The missing Governor: Why we need a digital system architect
In the latest in a series of articles on overcoming barriers to digitalisation, in association with CGI, the Energy Geeks tackle the issue of governing a digital system. They outline their vision for a new body to oversee delivery of a coherent digital energy system and what its priorities should be.
As we have highlighted in previous articles, there is a Tower of Babel emerging across our journey to a digital future that is inhibiting the acceleration we need to unlock and manage the hundreds of millions of actions and assets on the energy system going forward.
It is also the case that many of the programmes in train are digitalising existing processes rather than harnessing the real opportunities of transforming how and what we do.
The Energy Geeks are a thinktank set up to tackle the thorniest issues of energy policy. They are: Eric Brown; Maxine Frerk; Simon Harrison; Roger Hey; Laura Sandys and Steven Steer
We are also seeing that the potential solution providers of these great transformations are confused and muddled by what is the destination, what are the key digital assets being developed and most importantly how they all fit together. As we have shown already, each part of the energy governance system is describing data differently. Worryingly, if users had to comply they would end up spending all their revenues moving data around a system that doesn’t have clarity of what it wants to do with the data.
So now is the time for a step back and work out what is needed in terms of governance. We very much welcome the fact that Ofgem have already issued a letter recognising this burning platform. We hope that this article goes someway to support and help with designing what is needed.
The Hardware Success
You can see the physical energy transition happening at remarkable pace every single day in the UK. We are world leaders in offshore wind, deploying hardware faster than most nations. The government’s Clean Power 2030 mission is driving billions of pounds into steel, copper, and silicon.
Yet in our rush to deploy hardware, we have entirely failed to design the software rules to operate it. We are building the most complex machine in British history without writing the operating manual.
To put this in motoring terms: we are building the digital energy highways and byways and handing keys to millions of drivers (homeowners with EVs, businesses with batteries), but we haven’t painted white lines on the road or agreed what a red light means. As we’ve said before, we need a Highway Code for the energy system.
Integration systems engineering is not just a think tank concern. At Ofgem’s recent Architectural Coordination workshop, the message from industry was striking in its coherence and vigour: private companies are begging for someone to define and enforce the rules of energy’s digital roads.
Why? Because capital hates uncertainty. Investors will take commercial risks, but not structural risks. Without a shared approach, we’re heading for a Digital Wild West. A chaotic junction where no one can say who has right of way is not a “free market” or centralised control; it is a worst of both worlds, a pile-up waiting to happen. The industry knows that to unlock the next wave of capital, we need clarity. We need an unbiased rule-maker with authority to mandate compliance, not just coordinate aspirations.
At Energy Geeks HQ we believe this governance void is the single biggest risk to the electrification of the economy.
The Tower of Babel
The problem isn’t a lack of effort. That hurdle has been crossed and individual brilliant work is now underway. The National Energy System Operator (NESO) has explored a Data Sharing Infrastructure service, determining how to best route energy data technically. Elexon is working to align local flexibility markets. RECCo is unblocking responsible usage of consumer data. Energy networks are investing in grid monitoring and advanced analytics and the BSI has started standards development focused on aligning grid data.
Each initiative is technically sound when considered in its own bubble. The issue is that each is designing in isolation. There is no coherent target design for the whole system, there is no clear accountability for achieving coordination and, critically, there isn’t a meaningful and agreed definition of what it is to be ‘coordinated’. When these services don’t add up and don’t play nicely together it will be everybody’s yet nobody’s fault. Without clear accountabilities for achieving integration, consumers will be left footing the bill.
Who decides that all necessary components exist and that none are duplicated between different services? Nobody is responsible for this.
Who identifies, monitors and mitigates risks to the whole system? It’s nobody’s job, they are left unchecked.
Who ensures that physics always trumps economics? Nobody confirms that our end-to-end digitalised energy system respects scientific and physical constraints.
The fundamental problem is that despite laudable enthusiasm for delivering solutions, we have ambiguous overall requirements. There is no single body with the authority to define the overall design and command coordination from the sector’s many incompatible initiatives before they commit to implementing disparate individual designs.
Who ensures that physics always trumps economics? Nobody confirms that our end-to-end digitalised energy system respects scientific and physical constraints.
The MDU Solution
What we need is a Modernisation & Digitalisation Unit (MDU) whose role is solely to architect and oversee delivery of a coherent digital energy system. It should exist with this mandate for only a fixed period of time.
The MDU would serve four essential functions:
- Digital System Technical Architect: Create a target design for how the energy system’s digitalised services will fit together, end-to-end. Rationalise the current fragmented programmes (NESO’s DSI, RECCo’s consent mechanisms, Ofgem’s asset visibility requirements, DNO monitoring systems, Elexon’s Market Facilitation, BSI’s data standards, Networks’ SIF innovations, and so on), creating one coherent set of activities for our digital energy ecosystem.
- Rules of the Road: Define and mandate the digital rules that all participants must follow (the policies, protocols, and standards that ensure the system integrates safely and efficiently). This isn’t just technical standards; it’s setting the policy framework for how digital energy infrastructure operates, who has access, what data can be used for, and how conflicts are resolved. Just as the Department for Transport sets the Highway Code that all road users must follow, the MDU creates binding rules for the digital energy system that prioritize physics over profit and ensure consumer protection. The Energy Geeks is working on a detailed Digital Energy Highway Code as a technical blueprint for these rules.
