Digitalisation in the Energy Sector: Chances and opportunities for climate action

Research trip participants; Photo: @GIZ 2018

Research trip participants; Photo: @GIZ 2018

When it comes to implementing climate action targets, the energy sector plays a key role – including in Mexico. The International Climate Initiative (IKI) project “Enhancing the Coherence of Climate and Energy Policies in Mexico” supports Mexico’s Ministry of Energy (Secretaría de Energía, SENER) and Ministry of the Environment (Secretaría de Medio Ambiente y Recursos Naturales, SEMARNAT) in its efforts to integrate climate and energy policies to achieve the country’s nationally determined contributions (NDCs). Digitalisation of the energy sector in particular offers promising approaches for climate action in both, Mexico and Germany, who are engaged in a lively exchange about this topic in the framework of this IKI project.

Mexico is clearly committed to climate action. Through its energy reforms and Energy Transition Law, the government has created the conditions needed to accelerate climate-friendly transformation of the energy sector and increase the clean energy share in electricity generation to 35 percent by 2024. With its NDC submitted in 2015, Mexico declared its willingness internationally to reduce its greenhouse gas emissions by 22 percent compared with business as usual (BAU), and by 36 percent with international support.

How this transformation might be achieved, and what kind of contribution digitalisation in the energy sector can make in mitigating climate change, were the focus of a research trip to Germany conducted by Mexican energy experts in September 2018. In mid-October 2018, these topics were also discussed at an international forum held in Mexico City.

Research trip participants visit the European Energy Forum (EUREF) Campus in Berlin; Photo: @GIZ 2018Research trip to Germany

In preparation for the international forum, a research trip to Germany was conducted in September, with 16 participants from various Mexican government authorities and start-ups. Among the highlights of the trip were visits to the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU), the Federal Ministry for Economic Affairs and Energy (BMWi), the Federal Environmental Agency (UBA), the Spin Lab start-up accelerator in Leipzig and a business event hosted by the Mexican Embassy.

Digitalisation and climate action: International forum weighs chances and opportunities

At the invitation of the IKI project team, 150 decision-makers from government and administration, the research community and the private sector gathered in Mexico City in October to discuss the chances and opportunities for climate action coming from digitalisation in the energy sector. Mexican and international energy and climate change experts as well as representatives from research institutes and private industry gave impulse presentations on current trends concerning digitalisation in the energy sector. In joint workshops on the topics of smart grids (intelligent transmission and distribution networks), smart markets (digital solutions for integrated supply and demand in markets with large shares of variable renewable energy sources) and energy efficiency, participants came up with a wide range of ideas on how new digitalisation technologies can improve renewable energy use, promote energy savings and contribute to achieving a better climate balance. The proposals ranged from using optimised forecasting tools for electricity generation, to decentralised electricity trading using blockchain applications, to creating a Mexican-German start-up platform. Discussions regarding key digital technologies in the energy efficiency sector and their use in pilot projects also proved extremely promising.

Panel discussion on reforming the energy sector in Mexico; Photo: @GIZ 2018

During the talks, it also became clear that the much-needed decarbonisation of the energy sector poses a huge challenge for both Germany and Mexico, and that it can only be achieved by means of cross-sectoral collaboration with private industry.