Europe's Energy Evolution: Modernizing Power with Smart Grids & Renewables

Role: Chief Technology Officer

Industry: Power & Utilities in Europe

Situation:

Leading technological advancements for a major power and utilities company in Europe, focusing on smart grid technology and renewable energy integration. The industry is undergoing a transformation with increased focus on sustainability and decentralization of power generation. The company has a solid infrastructure but faces challenges in modernizing outdated systems and integrating new technologies. Internally, there is resistance to adopting new technologies and a skills gap in emerging tech areas. Strategic initiatives include investing in smart grid technologies, enhancing cybersecurity measures, and upskilling the workforce.

Question to Marcus:

“

What steps should we take to modernize our technology infrastructure and integrate new energy solutions effectively?

Digital Transformation

In Europe’s power sector, digital transformation must be anchored to operational outcomes: higher hosting capacity for renewables, lower curtailment, faster fault detection, and optimized asset utilization. Start with targeted pilots (DER orchestration, digital twin for a constrained feeder, predictive maintenance on critical transformers) that demonstrate clear KPIs and short payback.

Adopt an API-first, modular architecture so new modules (DERMS, VPP interfaces, market gateways) can plug into legacy SCADA/DMS without rip-and-replace. Embrace hybrid cloud + edge: cloud for analytics and market interaction, edge for low-latency control and resilience. Use standards (IEC 61850, CIM, DLMS) to avoid vendor lock-in and accelerate interoperability with DSOs/TSOs and aggregators. Build product-minded teams (cross-functional squads owning outcomes) and implement a three-horizon investment roadmap aligning regulatory windows (grid codes, flexibility markets) with CAPEX cycles. Track ROI in operational KPIs (minutes-to-restore, hosting capacity, avoided reinforcement) and financial KPIs (OPEX reduction, deferred CAPEX). Finally, structure partnerships with vendors and startups under milestone-based contracts to derisk delivery while keeping intellectual control over critical interfaces and data.

Cyber Security

European utilities must treat cybersecurity as a core grid-stability issue, not an IT checkbox. Align quickly with NIS2, IEC 62443 and ISO 27001 requirements and ensure OT/IT segmentation with strict identity and access management (zero trust where practical).

Inventory and classify assets (including long-lived field devices and third-party-managed relays); that inventory drives patching, compensating controls, and prioritized monitoring. Establish a dedicated SOC for energy systems or partner with an energy-focused Managed Detection & Response provider with OT expertise; integrate threat intelligence sharing via national ISACs and ENISA channels. Enforce secure device lifecycle management for smart meters, inverters and RTUs—secure onboarding, firmware attestation, and supply-chain risk assessment. Design incident response playbooks with DSOs/TSOs and regulators, and rehearse them with war-gaming across operations, legal and communications. Finally, make cybersecurity part of procurement (security SLAs, continuous compliance) and workforce KPIs (training completion, tabletop performance) so it’s embedded into operational decision-making rather than an afterthought.

Renewable Energy

Integrating higher shares of wind, solar and hybrid plants demands active management across planning, operations and market interfaces. Prioritize investments that maximize effective hosting capacity: targeted grid reinforcements at identified bottlenecks, active network management (curtailment minimization via DERMS), and co-located storage to smooth intraday variability and provide ancillary services.

Use probabilistic forecasting (weather + asset-level availability) to reduce reserve requirements and increase market participation; link forecasts to automated dispatch and market bidding engines for PPAs and balancing markets. Work with regulators and DSOs to pilot flexibility markets and dynamic tariffs to incentivize demand response and behind-the-meter storage. For offshore wind and large solar farms, insist on standardized interfaces and SCADA integration to streamline balancing and contingency management. Consider hybrid procurement (capex + contract) for storage to balance capital constraints with flexibility needs, and use auctions where possible to secure competitive pricing while meeting intermittency objectives.

Utilities Industry

As a European utility CTO, navigate a landscape shaped by DSO/TSO unbundling, stricter grid codes and accelerating decentralization. Coordinate architecture and operational changes with your regional DSO/TSO, balancing local hosting capacity upgrades against system-level reinforcement plans.

Embed regulatory timing into technology roadmaps: use periods of regulatory review to propose pilot sandboxes or recoverable investments for smart grid pilots. Leverage EU funding instruments (Connecting Europe Facility, Innovation Fund, regional development grants) to de-risk trials and co-finance cross-border interoperability efforts. Reassess tariff and asset life assumptions—digital investments often shift value from CAPEX-intensive reinforcement to OPEX and software-enabled flexibility; price models must reflect that to secure returns. Build collaborative procurement frameworks with neighboring utilities to scale purchasing of smart devices and services, lowering unit costs and fostering common standards across the region.

Internet of Things

IoT is the enabler of visibility and control for a smarter grid but must be executed with industrial rigor. Deploy tiered device strategies: high-assurance devices (IEC 61850/IEC 62351 compliant) for protection and control; lower-cost, secure meters and line sensors for visibility.