- Programme Manager: Develop, share and be accountable for a credible engineering implementation roadmap that grounds and holds to account the plans of those around it, by balancing (A) thoroughly stretching targets for implementation bodies to deliver to, and (B) the actual system implications and costs associated with the ambition implied by government and regulatory policies. It needs to keep all parties ‘honest’ in their promises and delivery.
- Assurance: Hold implementing bodies accountable for their delivery of components for the overall system and its services, ensuring safety and efficiency. This will require challenging and aligning incompatible proposals before resources are committed, ensuring all programmes and policies align rather than fragment.
Critically, this body would not create detailed ‘low-level’ designs and certainly would not build the solutions itself. This would be excessive centralisation by far. Industry operators and their supply chain build infrastructure and services. The MDU has one purpose, which is to own and oversee delivery of the high-level design for a coherent digitalised national energy system to function.
The Precedent Exists
We don’t need to invent from scratch. Proven international standards solve every component. California Rule 21 mandates smart inverter standards for grid stability. Australia’s Consumer Data Right defines data ownership and portability without centralized databases. India’s UPI routes billions of financial transactions through a thin coordination layer with no central data store.
The MDU would assemble these proven approaches into a Digital Energy Highway Code tailored for UK needs. The technical solutions exist. The implementation models exist. What’s missing is the authority to mandate their adoption.
The MDU requires clear authority to mandate compliance across public bodies and regulated private services. This could be established through ministerial direction, licence modifications, or code changes. Realistically, the MDU’s work can be progressed a long way simply through soft power, a collaborative mindset and a genuine ‘can-do’ attitude by the sector; formalities of process can catch up after. We have no time to spare.
Clean Power 2030 is fewer than 2,000 days away. Three years. Four functions. Then dissolved. We need a strike team with wartime urgency, not permanent bureaucracy.
Who Should Be in Charge?
DESNZ has the policy mandate, NESO the technical capability, Ofgem the regulatory powers. What’s missing is the MDU as a coordination body with authority to require digital and data engineering alignment and with no other responsibilities distracting it.
The MDU could sit between the existing institutions, either reporting to DESNZ or devolved within it via Mission Control; either way it would require genuine independence to ensure it can act without fear or favour.
Ofgem’s recent open letter showed openness to architectural coordination. Industry responses were unanimous: “Give us certainty. Let us compete on service, not on whose proprietary standard wins.” The industry has spoken. They’re begging for stewardship. The technical solutions exist globally. The institutional will is swelling up.
We are at a crossroad. Down one path lies the continuation of the Tower of Babel (overlapping consultations, incompatible systems, billions spent on digital infrastructure that can’t talk to each other, and a grid that remains blind to the assets connected to it).
Down the other path lies coordination, interoperability, and a secure digital foundation for Clean Power 2030 and beyond. The choice seems obvious. Yet without promoting engineering leadership among our institutions, we will continue building competing towers at the consumers’ expense.
Comment:
Rich Hampshire, vice president, digital utilities, CGI
Comment:
Rich Hampshire, vice president, digital utilities, CGI
Following from their Turning a digital vision into action article, the Energy Geeks train their headlights on the need for clarity about governance and how the plethora of initiatives across the energy sector must be coordinated for clean energy by 2030 to be deliverable and for consumers to benefit from this radically different way of sating their energy needs.
The Geeks nail this challenge in their second paragraph – digitalisation, in the context of the energy transition, is more than digitalising the way the system works today. An increasingly distributed energy system has fundamentally different dynamics. If we are to realise the opportunities created by this transition, then innovation in system governance, in the market architecture, and in the business models of the system actors are all essential. But that requires clarity on the architecture of the system.
A key insight is the laws of physics and engineering are givens, but the governance and the different obligations placed on system actors are choices applied to the physical system. The system is evolving too fast to spend years theorising about a perfect design – the challenge is to identify the critical points of control around which the system has the freedom to evolve and system actors can invest and create value. Therefore, a change process that is able to respond to opportunities, and to manage emerging risks effectively, is essential.
Over the last 18 months it has been fascinating to follow the evolution in the Energy Geeks’ thinking. They have shifted the discourse from digitalisation towards data. The importance of “clarity of what [system actors] want to do with the data” is one aspect. Knowing what to do with the data requires understanding of what needs to be done – which determines the data required to make informed decisions. Back to the Geeks’ primary call for clarity.
It’s clear that there is an immense amount of invaluable initiatives underway. Each of these are vital pieces of a jigsaw puzzle that, when complete, will provide the foundation for Britain’s energy transition. DESNZ’s and Ofgem’s much anticipated Digitalisation Vision should provide the destination. The roadmap, the picture on the top of the puzzle’s box, must enable identification of duplicate pieces and, more importantly, whether any pieces are missing!
I look forward to seeing the Energy Geeks’ blueprint for the Digital Energy Highway Code. Once the proposed Modernisation and Digitalisation Unit (MDU) completes its 3-year mission, the question that remains is, how will the system governance be maintained as it responds to the continued evolution of the system? The one thing of which we can be certain is that the pace of technology change will continue to accelerate, and system governance will need to respond if the opportunities created are to be embraced.
