, in consultation with the scientific 
community  and  stakeholders  towards  boosting  transparency  by  developing  common 
indicators  for  measuring  the  environmental  footprint  of  electronic  communications 
services, building on the work already carried out by regulators and electronic communications 
providers. The greater sustainability of certain telecommunication networks can be considered 
when assessing public support. 

to  accurate,  easy-to-understand 

information  on 

An EU Code of Conduct for the sustainability of telecommunications networks can help 
to  steer  investments  towards  energy-efficient  infrastructures.  The  Commission  will  work 
towards  establishing  such  an  EU  Code  of  Conduct  by  2025  building  on  the  work  done  for 
measuring the environmental impact of electronic communications services.  

In  addition,  as  part  of  this  action  plan,  the  Commission  will  fund  a  study  and  prepare  a 
communication and awareness-raising campaign on the responsible energy consumption of 
day-to-day digital behaviours (such as video streaming, the responsible use of emails, or the 
archiving of digital files). 

6.3 

Energy consumption of data centres 

The Commission has set the strategic goal of ensuring that data centres are climate-neutral, 
energy-efficient and resource efficient by 2030. More and more calculation tasks and storage 
capacities are being carried out over the cloud or High-Performance Computers (HPC). This 
has meant that data centres have become a core infrastructure element of ICT systems, and the 
energy consumption of EU data centres is expected to increase over 200% between 2020 and 

51   It  should  be  noted  that  electronic  displays,  the  only  category  of  electronic  devices  having  an  energy 
consumption higher than desktop and laptop computers, are already targeted in the EU by an existing energy 
labelling scheme. 

52   See 

06_en  

53   See 

https://ec.europa.eu/info/news/ecodesign-and-energy-labelling-working-plan-2022-2024-2022-apr-

https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/shaping-europe-digital-

future_en  

54   COM(2022) 28 final   

14 

 
 
                                                 
203055.  In  2018,  data  centres  accounted  for  2.7%  of  electricity  demand  in  the  EU56.  The 
Commission takes due note of the significant energy-efficiency improvements the data-centre 
industry has made in recent decades. But to make the twin digital and green transitions happen, 
public authorities or system operators should not be put in the position  of having to choose 
between attracting better telecoms networks and (hyperscale) data centres on the one hand, and 
ensuring  that  businesses  and  households  can  access  electricity  on  the  other  hand.  The 
Commission has already acknowledged the strategic role of data centres in the Digital Strategy, 
which states the aim of achieving “making these infrastructures climate neutral and energy 
efficient by 2030”.57 This was supplemented by the target of putting in place 10,000 climate-
neutral, highly secure edge nodes by 2030.58 The Commission has already taken a number of 
actions to reach these objectives59. In addition to these actions, the Commission will do the 
following: 

i)  By 2025 the Commission will introduce an environmental labelling scheme for data 
centres,  building  on  the  monitoring  and  reporting  requirements  for  energy 
consumption  for  data  centres  as  proposed  in  the  review  of  the  Energy  Efficiency 
Directive  (EED)60.  This  labelling  scheme  can  facilitate  further  decision-making  at 
national and EU level to ensure that data centres operating in the internal market are 
energy efficient and sustainable. 

ii)  The  Commission  will  explore  introducing  separate  reporting  lines  for  indirect 
greenhouse gas  emissions  stemming from  the  purchase of cloud computing and 
data  centre  services  in  EU  sustainability  standards  under  the  Corporate 
Sustainability Reporting Directive;  

iii) The Commission will improve requirements on the operating conditions of servers 
and data storage products and consider an energy label for servers and data storage 
products through the revision of the Ecodesign rules for servers and data-storage 
products.61 

iv)  The Commission will promote reuse of waste heat from data centres to heat homes and 
businesses as part of the revised Energy Efficiency and Renewable Energy Directives 
as well as through guidance provided in the National Energy and Climate Plans of 
Member States, to ensure that these centres play a positive role for the communities 
around them. 

v)  The Commission also intends to fund R&I in systems that can store waste heat produced 
by data centres during summer season to warm households and businesses in winter. 
To  support  these  initiatives,  the  Commission  will  launch  a  study  end  of  2022  on 
optimising the overall integration of data centres in the energy and water systems. 

55   To this respect, it can be noted that while the share of cloud data centres accounted for 10% of data centres’ 
energy  consumption  in  2010,  it  increased  to  35%  in  2018  and  is  expected  to  rise  to  60%  in  2025.  See 
https://ec.europa.eu/newsroom/dae/document.cfm?doc_id=71330.  

