The global energy landscape is undergoing a rapid transformation as the age of electrification takes hold and the runway growth of artificial intelligence introduces new challenges and possibilities for energy production and use, as well as the ways that our power grids operate. As a result, an increasingly complex nexus is emerging at the intersection of digitalisation, artificial intelligence and grid flexibility that could be make-or-break for the future of energy security.
The issue is not that we don’t have the technology to keep up with the rapid digitalization and development of the energy sector, but that our regulatory processes and policy systems lag far behind tech deployment, according to Elena Boskov-Kovacs, co-founder and managing director of Vienna-based Blueprint Energy Solutions.
“There’s a mismatch in speed rather than a gap in technology – in making digital solutions useful and deployable quick enough to keep pace with the physical transformation of the grid,” Boskov-Kovacs was recently quoted in a report for Enlit, a Dutch news outlet covering the energy transition.
“Solar, EVs, heat pumps and other distributed assets are connecting to the LV grid much faster than the planning and regulatory processes around them were designed to handle,” Boskov-Kovacs went on to say. “And that is creating very practical concerns for system operators: unobservability at the edge of the grid, limited hosting capacity, congestion and ultimately the risk of blackouts and security-of-supply issues.”
Concerns about energy security and regulation in the European energy sector are particularly pressing as the continent continues to navigate its third energy crisis in four years while European leaders wonder hand-wringing whether the next one is just around the corner.
When Russia invaded Ukraine in February of 2022, Europe depended on Russia for a whopping 40 percent of its natural gas, throwing European energy markets into chaos and sending energy prices soaring as the European Union struggled to set and maintain sanctions on Russian energy exports. Europe has never fully recovered from that shock, as it has since been battered by conflicts blocking the passage of the Red Sea in 2023 and 2024, and now the United States and Israel’s war in Iran. And as if these geopolitical shockwaves weren’t enough, Europe is now the most rapidly warming continent in the world, causing an unprecedented climate-related energy crisis in the region.
Europe’s continued vulnerability to seemingly endless global oil and gas supply chain shocks reminiscent of a geopolitically fraught Groundhog Day has left European leaders feeling desperate to get ahead of the next (inevitable) crisis. “We swore we’d learn. We promised things would change but here we are,” a ‘highly frustrated European diplomat’ was (anonymously) quoted by the BBC earlier this year in response to market turmoil driven by Iran’s closure of the Strait of Hormuz.
“Instead of concentrating on much-needed long-term plans – about how to make Europe more competitive in this increasingly volatile world, [European] prime ministers and presidents are now in a panic over [energy] prices, worried about angry voters and scrambling for short-term solutions,” the source went on to say. “Just like the crisis after Russia’s fullscale invasion of Ukraine. Different conflict. Same European divisions; same dilemmas over energy. We can’t keep going round in these circles. Something’s got to give.”
But Europe has made considerable progress toward building up alternative and clean energy supply chains in the wake of Russia’s 2022 invasion of Ukraine. Solar power capacity has been added at a rapid clip, energy storage development is on the rise, and new trade relationships have been formed. But now the question is whether Europe has electrified and digitalized its grid too quickly, leaving critical energy security gaps, as exemplified by the massive grid failure across Spain and Portugal in 2025.
While it is a huge part of the problem in terms of skyrocketing energy demand, artificial intelligence could be an integral part of the solution to this issue. AI models can much more quickly and accurately detect and predict grid vulnerabilities, and can help to manage the increasingly complex inflows and outflows to the grid as intermittent energy sources become the norm.
“AI can find patterns in all of that complexity and turn them into forecasts and, ultimately, decisions,” remarks Boskov-Kovacs. “And that has a very practical economic consequence. Better forecasting and optimisation can reduce congestion and improve the use of existing network capacity, reducing the need for unnecessary investment and that creates more room in utility budgets for the network reinforcement that we genuinely do need.”
Therefore, she argues that the next step in the European Union’s energy strategy needs to incentivize and regulate a strategic deployment of AI and a better, more flexible and deft response to the rapid spread of digitalization. This will necessarily include much stronger cybersecurity measures, in addition to infrastructural updates to allow faster connection and integration of new technologies. The rapid transformation and digitalization of the sector is already happening and cannot be responsibility regulated away; now it’s up to the European Commission to keep up.
By Haley Zaremba for Oilprice.com
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