# Impact of Digital Transformation on the Energy Sector: A Review
## 4 Digital Transformation in the Energy Sector and Power Industry
### Social and Economic Impacts of the Digital Transformation on the Energy Sector  
The impact of digital transformation on our society and economy is complex, and it is important to understand the dynamics, interactions, models, actors, and influencing factors involved. Investigating these aspects can provide insight into the profound impact of digital transformation [52]. [PERSON] [61] identifies three key factors that will transform work and employment in the digital age. The first factor is the _automation of work_, which involves the replacement of human labor with digitally enabled machines for certain tasks within production and distribution processes. While the concept of machine automation has been around for centuries, advancements in AI and other digital technologies have vastly expanded the possibilities for automation, meaning that a wider range of tasks can now potentially be automated. The second factor that [61] identifies is the _digitalization of processes_. This involves using sensors and rendering devices to convert physical aspects of the production process into digital information (and vice versa), taking advantage of the enhanced processing, storage, and communication capabilities of digital information. Digitalization is the primary mechanism by which the characteristics of the digital economy are extended beyond the ICT sector to other industries and sectors. The third factor is _coordination by platforms_, which refers to digital networks that algorithmically coordinate economic activities. Platforms are digital networks that facilitate transactions through algorithmic coordination. This definition encompasses two critical elements: the structured digital \"space\" where goods or services can be offered or demanded, and the set of algorithms that match and coordinate transactions in an automated way [61; 62]. The vectors of change mentioned above of change can have a significant impact on the structure of employment, affecting both occupational and sectoral structures, as well as working conditions, industrial relations, and the social organization of production. As [52; 61] notes, mid-skilled occupations in the energy sector that involve high levels of repetition, standardization, and limited social task content are at a high risk of being disrupted by automation as advanced robotics and AI-enabled machines, become more prevalent. However, digital transformation can also create new job opportunities based on high-value digital services and activities, as well as a new industrial value chain, which can mitigate job loss [5; 52; 61]  
The digitalization of the grid through smart grids is a transformative development in the electricity sector. The World Economic Forum has highlighted that smart grids and grid-edge technologies, including smart meters, have resulted in cost reductions and enabled innovative business models that empower customers. Additionally, smart grids have led to a 60% improvement in the asset utilization of the electricity system. Digitalization has also facilitated increased data collection and analysis to optimize production processes, improve energy efficiency, and reduce waste, among other benefits that can be applied to all production processes [63; 64]. Despite the advantages offered by smart grids and grid edge technologies, concerns related to privacy, safety, and loss of control have emerged in society. Therefore, the acceptance of consumers has become a critical factor in the digital transformation of the electricity sector [65]. To increase acceptance, it is important to raise awareness, educate consumers, and highlight the benefits of smart meters, such as providing precise billing, reducing energy consumption, and lowering costs by adjusting usage. A survey conducted by Smart Energy GB among individuals in the UK using smart meters found that 73% of respondents would recommend them, 82% believed that smart meters could help them  
Figure 4: The key drivers of and barriers to digital transformation process in the energy sector.