56   It  will  reach  3.21%  by  2030,  if  development  continues  on  the  current  trajectory:  https://digital-
strategy.ec.europa.eu/en/library/energy-efficient-cloud-computing-technologies-and-policies-eco-friendly-
cloud-market  

57   COM(2021) 118 final 
58   See 

https://ec.europa.eu/info/strategy/priorities-2019-2024/europe-fit-digital-age/europes-digital-decade-

digital-targets-2030_en 

59   Through, most notably, the EU Code of Conduct on Data Centre Energy Efficiency, an important number of 
studies  and  research  projects,  regulation  (EU)  2019/424  on  the  Ecodesign  of  servers  and  data  storage 
products, the EU Taxonomy for Sustainable Finance, which includes criteria for data centres, as well as the 
European Chips act. 

60   Directive (EU) 2012/27 on energy efficiency, Article 11(10) 
61    Regulation (EU) 2019/424 

15 

 
 
 
                                                 
6.4 

Energy consumption of cryptocurrencies 

Just as their use has grown significantly, the energy consumption of cryptocurrencies has more 
or  less  doubled  compared  to  2  years  ago62,  reaching  around  0.4%  of  worldwide  electricity 
consumption63. In harnessing the use of cryptocurrencies and other blockchain technologies in 
energy markets and trading, care must be taken to use only the most energy efficient versions 
of the technology. Most of the energy consumption is linked to the relatively outdated proof-
of-work consensus mechanism, which is nevertheless used by the most popular cryptocurrency 
(Bitcoin).64 As Europe currently represents only around 10% of global Proof-of-work mining 
activities,  international  cooperation  is  needed  to  tackle  the  issue  of  the  high  energy 
consumption of Proof-of-work mining in a globally impactful way.  

In  addition  to  measures  addressing  data  centres  and  cloud  services  (see  section  above),  the 
proposal for a Regulation of Markets in Crypto Assets (MiCA) on which a political agreement 
was reached by the co-legislators on 30 June 2022 will require actors in the crypto-asset market 
to  disclose  information  on  the  environmental  and  climate  footprint  of  crypto-assets.  The 
European Securities and Markets Authority will develop draft regulatory technical standards 
on  the  content,  methodologies  and  presentation  of  information  regarding  principal  adverse 
environmental  and  climate-related  impacts.65  In  addition,  the  Commission  will  develop  a 
report by 2025 that includes a description of the environmental and climate impact of 
new technologies in the crypto-asset market. The report will also include an assessment of 
policy  options  to  mitigate  adverse  impacts  on  the  climate  of  technologies  used  in  the 
crypto-asset market, in particular in relation to consensus mechanisms.  

In the meantime, given the current energy crisis and the heightened risks for the coming winter, 
the Commission urges Member States (i) to implement targeted and proportionate measures to 
lower the electricity consumption of crypto-asset miners, in line with the proposed Council 
Regulation on an emergency intervention to address high energy prices, and (ii), also in a longer 
term  perspective,  to  put  an  end  to  tax  breaks  and  other  fiscal  measures  benefitting  crypto-
miners currently in force in certain Member States. In case there is a need for load shedding in 
the electricity systems, the Member States must also be ready to stop crypto-assets mining. 

On 15 September 2022, Ethereum, the second largest cryptocurrency in the world, completed 
its long-awaited switch to proof-of-stake consensus mechanism, which the company estimates 
would reduce Ethereum’s energy consumption over 99%. If so far only cryptocurrencies with 
a smaller market cap have used the mentioned consensus mechanism that uses less energy, then 
this switch shows that the crypto world can move towards a more efficient system. But we need 
to go the extra mile for this to happen. To reduce energy consumption, the Commission will 
promote “environmentally friendly” consensus mechanisms through the European Blockchain 
Services Infrastructure as gold standard in Europe and the world. 

The Commission will cooperate internationally with, and build on the technical expertise of, 
standardisation bodies to develop an energy-efficiency label for blockchains. 

62   Based on June 2022 data. 
63     See Cambridge Bitcoin Electricity Consumption Index: https://ccaf.io/cbeci/index.   
64   See for instance https://www.bloomberg.com/professional/blog/why-bitcoins-energy-problem-is-so-hard-to-
fix-quicktake/#:~:text=1.,which%20keeps%20a%20running%20estimate.  Modern  blockchain  consensus 
mechanisms require much less energy to operate than the one used in Bitcoin (e.g. “proof of stake”).  

