Unlocking digital innovation in the electricity system

Electricity systems power digital societies and they are undergoing profound change. Distributed sources of generation and storage are transforming legacy electricity systems. Simultaneously, overall electricity demand continues to rise, driven in part by the expansion of digital infrastructure such as data centres, which are essential for both artificial intelligence (AI) training and inference. The application of digital technologies, notably AI, across the electricity system, spanning generation, transmission, distribution, storage and end use, is enabling systems to adapt to these challenges. This paper explores how digital innovations are reshaping electricity systems, and trends in policies. Evidence suggests that public funding for digital innovation in electricity systems is declining relative to overall public energy research and development budgets, raising questions about whether sufficient innovation is available to keep pace with societal demands on the electricity system. The paper concludes with policy considerations to promote and sustain digital transformation across electricity systems.