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Digital Future Offers Opportunities and Threats, IEA Report Says

Digital technologies could transform the global energy system, making it more connected, reliable, and sustainable. Technologies will have a "profound and lasting impact" on both energy demand and supply, according to a report by the International Energy Agency.
The report says that more than 1 billion households and 11 billion smart appliances could join interconnected electricity systems by 2040, thanks to smart meters and connected devices. 
Such connectivity would allow homes to choose when and how much electricity they draw from the grid. What's more ,demand-side responses in building, industry, and transport could provide 185 GW of flexibility, and avoid $270 billion of investment in electricity infrastructure.
With the help of smart thermostats, smart lighting, and other digital tools, buildings could reduce their energy use by 10% by using real-time data to improve operational efficiency, the report says. Meanwhile, large data sets, near-universal connectivity, and rapid progress in Artificial Intelligence and machine learning are enabling new applications and business models across the energy system, from autonomous cars and shared mobility to 3D printing and connected appliances.
The same transformation is taking place in how energy is produced, ranging from smart oil fields to interconnected grids, and increasingly, renewable power. Digital technologies could help integrate higher shares of variable renewables into the grid by better matching energy demand to solar and wind supplies, the report says.
Energy supply sectors also stand to gain from greater productivity and efficiency, as well as improved safety for workers.
“Digitalization is blurring the lines between supply and demand,” says IEA Executive Director Dr Fatih Birol. “The electricity sector and smart grids are at the center of this transformation, but ultimately all sectors across both energy supply and demand – households, transport and industry – will be affected.”
Digitalization raises new security and privacy risks, as well as disrups markets, businesses and employment. While the growth of the Internet of Things could bring about significant benefits in terms of energy efficiency to households and industries, it also increases the range of energy targets for cyber-attacks. Such attacks have had limited impact so far, but they are also becoming cheaper and easier to organize, the IEA report says.
Caption: A report from IEA says that more than 1 billion households and 11 billion smart appliances could join interconnected electricity systems by 2040. Image credit: Flickr

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