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The recent Iberian power outage has highlighted the need for the EU to take bold, decisive action to enhance its energy resilience, move further away from fossil fuels and reduce its dependence on external energy. 

This particular power outage impacted critical infrastructure such as hospitals, traffic signals and manufacturing plants, as well as internet and phone services and public transport, among other things. 

Although the exact cause of the outage is still under investigation, initial estimates suggest that it seems to have been triggered by a loss of power from several generation units, which eventually led to overall grid instability. 

As the first-ever EU-UK summit kicks off this week, Gwenaelle Avice Huet, executive vice president of European Operations at Schneider Electric, highlights the importance of grid infrastructure modernisation and energy management in bolstering the EU’s energy resilience. 

Why is grid digitisation so important for the EU’s energy resilience?

Huet highlights that although transitioning to renewables is still important for the EU, better grid digitalisation is the need of the hour to strengthen the bloc’s future energy position and ensure its flexibility. This is especially since the technology to better manage fluctuations during unexpected events already exists, but it needs to be implemented more efficiently. 

Huet said: “Today, 40% of Europe’s grid is older than 40 years old. It is reaching the end of its lifecycle, and so we urgently need to move faster with modernising and digitising existing grid infrastructure, and improving its interconnectedness.” 

She added: “According to the European Commission, approximately €584bn in grid investment is required by the end of this decade, in order to stay on track for energy transition goals for electrification.”

Two urgent actions need to be taken for this modernisation, namely, a push for more demand-side flexibility and reinforcing electricity grids through infrastructure investment and digitalisation.  

The EU also needs to work on implementing the appropriate incentives and legislation to ensure that existing grid technology is utilised to the maximum. 

Regarding digitalisation of the grid, Huet noted: “The technology is at our disposal to make this a reality.  This includes advanced technologies that can self-heal. They manage and optimize electrical distribution grids and automate outage restoration, as well as tools that can monitor, control, and optimize distributed energy resources.”

She also pointed out that while the investments required to do so may be substantial, the cost of inaction could be even greater. 

The success of a clean electricity system depends on advanced storage, smart grids and a diverse energy mix, highlighting the need for the EU to invest significantly in these areas at the earliest. 

How can businesses and industries better handle power outages?

One of the main ways businesses and industries can protect themselves better against unexpected power outages is by participating in demand response programs and optimising their energy usage. 

This can mainly be done by employing demand-side flexibility, which can help industries activity adjust and manage their electricity consumption in response to grid signals. As a result, businesses can actively manage their energy usage instead of simply being passive consumers. This process can help slash costs while still maintaining efficiency and quality of services and processes. 

“This is particularly valuable during peak periods, and makes it possible for industries to gain greater control and build genuine resilience. Consumers are already incentivized to lower their energy usage, and industries can benefit financially too from adopting a more proactive approach,” Huet said. 

She further elaborated: “Strategically shifting non-critical loads, utilising on-site generation during peak demand or grid stress, and deploying energy storage to navigate short outages all result in industries being able to make financial savings whilst strengthening resiliency.”

Costs can be further reduced by moving consumption to off-peak hours and decreasing the need for new generation capacity. This move can ultimately help businesses feel more in control and prepared in case of unexpected outages. 

By focusing more on proactive energy management strategies, the anxiety and uncertainty associated with these events can also decline significantly. 

During the Iberian outage, some key infrastructure such as certain logistics centres and offices were able to stay functional mainly because they had already automated their load management with predefined decision protocols in case of power failures. 

This meant that vital systems were assured that power supply would be continuous, from thoroughly pre-tested backup energy sources. Advanced simulations which stress-tested possible intervention areas and real-time system modelling also helped these entities maintain operations. 

“Taking this proactive approach a step further, microgrids with on-site generation, storage, and intelligent energy management offer industry the capability to operate independently in “island mode,” guaranteeing continued functionality,” explained Huet. 

Businesses can also ensure they hire appropriate talent, especially when it comes to digital skills and technologies such as data analytics and artificial intelligence, to make sure that they have the right staff to help them through unexpected crises. 

Much of this can be done through targeted training programmes, workshops, outreach programmes and community events, in partnership with the EU and academic institutions. 

The EU can also support businesses by working on ways to help them adapt energy usage in real time. 

How can the EU reduce its dependence on external critical materials?

The EU has already made significant strides in decreasing its dependence on foreign countries and regions for critical materials, with the Critical Raw Materials Act, helping the bloc have some strategic autonomy over resources. 

However, significant challenges remain when it comes to greater critical materials and energy independence. Greater collaboration and support between member states, the European Commission and industry is likely to be required in order for the bloc to ramp up its domestic critical materials production facilities. 

“The EU can reduce dependency on other regions for critical materials further by accelerating its move to a circular economy. Investing in cleaner and circular production methods under the Clean Industrial Deal will bolster innovation on European soil. Industry needs to be incentivized to produce more products where they are sold,” Huet highlighted. 

A multi-hub strategy can help support strong, localised supply chains, which in turn can reduce disruption from outside factors like worldwide trade issues.