It is widely accepted that massive investments in solar photovoltaics, heat pumps and electric vehicles (EVs) by 2030 will be required to achieve a reduction in Europe’s greenhouse gas emissions. But in order to achieve the targeted 55% reduction in these emissions it is estimated that renewables will need to provide a 42.5% share of the energy mix by the end of this decade. This can only come about through digitalisation of the energy sector.

Digital twins – a key enabler for the transition
Digital solutions such as digital twins, artificial intelligence (AI) and advanced data analytics will be integral to ensuring grid resilience, renewable energy integration and operational efficiency. Creating digital twins of energy grids that simulate, monitor and optimise energy flows in real-time is crucial to enhancing the European Union’s (EU) ability to manage grid flexibility and predict supply-demand imbalances. It is also necessary to successfully integrate renewable energy sources more effectively into the grid.

A 36-month EU project supported by Horizon Europe, that kicked off in January 2024, aims to address some of these issues through the creation of a pan-European digital twin of the electricity system. The TwinEU project synthesises insights from previous EU-funded projects under the European Green Deal and REPowerEU initiatives. The latter is a European Commission (EC) plan to end reliance on Russian fossil fuels before 2030 in response to the Russian invasion of Ukraine.

The TwinEU project’s mission is to accelerate the digitalisation of the energy system and contribute to the smart energy transition. Developments so far include creating an EU framework for sharing data, the establishment of a common European energy data space, a strategic EU coordination for grid investments, and the formation of the EC’s Smart Energy Expert Group. This group was proposed in 2022 but only held its first meeting in 2024. It takes over from, and extends the work of, the previous Smart Grids Task Force. Its goal is to accelerate the digitalisation of the energy system and contribute to the smart energy transition.

TwinEU is currently carrying out surveys and interviews with the project’s stakeholders. These are designed to help map their roles and interactions within the digital twin ecosystem, while at the same time uncovering the critical barriers they face, such as data exchange and system integration. A total of 86 stakeholders are involved in the project, representing transmission system operators (TSOs), distribution system operators (DSOs), market operators, regulatory bodies and technology providers.

Digital solutions such as digital twins, artificial intelligence (AI) and advanced data analytics will be integral to ensuring grid resilience, renewable energy integration and operational efficiency.

Data centres – the energy transition’s Achilles heel
Meanwhile, a recent study by McKinsey identifies data centres as being the potential ‘Achilles heel’ in Europe’s goal to drive down its historical reliance on fossil fuels. Data centres are forecast to account for about 5% of total European power consumption in the next six years from approximately 2% today. This rise is equivalent to approximately 35 GW by 2030, up from 10 GW today. But to meet this new IT load demand, more than $250–300bn of investment will be needed in data centre infrastructure, excluding power generation capacity, according to McKinsey.

The increase in data centre power consumption will be one of the primary near-term growth drivers for power demand in Europe. But if the net zero commitments that have already been announced by many major data centre players have any chance of being adhered to then much of this increase will need to fall on the shoulders of ‘green power’. However, this will be no easy task as much of the discussion so far has tended to focus elsewhere. As McKinsey notes: ‘While there has been much discussion about potential increased power demand growth from domestic manufacturing, EVs, heat pumps and electrolysers, the demand from data centres is immediate and substantial.’

New data centre solutions
Meanwhile, Eaton EMEA has developed an intelligent power management system for data centres, called Brightlayer. The system includes suites to improve cooling, heat utilisation and airflow containment.

Elsewhere, in ‘hyper-scale’ data centres, energy savings can be made through enlargement of three-phase uninterruptible power supplies (UPSs) to enable them to operate in energy-saving modes to mitigate harmonics, correct power factor and balance loads for increased reliability and energy efficiency. Software can also be leveraged to improve data centre efficiency by providing visibility into complex energy flows.

