Digitalization: Driving Energy Efficiency for a Connected Future

Digitalization is set to transform the global energy system, offering large gains in energy efficiency across all sectors of the economy. Digitalization describes the growing application of information and communications technologies (ICT) across the economy, leading to increasing volumes of data, rapid progress in analytics, and greater connectivity between humans and their devices. Digital technologies have the potential to optimize the energy used for many energy-intensive activities—from manufacturing cement to cooling a building—while also enabling increased electrification of transportation and industrial processes. Smart manufacturing can lead to energy savings of 10 to 20 percent, lowering energy costs to businesses while also reducing carbon emissions. Across all transport modes, electric vehicles and digital technologies are helping to improve energy efficiencies and reduce emissions, while also providing benefits such as load balancing to electric grids. And grid-integrated buildings, smart appliances, and energy management systems give consumers and businesses greater control over their energy consumption. At the same time, digitalization is leading to an “explosion of data” (in the words of the International Energy Agency) that some fear could drive up energy consumption and the environmental footprint of the tech sector.

ITIF hosted a discussion with industry leaders on the role of digitalization in driving energy efficiency gains across the economy, and released a new report assessing the concerns—some legitimate and most not—regarding the energy and environmental impacts of the tech sector. Andreas Urschitz, division president for Power & Sensor Systems at Infineon Technologies, provided introductory remarks and discussed these issues with ITIF Senior Policy Analyst Colin Cunliff followed by an expert panel discussion.