Unlocking the Potential of High-Renewable Power Systems with Digital Technologies and Artificial Intelligence

The relationship between digitalisation and energy transition took prominence during the IRENA Innovation Week 2025, where discussions centred on the principle that there is no digitalisation without energy and no energy transition without digitalisation. With smart devices (e.g. phones, tablets) and the internet becoming the norm worldwide, more electricity is required to power the cloud services for the virtual world.

To ensure the electricity supplying this high demand comes from renewable energy sources, higher integration of renewable energy is needed in the electricity grids. With digital technologies, variable renewable energy (VRE) such as solar and wind – known for their intermittent nature – can supply power more consistently and sustainably. For solar photovoltaics (PV) and onshore wind particularly, digitalisation optimises performance and increases market competitiveness.

From demand and pricing forecasting, flexibility and smart grid management, to informing predictive maintenance of energy infrastructure, digital technologies are becoming indispensable for the global energy transitions. They enhance grid services by intelligently managing consumer electricity use, energy storage, and balancing supply and demand in different locations in real-time, achieving smooth grid operation that guarantees consistent supply of clean electricity at all time.

Enabled by AI, real-time performance monitoring and smart maintenance based on weather forecast and analysis allow operators to anticipate generation patterns and grid requirements with precision. This in turn can reduce operations and maintenance costs.

On the demand side, consumers also benefit from cost efficiency. Smart meters, dynamic pricing systems and Internet of Things (IoT)-enabled appliances support demand response programmes, allowing consumers to shift or reduce their electricity use in response to price signals.

Building on these demand-side innovations, advanced grid management systems can utilise digital twins and AI algorithms to forecast congestion, coordinate distributed energy resources, and optimise dispatch in near real-time. This coordination changes the traditional paradigm of renewables as unpredictable power sources, and position them instead as active contributors offering essential, sustainable grid services.

However, this synergy presents both opportunities and challenges. Rising energy demands from data centres that support AI introduces complexities for grid planning and expansion, requiring careful coordination between digital innovation and energy infrastructure development.

To understand the full scope of this challenge and potential solutions, Adrian Gonzalez, Program Officer in Innovation and End-Use Sectors at IRENA explores the energy implications of AI data centres in detail.

And the deployment of digital solutions remains uneven globally, with emerging markets lagging due to limited smart metres, low investment in infrastructure, and regulatory barriers preventing virtual power plants and behind-the-metre systems from market participation. Additionally, the lack of common technical standards and growing cybersecurity risks create significant barriers to widespread adoption. Addressing these gaps remains crucial to ensuring digitalisation can support a secure and rapid energy transitions.