Artificial intelligence and the Internet of Things at the service of the energy transition

30 April 2024 | Knowledge, News

In 2023,[1] the share of energy from renewable sources in the EU’s electricity mix was 44%. However, its share in overall energy consumption was only 23%,[2] with demand continuing to grow. The Supreme Audit Office (NIK) report shows that in Poland, as much as 46% of low-voltage power lines are more than 40 years old, with half this number more than 50 years old, and 40% of medium-voltage lines are more than 40 years old.[3] The ageing infrastructure is one of the main reasons for the increasing number of refusals of requests to connect RES installations. The number of refusals is increasing, with more than 7,000 in 2022 alone.

Smart grid solutions and the realisation of RES development ambitions

These figures show that the development of RES requires not only a favourable regulatory environment (e.g. simplification of procedures for issuing the necessary decisions and support systems), but also the modernisation of electricity grids.

For this reason, Polish electricity distribution system operators (ETSO) have signed an agreement with the President of the Energy Regulatory Office (URE), committing to cooperate on, among other things, the digitalisation and automation of grids and grid services, in line with the EU’s energy system integration strategy.[4] Its main objectives are:

  • Extensive electrification of end-uses
  • Creating the conditions for large-scale connection of RES
  • The use of smart grid services to manage variable energy demand and supply, including the use of digital services, artificial intelligence and remote monitoring of distributed generation

New smart grid rules will accelerate RES development

New EU regulations

The new EU system regulation for the energy market[5] provides, among other things, for the introduction of flexibility services to enable the electricity system to adapt to the variability of energy generation and consumption. The detailed rules for the implementation of flexibility services will be determined by the electricity transmission system operator (ETSO) together with the regulatory authority (the President of the URE).

In order to determine the demand for electricity, dedicated metering devices will also be used, either attached to or embedded in an asset that sells demand response or flexibility services to transmission and distribution system operators.

There is also provision for the use of a peak shaving product through which market participants will enable the ETSO to reduce energy consumption during peak hours.

By 1 January 2025, national authorities, in cooperation with the ETSO and EDSO, will carry out an assessment of the adjustment of flexibility service solutions to the needs of the national electricity system.

New national regulations

The first legal regulations for flexibility services have already been introduced in the Polish Energy Law.[6]

Flexibility services can be provided to the EDSO by aggregators, active consumers, electricity producers and electricity storage owners. The EDSO will be obliged to purchase and use flexibility services, to co-operate with the ETSO in defining the rules of use and to specify them in the distribution network operation manual (IRiESD).

The President of the URE, for his part, is responsible for the issuance of guidelines and recommendations for the procurement of flexibility services. Currently, there are no detailed rules for the use of these services, which will be clarified in an ordinance.[7]

Importantly, existing legislation already provides solutions such as:

  • The obligation for the ETSO to digitalise the transmission system
  • The possibility to derogate from the obligation to submit the distribution/transmission network operation manuals to the President of the URE for approval
  • Agreeing on a development plan to meet current and future energy demand, the conditions for carrying out licensed activities or the submission of tariffs for approval to the extent necessary for the implementation of a project aimed at:
    • Implementation of innovative technologies, services or products
    • Models of cooperation between system users, technological or ICT solutions for the benefit of energy transformation, smart grids and infrastructure, development of local balancing and increase of efficiency in the use of existing energy infrastructure.

Electricity system operators already have the instruments to implement innovative network services, but by itself this is not enough.

On the EDSO side, there is the challenge of meeting the target of installing around 18 million smart meters by 2030,[8] or increasing cooperation with investors requesting connection (by increasing investment in network modernisation and enabling so-called commercial connection).[9] At the same time, investors in RES, including active consumers, are awaiting the setting of detailed rules for the use of flexibility services.

New technologies in the energy sector (smart grids)

A key element of energy transition is the digital transformation. It is tools such as artificial intelligence, 5G, cloud computing, edge computing and the Internet of Things (IoT) that enable the energy system to be transformed in a decentralised direction, integrating multiple actors (such as virtual prosumers) and multiple energy sources managed by digital tools.

We live in an era where business processes are in a constant state of flux, transformed by the increasingly widespread and intensive use of machine learning, artificial intelligence and the IoT.

AI-driven digital transformation is also becoming a reality in the energy sector, where the role of digital technologies, e.g. in the development of electricity grids, is increasing. Smart grids are an ideal example of using information technology to optimise energy production and supply, with advanced data analytics and measurement infrastructure enabling effective real-time monitoring, prediction and response.

Today’s smart grids are highly integrated, flexible and scalable, capable of detecting and responding to faults, switching power and seamlessly integrating a wide range of renewable energy sources.

The synergy of machine learning and artificial intelligence with data analytics (both in terms of scale and performance) is creating invaluable tools for prediction, analysis and response. Coupled with IoT sensors and devices to ensure data transfer, we will soon have software with unparalleled performance capabilities.

As with any innovation, however, there are risks involved, especially when it comes to data integrity or cybersecurity.

Digitalisation is a powerful technological resource that is transforming the energy system from analogue and centralised to decentralised clean energy chains. New IT tools will also be able to address current challenges, such as the remote monitoring of water and air pollution. Resource-efficient and human-friendly, a sustainable digital economy is on its way.


Date: 22.04.2024

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Natalia Kotłowska-Wochna

Aleksandra Pinkas


[1] Ember Climate European Electricity Review 2024

[2] Overall share of energy from renewable sources in 2022 [Eurostat data from December 2023]

[3] Supreme Audit Office, Information on Audit Results. Development of the Electricity Distribution Network, 2024

[4] Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Powering a climate-neutral economy: An EU Strategy for Energy System Integration (COM/2020/299 final)

[5] Proposal for a Regulation of the European Parliament and of the Council amending Regulations (EU) 2019/943 and (EU) 2019/942 as well as Directives (EU) 2018/2001 and (EU) 2019/944 to improve the Union’s electricity market design (COM/2023/148 final)

[6] Act of 28 July 2023 amending the Energy Law and certain other acts (Journal of Laws of 2023, item 1681).

[7] The Ordinance is expected to amend the existing Ordinance of the Minister of Climate and the Environment of 22 March 2023 on detailed conditions for the operation of the electricity system (Journal of Laws of 2023, item 819, as amended).

[8] Cf. Report of the President of the URE, Conditions for the undertaking and carrying out of electricity and gaseous fuel transmission, generation or distribution activities, and the implementation of development plans by electricity and gas system operators, taking into account the satisfaction of current and future demand for electricity and gaseous fuels, 2023.

[9]  Information No. 15/2024 of the President of the URE dated 22 March 2024 on the issues causing the most common doubts about grid connection.

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Natalia Kotłowska-Wochna

Natalia Kotłowska-Wochna

Attorney-at-Law / Head of New Tech M&A / NewTech Practice Group / Head of the Poznan Office

+48 606 689 185