# Review and Categorization of Digital Applications in the Energy Sector
## 6 Suggested Evaluation Methodology for Digital Applications  
Digitalization has the potential to have a drastic impact on all steps of the energy value chain as well as on all stakeholders, including the environment, the overall society, and the national economy. Good knowledge of the functionality of digital applications and their impact on all stakeholders is necessary.  
One the one hand, it enables a broad societal and political discussion to set the general targets and guidelines for the digitalization process and on the other hand, it is an important piece of information for companies to develop and sustainably implement digital applications. A variety of conventional as well as rather recent methods, such as living labs and design thinking, are already applied in the development of new products, services, and business models. However, a holistic analysis of benefits and potential risks of digital applications, taking into account all impacted stakeholders, provides an effective way to identify and solve potential impediments and drawbacks early on.  
As an outlook, a methodology is presented in this section which could offer a basic framework to perform this holistic analysis of technical, ecological, social and economic aspects of digital applications. A combination of a multi-criteria analysis (MCA), a life cycle assessment (LCA), and semi-structured interviews is suggested. In Figure 4, the overall concept and basic functionality of the combination of methodologies is depicted. The concept can be adapted to the diverse kinds of digital applications and different analysis depths, and it allows the inclusion of quantitative as well as qualitative criteria. The result is an overall evaluation with reduced complexity including specific highlights, risks and respective solution options.  
As depicted in Figure 4, the basic structure for the evaluation is a multi-criteria analysis. However, the assessment of the different criteria defined in the MCA is conducted either within the life cycle assessment or via the semi-structured expert interviews. This offers the flexibility to either perform a more qualitative \"Quick Check\" based mostly on expert interviews (or even literature review) or if required a qualitative \"Deep Analysis\" via the LCA.  
A first test of the described methodology is currently being conducted for the German \"smart meter\" roll-out in cooperation with \"smart meter\" manufacturers. While an overall evaluation result cannot yet be given, first risks/bottlenecks have already been identified. One risk is the use of conflict (e.g., tin, tantalum) and scarce/critical (e.g., rare earth elements) materials. However, this risk is not specific to \"smart meters\" but applies to most modern communication devices. Besides that, some manufacturers of \"smart meters\" have managed to minimize or even eliminate the use of certain conflict and scarce materials. Another risk is a potential rebound effect. Although field tests have shown a reduction in energy consumption after the implementation of \"smart meters\", it is unknown to what extent these reductions are permanent. A lower reduction of energy demand could offset the life cycle GHG balance. This risk could be met in the future with automated demand response mechanisms for \"smart\" household devices based on, for example, price signals. Furthermore, missing  
Figure 4: Suggested combination of methodologies for holistic assessment and evaluation of digital applications.  
standards such as for \"smart home\" network communication protocols and interfaces could lower the implementation speed of applications and thereby reduce overall benefits.  
Full application of the methodology and discussion of the results, including an evaluation of the suitability of the methodology is yet to come. However, the first experiences of the test suggest that the proposed methodology as such could be suitable for the purpose of a holistic evaluation of digital applications.