Europe’s energy sector is set for a transformation in the future with the use of renewable power sources and the introduction of intelligent IT systems being the principle developments driving change, world leaders heard at the Annual Meeting of the World Economic Forum in Davos this week.
“I see two major factors that will hugely influence how the marketplace of the future will look: the wide-scale roll-out of renewable and distributed power generation systems and the development of intelligent IT systems,” European Commission’s Vice-President Maroš Šefcovic said at the Forum.
Wind and solar power are both variable power sources which require a much more responsive and flexible system compared to the needs of traditional fossil fuel sources. Meanwhile, new technologies will enable households and businesses to manage their use of electricity in a much more intelligent way, helping the overall system to stay in balance.
The EU’s strategies for energy will underpin the transformation by ensuring a well-functioning energy market that achieves competitiveness in the market and affordable energy for households and businesses, energy security and the decarbonisation of the sector that will help Europe achieve its climate change goals.
The transition will include the integration of retail and wholesale energy markets and the creation of regional or pan-European organisations and cooperations that manage system operation and gradually shift from the current system run by Transmission System Operators which largely function within national boundaries. New storage facilities and increasing transmission capacities will add more flexibility to the system.
At the same time, smart technologies will change the system in a way that mirrors the revolution in telecoms: “we have seen how new technologies have fundamentally transformed the telecoms business. They will also transform power generation and supply which have long been conservative businesses. What I can promise is that we as European regulators will facilitate this change,” Šefcovic said.