Digitalization of Sweden's energy system
Energy supply is one of the most critical issues facing society today. With a sharp increase in energy demand and an outdated electricity grid infrastructure, Sweden faces major challenges. Digitization of the energy sector could be the key solution, but obstacles remain.
What will it take to overcome these barriers, and what benefits can digitalization bring? It is time to take the discussion seriously.
Sweden is facing an energy crisis. Despite the major investments in renewable energy sources, such as solar cells and wind power, the infrastructure of our electricity networks is insufficient to meet the increased load. How can we meet the needs when we neither produce enough electricity nor have an electricity grid that can handle the new conditions?
Challenges and needs for digitalization
Swedish energy companies have started updating their electricity networks, but replacing infrastructure is not done overnight and is costly. For example, utilities will need to update their network substations, also known as distribution substations, in the first quarter of 2025 to meet increasing energy management and security requirements. These stations act as hubs in the electricity grid where electricity is redistributed from high-voltage lines to lower voltages for distribution to households and businesses. The updates are critical to manage the increasing share of renewable energy, secure supply and improve the efficiency of the electricity grid.
Much of the work currently done manually - such as measurements and calculations - could be largely streamlined through digitization. By installing new sensors, as well as other new and innovative technologies, in electricity grids, utilities can measure loads in real time to immediately redistribute energy to where it is needed most. This would not only make energy distribution more agile and much more efficient, but also contribute to lower costs and a more sustainable energy system.
One example of the potential of digitalization is how it could reduce dependence on new energy production. Instead of constantly having to produce more electricity, digital tools can help us make better use of the energy we already have. This is particularly important at a time when energy prices are rising and the environmental impact of energy production is a major concern.
The fourth industrial revolution - a solution to the energy crisis?
We are in the midst of the fourth industrial revolution, where technologies such as AI and IoT are changing the way we produce and consume energy. Digitalization can give us the tools to predict weather conditions and adapt renewable energy production accordingly. Today, this is done almost exclusively based on historical data, but with the help of real-time information and predictive analytics, we can become more proactive and reduce dependence on fossil fuels and imported so-called 'dirty' electricity.
Sweden also has EU-level obligations to supply electricity to other countries, such as Germany and Denmark, which further strains our already strained electricity system. We are forced to buy back electricity, often of poorer quality from an environmental perspective, at high costs for both households and businesses. By digitalize our electricity grids, we can better manage our own electricity production and thus reduce our dependence on imported electricity.
New contract types and more flexibility for consumers
Another major benefit of digitization is the ability to offer more flexible contracts to consumers. With the right metering data, energy companies can create dynamic pricing models where customers can actually benefit from cheaper electricity at low load. This would both save money and also contribute to more sustainable energy consumption. Once the substation upgrades are complete, digitization can help further optimize production and capacity, thus removing bottlenecks that hinder the efficient flow of energy.
Sweden must act: not tomorrow or later but now
It is clear that Sweden's energy system must be modernized and digitized if we are to meet the demands of the future. The investments that have been made so far, for example in skills enhancement, are a step in the right direction, but they are not nearly enough. All energy companies face the same challenges in upgrading their electricity networks, and this is one of the most important societal issues we have to deal with.
In the energy sector, there are concrete examples set by leading players, such as those from Japan and Switzerland, from which Sweden can draw inspiration (see below). These examples show the importance of digitalization and the many benefits it can bring. It is not only about addressing today's challenges, but also about securing the energy supply of the future. We can no longer postpone necessary investments in our electricity grid and energy production.
- Cosmo Energy[1], Japan: By doubling its IT investments and training 7,000 employees, Cosmo Energy has improved its energy management and distribution, leading to more efficient use of resources and optimization of energy distribution processes.
- IWB[2], Switzerland: IWB has implemented a machine learning system that predicts solar power generation in real time. This system is updated every 15 minutes and improves the accuracy of energy predictions, optimizing power generation from renewable sources.
These examples show how digitalization contributes to meeting the challenges of the energy sector and ensuring long-term sustainability.
Conclusion - digitalization is the key to a sustainable future
The digitization of Sweden's energy system is not just a technical issue, it is a crucial societal issue. By overcoming the obstacles that exist today, we can create a more sustainable, efficient and cost-effective energy system that not only meets our own needs, but also helps Sweden take the lead in the transition to renewable energy. It is time that we take the debate seriously and drive the change.
[1] Cosmo Energy: Alliance to save energy (https://www.ase.org/blog/what-could-digitalization-achieve-power-sector)
[2] IWB: Techstack Companу (https://tech-stack.com/blog/digital-transformation-in-the-energy-industry/)