65   The final MiCA text was agreed by co-legislators on 30 June 2022. 

16 

 
 
 
 
 
                                                 
7. AN EU-WIDE COORDINATED APPROACH 

Digitalisation is an ongoing process changing society and the energy system. It needs careful 
planning at all levels and a dedicated dialogue and political guidance on how best to deliver on 
the  EU’s  digital  and  green  policy  objectives.  The  speed  and  global  nature  of  digitalisation 
means that the following should be prioritised: (i) supporting twin transition synergies through 
the EU’s main frameworks for Member State planning for the twin transitions and EU funding 
tools; (ii) a closer cooperation at EU-level between public authorities as well as between energy 
and digital  stakeholders  across the entire energy  value chain,  and  (iii) closer cooperation  at 
international level with like-minded countries and international organisations. 

7.1 

Supporting REPowerEU and the recovery from the COVID19 pandemic  

In  their  Recovery  and  Resilience  Plans  (RRPs),  Member  States  recognised  the  potential  of 
synergies  between  the  Green  Deal  and  the  Digital  Decade  Policy  Programme  2030.  For 
example, many RRPs referred to using digital solutions to: (i) accelerate the decarbonisation 
of energy networks; (ii) integrate smart meters in energy systems; or (iii) upgrade the smartness 
of the electricity grids66. The Recovery and Resilience Facility (RRF) also has the potential to 
be a key tool to help deliver on the REPowerEU plan as it is an agile instrument to address 
challenges in a wide range of policy areas over a medium-term horizon.  

In May 2022, the Commission made a legislative proposal to add REPowerEU chapters to the 
the national Recovery and Resilience Plans, to support the specific reforms and investments 
required  to  implement  REPowerEU.67  Therefore,  in  the  context  of  the  ongoing  dialogues 
between  the  EU  and  the  Member  States  on  how  the  RRPs  can  help  delivering  on  the 
REPowerEU  objectives,  the  Commission  invites  Member  States  to  outline,  where 
appropriate measures in the field of digitalisation of the energy system. 

7.2 

Synergies between the EU’s energy and digital agenda  

Going forward, it is essential to exploit synergies between the green and digital transitions in 
the  two  main  instruments  at  EU  level  that  guide  the  European  Green  Deal  and  the  Digital 
Decade Policy Programme 2030, namely: (i) the National Energy and Climate Plans (NECPs) 
–  and  in  particular  their  updates  due  by  June  2024  to  reflect  the  increased  ambition  of  the 
revised  2030  framework;  and  (ii)  the  national  Digital  Decade  roadmaps.  These  synergies 
include the use of data and tools for energy system integration and planning. They also concern 
the optimal integration of digital infrastructure such as data-centres and cloud infrastructure 
into the overall energy and heating systems, in coexistence with competing uses of that system, 
for  example  through  energy-efficient  data  centres  and  the  reuse  of  their  waste  heat  for 
businesses and households, as well as allocating spectrum in telecommunications networks to 
smart  energy  grid  solutions.  How  to  exploit  fully  such  synergies  will  be  considered  in  the 
guidance for Member States’ updates of their NECPs, that the Commission intends to publish 
later this year.  

66    Recovery  and  Resilience  Scoreboard.  Thematic  Analysis:  Digital  public  services,  European  Commission, 

December 2021.  

67    Commission Proposal COM(2022) 231 final, amending the Regulation as regards REPowerEU chapters in 

recovery and resilience plans, and the guidance on RRPs in the context of REPowerEU.   

17 

 
 
 
                                                 
Moreover, the Commission will use the Smart Energy Expert Group to set up a structured 
high-level  dialogue  with  national  representatives  on  ‘Digitalisation  of  energy:  state  of 
play,  progress,  opportunities  and  challenges’.  The  expert  group  will 
launch  a 
complementary  analysis  between  the  Commission  and  Member  States  based  on  both  the 
NECPs and the cooperative dialogues foreseen for the national Digital Decade roadmaps. This 
analysis will seek to draw up a common agenda, trajectories and milestones  to improve the 
digitalisation of the energy system through a coherent planning and monitoring framework.  

