Digitalisation and AI: Gamechangers for the Energy Transition​

Digitalisation and AI are reshaping global energy systems, from how energy is produced to how it’s delivered, used, and managed.

By 2050, electricity is expected to make up 52% of all energy use. Digital solutions are becoming essential for handling this growth and keeping energy reliable and affordable by cutting costs, strengthening energy security and enabling greater integration of renewables.

IRENA's framework groups digital solutions into five value clusters: monitoring, forecasting, operational optimisation, end-user automation and transparency.

Each cluster focuses on a specific part of power system digitalisation, from collecting data to improving governance and decision-making.

These clusters give policymakers and grid operators a roadmap to prioritise investments and adopt solutions that deliver clear, measurable benefits.

Predictive maintenance, real-time monitoring and AI-enabled asset management are improving operational efficiency across power system assets, lowering costs and extending lifetimes.

These capabilities can help solar PV and wind optimise performance, while advanced forecasting and grid services align variable generation with system needs.

Smart meters, dynamic pricing, and IoT- enabled devices help consumers shift or reduce electricity use based on price signals. This smooths demand peaks, reduces grid stress, and supports renewable integration.

At the system level, digital twins and AI help grid operators forecast congestion, coordinate distributed energy resources, and balance supply and demand in real time. 

Together, these tools enable power systems to operate more efficiently while integrating higher shares of variable renewable energy.

*Excerpt of Table 2.1, view the full table: Digitalisation and AI for power system transformation: Perspectives for the G7

AI and digitalisation offer emerging markets and developing economies (EMDEs) the opportunity to rapidly modernise their power systems without inheriting the outdated infrastructure challenges faced by many advanced economies.

Investing in modernised grids and digital infrastructure can unlock significant opportunities for energy access and economic development in EMDEs. Some countries already use innovative business models like pay-as-you-go systems and mobile-enabled smart meters to rapidly expand clean electricity access.

Scaling digital solutions requires policy alignment across developed, emerging, and developing markets.

Value clusters help policy makers to assess power systems and identify gaps. New investment models should be promoted, particularly for EMDEs where tailored approaches are needed.

Global coordination on cybersecurity and cross-border data governance remains critical. Strategies must align across transmission, distribution, and end-use, with clear guidelines for emerging technologies that protect infrastructure without slowing progress.

A shortage of skilled professionals in digitalisation and AI remains a critical barrier to power system transformation, limiting the pace at which countries can deploy and manage new technologies.

Upskilling and re-skilling programmes that are locally tailored, digitally focused and inclusive are essential to build a workforce ready for the energy transition.

Initiatives like IRENA's Call to Action on Skilling for the Energy Transition and regional capacity-building programmes can connect expertise across borders and strengthening local workforce development.

An integrated approach focused on the benefits delivered by digitalisation to digitalisation is needed, aligning financial incentives, regulatory frameworks, and workforce development to reduce uncertainty and drive innovation.

Digital solutions should be built into power systems from the start, developed alongside physical infrastructure and long-term energy planning to ensure all countries benefit.

Together, these efforts can unlock the full potential of digitalisation: cutting costs, strengthening reliability, integrating more renewables, and ensuring all countries benefit from the power system transformation.