Prioritize secure device identity, over-the-air firmware management and lifecycle traceability to manage 15–25 year field lifespans typical in utilities. Use narrowband IoT/LTE-M/cellular where last-mile cellular is reliable, and private LPWAN or private LTE for critical assets requiring dedicated QoS. Process telemetry at the edge to reduce bandwidth and latency for protective functions while forwarding harmonized telemetry to cloud platforms for fleet analytics and forecasting. Set strict data models (CIM) and messaging standards so sensor data can feed DMS/DERMS and market platforms without bespoke integrations. Finally, plan for massive scale: vendor selection should include proven device provisioning, remote management and support for phased upgrades.

IT Strategy

Your IT strategy must explicitly bridge legacy operational systems and new energy market demands. Define a clear target operating model: which capabilities remain core (real-time control, safety-critical OT), which move to cloud (analytics, trading, billing), and which are sourced as managed services (cyber SOC, SaaS GIS).

Prioritize projects with the highest operational leverage—DERMS, OMS/DMS upgrades, digital twin—sequenced to reduce operational risk and align with regulatory windows. Adopt a vendor portfolio approach: core system suppliers under long-term agreements, cloud/native vendors for analytics, and startups for rapid pilots under sandboxed contracts. Implement governance that measures outcomes (hosting capacity, outage minutes, margin from flexibility markets) not just deliverables. Budget for data platform and APIs early—many modernization failures are integration failures. Finally, align IT procurement cycles with asset lifecycles and create a capital allocation framework that balances deferred reinforcement against digital alternatives.

Enterprise Architecture

Modernization requires an enterprise architecture that enables incremental replacement of legacy SCADA/DMS while ensuring operational safety and regulatory compliance. Adopt a canonical data model (CIM-based) and an API-led, event-driven backbone to decouple device integration from business applications.

Use the strangler pattern: wrap legacy systems with adapters and expose controlled APIs while incrementally replacing modules (metering, outage management, DERMS). Separate functional domains—real-time control, network management, market interfaces—into clear bounded contexts with strict interface contracts and security boundaries. Implement a governance forum (architecture board) with OT, IT, regulatory and business representation to approve interfaces, data models and security baselines; this prevents costly rework and shadow IT. Choose middleware that supports protocol translation (IEC 61850, MQTT) and ensures message durability for intermittent connectivity in field networks. Embed observability into the architecture from day one (logs, metrics, tracing) to speed troubleshooting and compliance reporting.

Data & Analytics

Data is the strategic asset for integrating renewables and enabling flexibility. Build a unified energy data platform that ingests telemetry from SCADA, smart meters, weather feeds, market prices and maintenance logs with strong lineage and master data management.

Prioritize real-time and near-real-time streams for congestion management and balancing, and batch stores for long-term planning and asset analytics. Deploy use cases that unlock immediate value: probabilistic generation and demand forecasting, predictive maintenance for transformers and cables, and optimization for storage dispatch and market bids. Use digital twins to model network constraints and test control strategies before field deployment; ensure twin fidelity by linking to live telemetry and historical events. Implement data governance and role-based access aligned with GDPR and data-sharing agreements with DSOs/TSOs and aggregators—data sharing can become a competitive advantage if monetized through service offerings. Finally, scale analytics via governed MLOps to move models from lab to production safely and traceably.

Change Management

Modernization will fail without addressing organizational resistance. Start with stakeholder mapping across operations, unions, regulators, and local municipalities to identify pockets of resistance and influence.

Use small, high-visibility pilots that deliver operational wins (reduced outages, faster restoration) to create internal momentum and visible proof points. Embed change agents in each business unit and create cross-functional squads pairing legacy domain experts with digital natives; reward collaboration with KPIs tied to joint outcomes. Communicate a clear narrative linking modernization to job security (re-skill programs), operational safety and improved customer outcomes; align with works councils and labor rules across jurisdictions to avoid surprises. Use phased rollout with feedback loops: iterate processes, update training, and incorporate frontline feedback into product backlogs. Finally, measure and report cultural adoption metrics (tool usage, time-to-decision, number of cross-team deployments) alongside technical KPIs to ensure behavior change sticks.

Workforce Training

Closing the skills gap is a strategic imperative. Invest in role-based curricula: OT cybersecurity for control engineers, data engineering and analytics for grid planners, DER management for operations, and cloud/DevOps for IT.

Create a “digital academy” combining vendor certifications, university partnerships and hands-on labs (simulators and digital twins) so staff can practice on realistic systems without risk to live operations. Implement job rotation and shadowing between IT and OT to build mutual understanding and reduce cultural silos. Establish clear competency maps and certification gates tied to promotion and project allocation to incentivize learning. Leverage apprenticeships and funded retraining schemes available in many EU states to scale entry-level pipelines, and consider partnerships with local technical colleges to co-design curricula. Finally, measure training ROI through operational KPIs (reduction in incident MTTR, number of automated processes delivered) and maintain a rolling training budget to keep pace with rapidly evolving technologies.