More sustainable backup power options should also be considered. ‘Replacing a data centre’s diesel gensets with modern and sustainable backup power options will reduce carbon footprint,’ says Eaton. The company’s grid-interactive EnergyAware UPS leverages connected energy storage to manage the flow of energy. It optimises energy use and reduces costs through demand response activities and supports the grid to allow a higher penetration of renewables. ‘Hydrogen fuel cells, energy storage systems and extended battery systems also provide reliable, safe and sustainable emergency power options,’ Eaton adds.

The company, together with Statkraft Europe’s largest generator of renewable energy, recently partnered with BloombergNEF on a study to identify and quantify the role data centres can play in the power sector’s transition to a low-carbon future.

Eaton’s research indicates that 42.3% of data centre operators are currently upgrading facilities and 38.6% are expanding capacity. In addition, 32.8% are focusing on improving the utilisation of IT assets such as the servers, storage and networking equipment that form the foundation of their operations. Although Eaton acknowledges that improving data centre performance ‘while simultaneously shrinking the environmental footprint of its operation is a major challenge’, it says there’s ‘good news’ for data centres when it comes to sustainability. This is largely due to the recent investments in always-on power that have put data centres of all sizes in a position to improve performance and open new business models. In addition, ‘a few additional steps can take them beyond efficiency so they can make a big impact on true data centre sustainability’, it claims.

AI to create power demand surge
However, data centres are to some extent handicapped by their obligations under the revised EU Energy Efficiency Directive (2023), which ‘significantly’ raised the EU’s ambition on energy efficiency. The Directive establishes ‘energy efficiency first’ as a fundamental principle of EU energy policy, giving it legal standing for the first time. ‘In practical terms, this means that energy efficiency must be considered by EU countries in all relevant policy and major investment decisions taken in the energy and non-energy sectors,’ according to the Directive. It introduced an obligation for member states to monitor the performance of data centres. Furthermore, a European database now collects and publishes performance data on the energy performance and sustainability of data centres.

AI is expected to play a critical role in shaping the future of the energy sector through enhanced automation. Major beneficiaries will include energy storage and grid management. Battery energy storage systems will become essential for enabling renewable power and AI enhanced automation can play a critical role in the effective management of its release into the grid.

Supporting the development of more flexible and connected energy system data centres, with their computing power and their physical infrastructure, can help to create a more sustainable energy future. As Karina Rigby, President, Critical Systems Division, Eaton EMEA says: ‘There are economic, regulatory and climate benefits to data centre flexibility and this report highlights the huge untapped potential. Therefore, we call for greater collaboration between grid operators, regulators as well as data centre operators and users, to unlock data centres’ grid stabilisation technology.’

Summing up
Digitalising Europe’s energy sector is fundamental to achieving the clean energy transition. To this end, a substantial part of the investments foreseen for the European energy system will go towards digitalisation. But there still remain difficult hurdles to clear. Inadequate data governance, cyber security concerns, lack of interoperability between systems, the potential for digital divide, concerns over data privacy from smart meters and IoT (Internet of Things) devices and the need for robust consumer protection measures, all remain to be overcome in order to avoid vulnerable groups being left behind without proper support and access to new technologies.

Care must also be taken to ensure that digitalisation does not create additional problems. As Clifford Chance noted in a report: ‘On the one hand, digital transformation is helping us reduce our carbon footprint in a variety of ways, through real-time monitoring of how much energy we are using at home. On the other hand, we need to ensure that those technologies do not consume more energy than they need to.’

• Further reading: 'Power hungry: How AI fuels data centre energy demand and calls for more sustainability’. Artificial intelligence is changing the game for data centres across the globe. However, its adoption is not simply about handling complex tasks faster, it consumes far more power and creates a surge in greenhouse gas emissions. As a result, tech giants are under pressure to make their vast data centres more energy efficient and sustainable in concert with rapid AI growth.
• In the context of the global energy price crisis and the government’s ambitious Climate Action Plan, the supply and security of energy in the Republic of Ireland is a controversial topic. The Energy Institute’s Ireland Branch Chair Owen McQuade reports on how representatives from across the country’s energy sector aim to reduce prices and increase security.