Telia deal marks drive for energy sector digitalization

A decade ago, smart grids were seen as a burgeoning opportunity for telcos. The smart grid sector, however, did not take off worldwide as quickly as hoped, and nor did telco contract wins. But as renewable electricity becomes increasingly central to countries’ energy security, particularly in Europe, energy network digitization is once again an important focus for the industry.

It is against this backdrop that Telia Sweden and its IT services arm, Telia Cygate, have won a contract to provide and manage the new data network infrastructure for Swedish electricity network operator, Ellevio. Under the 10-year contract, Telia Sweden and Telia Cygate will support the build-out of Ellevio’s smart grid by connecting the 8,000 electrical substations to Ellevio’s data center. The delivery of the data network infrastructure covers a network management system and netw

ork equipment, as well as design, implementation, operations and continuous development.

Smart grids play an essential role in the efficient and flexible management and distribution of renewable energy sources such as solar and wind power, which vary in availability, and can be geographically scattered. Unlike traditional grids, which were built for consistent supplies of energy from fossil-fuels, smart grids enable a two-way exchange of data, which when combined with AI and predictive analytics allow renewable energy producers to automatically provide information from sensors about local climate and environmental conditions that impact energy production. At the same time energy companies can automatically gather and feed into the grid information from smart meters about localized energy demand.

But this requires extensive IoT networks capable of rapidly capturing and analyzing data from thousands of sensors across homes, renewable energy producers and the grid.

“Building a modern electricity grid, which enables more capacity and higher electricity consumption, with fewer and shorter disruptions, requires us to make big investments in modern, digital technology. The partnership with Telia is an important investment in the future and the first of its kind, digitalizing and automating network operations on a large scale,” said Johan Lindehag, CEO at Ellevio, quoted in the Telia press release.

The International Energy Agency (IEA) has called for investment in smart grids to more than double through to 2030 if countries are to achieve Net Zero Emission targets by 2050, especially in emerging markets and developing economies.

The energy distribution sector accounts for around 75% of all investment in digital infrastructure, according to the IEA, which recently produced reports on smart grids and digitalization in the energy sector. The agency recommends that “transmission and distribution system operators should continue facilitating the adoption of novel assets”. These include technical options such as: “distributed energy resource management systems, edge control devices, advanced voltage and reactive power controls, network digital twins, artificial intelligence and robots and drones for more efficient operation and management, closed-loop operations, and non-wire alternatives such as flexibility services and distributed stand-alone storage systems.”

The energy industry has a long way to go in capturing and making better use of data. The IEA states: “it is estimated that utilities are currently leveraging only around 2-4% of data collected" – an area where hyperscalers already see a role for themselves. Nonetheless, Telia’s win points to the potential of telcos to carve out a position in the energy industry’s digital transformation.

“The electrification of society is one of the big paradigms shifts of our time and is key to both the sustainable transformation of society and our competitiveness as a nation.,” says Anders Olsson, CEO for Telia Sweden.

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