Choose your region and language



Navigating the energy transition: Unlocking grid flexibility through digital technologies

By Massimo Danieli
31-05-2024 | 6 min read

The global energy sector is rapidly shifting to a new blueprint driven by the urgent need to include vast amounts of variable renewable energy sources, decentralized power generation, and the pressing need to reduce carbon emissions. In this landscape, flexibility is the cornerstone for the new power grid architecture and it also means that more digitalization solutions are needed to manage the overall energy system. 

Market flexibility is reshaping the dimensions of grid management, and technology advancements like artificial intelligence (AI) and other digital tools are accelerating the pace of change. At the core of this transformation lies a multidisciplinary approach, where expertise across grid technologies, market dynamics, and cross-disciplinary thinking converge to address the complexities of the energy transition.

Recently I sat down in conversation with our CEO Claudio Facchin to discuss how Hitachi Energy is bringing that cross-disciplinary thinking to bear. 

In this blog post, we will explore three key aspects of this transformation:

  1. Market flexibility adding to grid flexibility dimensions through digital technologies.
  2. The necessity for multidisciplinary collaboration and digital tools across grid technologies and markets.
  3. The acceleration and scale of technologies, to effectively manage risk.

Market flexibility adding to grid flexibility dimensions

In the past, power grids were structured around centralized, predictable power generation. The rise of variable renewable energy sources, primarily wind and solar power, along with battery energy storage systems (BESS) have introduced a new level of complexity into the grid. Market flexibility is now essential to complement grid flexibility, and digital tools are integral for managing both to assure reliability.

We’ve written before about the different dimensions of flexibility within the energy system. But the system will ultimately be as flexible as the market in which it operates – not just the flow of electrons, but also the flows of money and information.

In some places, such as Australia or Ontario, optimizing energy products like capacity or grid support needs to happen every five minutes. It’s essential when balancing the system, to make the most of the renewables alongside other sources of electricity generation. And with that, digital is the only way to handle the enormous amount of data behind the transactions.

Leveraging Digital Technologies

Digitalization is pivotal for orchestrating various flexibility mechanisms such as battery storage, interconnectors, and demand-side response. However, to fully harness these opportunities, the access to, processing of, and sharing of energy data must be seamless and secure. The European Union's action plan for digitalizing the energy system will soon establish a common European energy data space. By 2050, this framework is expected to facilitate the participation of over 580 GW of flexible energy resources in the wholesale markets.

Market flexibility hinges on highly-efficient electricity markets that ensure low-carbon generation assets operate with minimal curtailment. Here, the software and systems that manage bids and offers across large regions while considering grid constraints play a pivotal role. The emerging flexibility markets are also offering smaller and more distributed assets the ability to participate, empowering them to relieve capacity and congestion constraints These flexibility markets and other utility demand response programs offer commercial and industrial entities, and even residential customers the opportunity to monetize their renewable generation, storage and controllable demand while providing flexibility to operate networks securely and economically. 

Advanced analytics and simulation tools are crucial for accurate short-, medium-, and long-term planning. Probabilistic simulations, for example, enable system operators to understand how the power system reacts under various scenarios, allowing them to calculate the risk of unmet loads. For example, as distribution and consumption patterns change, more energy management and optimization solutions are needed. 

Multi-disciplinary work across grid technologies and markets

The accelerating pace of technological change demands cross-disciplinary thinking and know-how. We must redefine talent profiles and cultivate a new breed of professionals who understand the complete environment—across power systems, advanced computing, and digital technologies.

It's not just one technology or one thing that you need to master. Finding people with that mix of skills, people who can see problems from the perspective of more than one discipline, can be challenging - but they’re the heart of the teams we need to build for the future.

Collaboration Across Stakeholders

The energy transition necessitates collaboration across stakeholders, including businesses, governments, and educational institutions. We must ensure that new talents are equipped with a multidisciplinary skill set, combining expertise in power systems and digital solutions. 

Partnerships between technology providers, governments, and universities are critical in creating new opportunities.

We need the people element, we need the talent, and we will generate, with diverse teams, a lot of innovation.

Claudio Facchin

Technology innovation and grid flexibility

Technological advancements like AI and machine learning (ML) are revolutionizing grid management. They enable real-time monitoring and forecasting, allowing system operators to take proactive actions in maintaining grid stability.

  • Forecasting needs: Renewable production forecasts have improved significantly with AI and ML, enabling large technology companies that are producing their own renewable energy to increase the financial value of wind power by 20%.
  • Efficient power delivery: AI and ML embedded within scheduling algorithms coordinate the dispatch of generation, distributed energy resources, and grid topology changes.


Maintaining visibility of what is happening on the power network, identifying threats to system stability and security quickly, and taking fast proactive and corrective actions consistently are also considered priorities for system operators.

Accelerating technology changes and managing risks

The rapid acceleration of digital technologies brings both opportunities and risks. AI has the potential to streamline grid operations but poses challenges like "AI hallucinations," where models can provide misleading or inaccurate predictions.

Managing Risks

Ensuring the security and reliability of critical infrastructure requires elevated risk management strategies:

  • Avoiding AI hallucinations: Algorithms should be rigorously validated to prevent incorrect forecasts that could destabilize grid operations.
  • Cybersecurity: As the grid becomes more digitalized, protecting it against cyber threats is imperative. Digital twins and secure data-sharing frameworks can help mitigate these risks.


Accelerating innovation

Power electronics and digital technologies are fundamental enablers of a flexible, low-carbon power system. The combination of power electronics (PE) with digital technologies offers significant benefits:

  • PE systems: Supervised and controlled by digital controllers, power electronics systems perform millions of calculations per second using measured inputs thousands of times per second.
  • Advanced analytics: AI, ML, and advanced analytics enable efficient planning, forecasting, trading, monitoring, and operations.

Artificial intelligence, machine learning, and advanced analytics bring the next level of customer experience when it comes to tasks such as planning, forecasting, trading, monitoring, and operations.

Hitachi Energy-WindEurope Report 


The energy transition presents an unprecedented opportunity to revolutionize the global power grid. Market flexibility and grid flexibility are becoming deeply intertwined, requiring innovative digital technologies to manage the growing complexities. Multidisciplinary collaboration across stakeholders is essential for addressing the challenges ahead and nurturing the necessary talent.

Technological changes, especially within the digital sphere, are accelerating, offering new ways to manage grid complexity while introducing risks that must be effectively controlled. By leveraging the power of digital technologies and power electronics, we can ensure a more connected, intelligent, and resilient energy future.

Together, let's harness the power of multidisciplinary thinking, digital innovation, and collaboration to advance a sustainable energy future for all.

    Massimo Danieli
    Executive Vice President, Managing Director, BU Grid Automation, Hitachi Energy
    About the author

    Massimo Danieli is an Executive Vice President and the Managing Director of the Grid Automation Business Unit at Hitachi Energy.

    He joined Hitachi Energy’s predecessor in 1992, holding several management roles across multiple markets. Prior to taking on his current role, he was the Global Business Unit Manager for the former Power Generation Business Unit between 2013 and 2015.

    Massimo holds a degree in Electrical Engineering from Politecnico di Milano, Italy.

    Windmill engineers inspection and progress check wind turbine

    Get more #Perspectives on the energy transition