To help quantify the benefits of digitalising the energy system, the Commission will continue 
the  close  cooperation  with  the  European  Green  Digital  Coalition,  on  developing  tools  and 
methodologies for estimating and measuring the net impact of enabling digital technologies, 
e.g. in the energy sector.  

The Commission will also build on the exploratory work and expertise of the Body of European 
Regulators  for  Electronic  Communications,  and  consider  setting  up  platforms  to  coordinate 
and cooperate across energy and telecoms to facilitate the clean energy transition. Cooperation 
in this area will also help digitalise the energy system. For example, ComReg, the statutory 
body responsible for the regulation of electronic communications in Ireland, in 2019 already 
announced that most of its 400-MHz Band spectrum was awarded to smart-grids solutions. 

7.3 

Connecting local and regional innovators  

Building a shared vision and pathway for digitalising the energy system will only be successful 
if the EU and its Member States can build on innovation ecosystems where many digital and 
energy actors at European, national, regional and local level cooperate. EU-level support can 
help this cooperation by speeding up innovation and the entry-to-market of digital solutions. 
Therefore, the Commission will create the ‘Gathering Energy and Digital Innovators from 
across the EU’ (GEDI-EU) platform for structural cooperation between, on the one hand, 
the European Digital Innovation Hubs (EDIHs) and the Artificial Intelligence Testing and 
Experimentation Facilities (AI TEFs) established under the Digital Europe Programme that 
focus  on  energy68,  and  on  the  other  hand,  the  EU  network  of  innovators  and  research 
institutions in the energy sector set up under the Strategic Energy Technology Plan (SET 
Plan)69.  The  platform  will  cooperate  closely  with  cities  as  beneficiaries,  investors  and 
incubators of digital technologies in the energy sector, for example through the cooperation of 
smart cities and communities. 

The activities of the platform will aim at (i) drawing up a common agenda of priority needs 
and  mutual  interests;  (ii)  supporting  knowledge communities, through vertical (EU-local) 
as well as horizontal (local-local) and cross-sectoral sharing of best practices and enhancing 
skills; and (iii) strengthening interoperability of new products or services based on co-design 
by  innovators  on  the  platform  to  facilitate  market-uptake  across  the  EU.  The  platform  will 
report  to  the  Smart  Energy  Expert  Group  and  also  promote  sharing  of  best  practices  and 
recommend future measures, for example in expert workshops and an annual high-level event. 

68   34 out of the 136 EDIHs that will be co-funded via Digital Europe and will start in September 2022 will focus 

(but not exclusively) on the digitalisation of the energy sector. This number may grow in 2023. 

69    Namely the European Technology & Innovation Partnership – Smart Networks for Energy Transition (ETIP 
SNET),  the  European  Research  Area  Co-fund  (ERA)  Net  Smart  Grids  Plus  and  the  European  Energy 
Research  Alliance  (EERA).  In  addition,  the  platform  will  also  build  on  the  activities  of  the  European 
Partnership for Clean Energy Transition under the Horizon Europe Cluster on Climate, Energy and Mobility. 

18 

 
 
 
                                                 
7.4 

Building international partnerships for the green and digital transition  

Interoperable  technical  standards,  cyber-security,  data  protection  and  other  key  features  of 
digitalisation  of  the  energy  system  must  be  ensured  globally,  in  international  fora  and  in 
cooperation with partner countries. Team Europe will need to be well coordinated and set out 
its  plans  clearly  to  help  avoid  incompatible  standards  and  shape  a  global  consensus  on  the 
choice of technologies and services where innovation happens rapidly.  

Innovative digital energy technologies can boost both sustainable development globally as well 
as the EU´s competitiveness as fostering international collaboration creates new global value 
chains  for  components  and  services,  and  help  spread  a  European,  values-basedapproach  to 
standards,  products,  and  services.  To  advance  the  green  and  digital  transition  with  partner 
countries through bilateral contacts, the Commission will integrate digital and green aspects 
in  energy-related  projects,  partnerships  and  cooperation  agreements.  In  particular,  the 
countries of the European Economic Area, the United Kingdom, Japan and the United States 
could be cooperation partners.  

The Commission will continue to participate actively in multilateral, international fora, such as 
the UN70, G7, the Clean Energy Ministerial, Mission Innovation, and the International Smart 
Grid Action Network (ISGAN). It will also build on the important work of the IEA and the 
International Renewable Energy Agency (IRENA). In doing this, the Commission will seek to 
strengthen international cooperation and promote digitalisation of energy as a horizontal issue 
or  by  promoting  specific  solutions.  The  Commission  will  also  promote  international 
cooperation,  in  particular  through  joint  research  and  innovation  activities  supported  under 
Horizon Europe and build on existing experiences, such as the EU-India High-Level Platform 
on Smart Grids71.  

7.5 

Financial support for faster uptake of digital energy technologies  

To  ensure  that  innovation  in  digital  technologies  -  and  innovation  enabled  by  digital 
technologies  -  are  taken  up  in  the  energy  sector,  continuous  and  targeted  support  for  their 
development and use is key.  

It is critically important to ensure public and private support for R&I at EU level and in Member 
States, and finding synergies between both. The SET Plan can help to find these synergies. The 
review  of  the  SET  Plan  scheduled  for  next  year  will  address  the  enabling  role  of  digital 
technologies. The Commission calls on Member States to: (i) increase their R&I support 
for the testing and piloting of digital technologies in the energy sector; and (ii) promote 
cooperation  between  digital  and  energy  stakeholders  through  the  national  R&I 
programmes.  

At EU level, the Commission intends to include in the Horizon Europe work programme for 
2023-2024  a  flagship  initiative  to  support  digitalisation  of  the  energy  system,  which 
addresses the key priorities of this action plan. In addition, Horizon Europe will support the 
uptake of digital technologies to promote the competitiveness of clean energy technologies in 
the  EU,  notably  by  using  digital  technologies  to  support  improved  performance  or  reduced 
technology  costs.  Also,  the  EU  Climate-neutral  and  Smart  Cities  Mission  to  establish  100 

70   Coalition for Digital Environmental Sustainability (CODES) www.sparkblue.org/CODES 
71   EU-India High Level Platform on Smart Grids - Florence School of Regulation (eui.eu) 

19 

 
 
 
 
 
 
                                                 
climate neutral cities by 2030 will be supported by funding the development of Digital Twins 
of  cities  that  will  include  energy  infrastructure.  Where  possible,  the  Commission  will 
promote/support  the  use  of  Open  Source  to  ensure  accessibility  and  market  uptake. 
Furthermore,  the  European  Innovation  Council  (EIC)  supports  start-ups  and  scale-ups  that 
develop and apply digital technologies in the energy sector in 2022 and 2023. With regard to 
cybersecurity,  the  newly  established  European  Cybersecurity  Competence  Centre72  and  the 
Network  of  Cooperation  Centres  co-funded  by  Horizon  Europe,  the  Digital  Europe 
Programme  and  Member  States,  aim  at  increasing  capacity  building,  innovation  and 
investments. The Digital Europe Programme also supports operators of critical infrastructures 
(including energy). 

The cohesion policy supports  investments  by  Member States, regions  and local  authorities. 
Financial assistance will target the digital transformation across sectors, including energy, with 
a particular focus on smart energy systems and smart grids. Copernicus, the Earth Observation 
component of the Union Space Programme and Destination Earth, provides environmental data 
that enable for example better siting and operation of renewable energy generation. 

The LIFE Clean Energy Transition (CET) sub-programme supports the development of 
smart energy services’ solutions to empower citizens and communities in the energy system, 
to allow for a better control of energy consumption and thus to trigger behavioural changes and 
demand  for  building  renovations.  In  addition,  the  LIFE  CET  sub-programme  supports  the 
market uptake and integration of solutions able to improve the smartness of the EU building 
stock and its integration in a digitalised energy system to fully exhaust the optimisation and 
flexibility potential of buildings and building systems. This includes addressing gaps linked to 
the availability of data, interoperability, user acceptance and skills. 

8.  

CONCLUSION 

The Russian invasion of Ukraine and current high energy prices have only increased the need 
and  speed  to  ensure  that  the  EU  increases  both  its  independence  from  Russian  fossil  fuel 
imports and its strategic sovereignty and security in creating a digital energy system. As the 
electrification  and  decarbonisation  of  the  EU  energy  system  is  accelerating,  increasing  its 
digitalisation  is  essential  to  achieve  the  Union’s  2030  and  2050  climate  targets  in  a  cost-
effective way. This Action Plan lives up to the ambition stated in the Strategic Foresight Report 
on the twin green and digital transitions that digital technology helps to create a climate-neutral 
and resource-efficient society, while ensuring that everybody can benefit from this transition. 

As indicated in this Action Plan, this will require both medium-term and long-term actions as 
well as framed governance. It will involve multiple stakeholder communities, businesses and 
international partners and it will require clever use of limited public funding and more private 
investments. There is no transition towards clean energy without a plan for digital. Therefore, 
the Commission invites the European Parliament and the Council to endorse this action plan 
and contribute to its swift implementation. 

72   European Cybersecurity Competence Centre: https://digital-strategy.ec.europa.eu/en/policies/cybersecurity-

competence-centre   

20 

 
 
 
                                                 
ANNEX: DIGITALISING THE ENERGY SYSTEM: KEY COMMISSION ACTIONS AND INDICATIVE 
TIMELINE  

The Commission will: 

An EU framework for sharing data 

Formally establish the ‘Smart Energy Expert Group’ and set up ‘Data for Energy 
(D4E)’ as one of its permanent working groups. 
Establish the governance of the common European energy data space. 
Adopt  an  Implementing  Act  on  interoperability  requirements  and  procedures  for 
access to metering and consumption data. 

Prepare the ground for adopting Implementing Acts on interoperability requirements 
and  procedures  for  access  to  data  required  for  demand  response  and  customer 
switching.  
Promote a code of conduct for energy-smart appliances to enable interoperability 
and boost their participation in demand response schemes. 
Intend  to  support  the  deployment  of  the  common  European  energy  data  space 
through a Digital Europe Programme call for proposals.  

Q.I 2023  

2024 
Q.III 2022 
(Submission to 
comitology) 
Q.III 2022 
(start of activity) 

Q.IV 2023  

2024  

Promoting investments in digital electricity infrastructure 

Support EU TSOs and DSOs to create a Digital Twin of the European Electricity 
grid. 
Support  ACER  and  the  National  Regulatory  Authorities  in  their  work  to  define 
common smart grid indicators. 
Support under CEF Digital the development of concepts and feasibility studies for 
pan-European Operational Digital Platforms.  

as of 2022  

By 2023 

By 2024 

Ensuring benefits for consumers: new services, skills and empowerment 

Ensure  that  key  R&I  projects  work  together  to  identify  strategies  to  engage 
consumers in the design and use of digital tools.  
Identify and shortlist digital tools and produce guidance on energy sharing and peer 
to peer exchanges for the benefit of energy communities and their members as part 
of the Energy Communities Repository. 
Develop an experimentation platform to test and simulate energy communities. 
Support the establishment of a large-scale partnership as part of the Pact for Skills. End of 2023  

2023-2024 

2023-2024 

Q.II 2023 

Strengthening cybersecurity and -resilience in the energy system 

Propose a delegated act on the cybersecurity of cross-border electricity flows. 

Q.I 2023  

Propose a delegated act on cybersecurity for gas networks (subject to confirmation 
after the outcome of the legislative procedure). 

Subject to 
confirmation 

 Controlling the energy consumption of the ICT sector 
Develop an energy-labelling scheme for computers and evaluate a possible revision 
of  the  eco-design  regulation  on  servers  and  data  storage  products.  Explore  the 
possibility to develop common indicators for measuring the environmental footprint 
of electronic communications services. 
Establish  an  EU  Code  of  Conduct  for  the  sustainability  of  telecommunications 
networks. 
Fund a study and prepare a communication and awareness raising campaign on the 
responsible energy consumption of day-to-day digital behaviours. 
Propose binding obligations and transparency requirements, as well as provisions to 
promote the reuse of waste heat, for data centres. 
Explore and prepare the introduction of an environmental labelling scheme for data 
centres. 
Develop an energy efficiency label for blockchain.  

Q. IV 2023  

Q. IV 2025  

2022-2023 

Q.IV 2022 

2025 

2025 

21 

 
 
An EU-wide coordinated approach 

Create  a platform ‘Gathering Energy and Digital Innovators from across the EU’ 
(GEDI-EU). 
Intends  to  provide  financial  support  for  R&I  and  market  uptake  of  digital 
technologies  in  the  energy  sector,  through  the  Digital  Europe  Programme,  LIFE, 
cohesion policy and a flagship programme for Digitalisation of Energy in Horizon 
Europe. 
Develop,  in  cooperation  with  the  European  Green  Digital  Coalition,  tools  and 
methodologies  to  measure  the  net  impact  of  enabling  digital  technologies  in  the 
energy sector, on the environment and climate. 

2022 

2023-2024 

2023-2024 

22