Digitalising Europe’s Electricity Grids: The Commission’s Proposal for Smart Grid Indicators, Data Exchange and AI

On 17 July 2026, the European Commission published a proposal for amending the EU Electricity Market Regulation (EMR). Among a diversity of subjects, including changes to network charges and taxation, this blogpost takes a closer look at the amendments to the EMR that specifically aim to establish a comprehensive set of sector-specific rules to advance the digitalisation of electricity grids in the EU and for the exchange and reuse of grid data. These are embedded in the provisions of Article 18a (1) to (5) of the proposal and would be complemented by implementing acts pursuant to Article 61(5a) and (5b).

In the following sections, we first situate the overall legislative proposal to amend the EMR in the broader EU policy agenda, from the Affordable Energy Action Plan to the recent Strategic Roadmap for Digitalisation and Artificial Intelligence (AI) in the Energy Sector. Then, we delve into the abovementioned proposed provisions on smart grid indicators, data exchange and reuse of grid data, including for the development of AI, to provide an overview of the context and the main substantive obligations proposed in the legal reform.

Policy Context

The legislative proposal originates from the Affordable Energy Action Plan, in which the European Commission identified the need to reduce energy bills by addressing network and system costs, taxation, and supply costs. The proposal’s provisions on the smartening of electricity grids that we are examining in this blogpost build on a broader body of EU policy shaping the digital and energy transition.

First, the provisions on developing smart grid indicators implement objectives set out in the Digitalising the Energy System – EU Action Plan, where the Commission announced its intention to support ACER and national regulatory authorities in defining common smart grid indicators. They also reflect the EU Action Plan for Grids, which encouraged ENTSO-E and the EU DSO Entity to promote smart grid deployment, network efficiency, and innovative technologies.

Second, the provisions establishing a framework for the exchange and secure reuse of electricity grid data build on a set of legislative and policy initiatives addressing data access, sharing and use in the energy sector. For instance, the European Data Strategy recognised the need to promote the availability and cross-sector sharing of data in a customer-centric, secure, and trustworthy manner to foster innovation and support energy system decarbonisation.

Finally, the Strategic Roadmap for Digitalisation and Artificial Intelligence in the Energy Sector, published as part of the European Tech Sovereignty Package, provides the immediate policy backdrop for the legislative proposal. Pillars II and III, respectively, promote digital and AI deployment across the energy system and stress the need for a dedicated governance framework for energy data to enable smart energy services and AI applications.

Smart Grid Indicators

Article 18a of the proposal can be thought of as pursuing two interlinked principal objectives. The first is to drive forward the digitalisation of electricity grids, while the second is to better leverage the data generated by such grids to enhance their management and optimisation. In pursuit of the first objective, paragraphs 1-3 of Article 18a aim to accelerate and enhance the coherence of progress towards a smarter, more digital grid.

As per paragraph 1, regulatory authorities are obliged to promote the deployment of ‘non-wire, smart and digital solutions’ when they ‘efficiently enhance’ the usable capacity, flexibility and reliability of the grid, including through regulatory incentives and priority consideration in network development plans. This appears to build on the same approach as the December 2025 proposal for the recast of the TEN-E Regulation as part of the Grids Package, which defines and emphasises the importance of non-wire solutions. To measure progress regarding the roll-out of these smart solutions, paragraph 2 mandates ACER to issue a recommendation on smart electricity grid indicators to regulators. In doing so, ACER should coordinate closely with the Commission, ENTSO-E, the EU DSO Entity and other stakeholders. Indeed, based on ACER’s recommendation, the Commission could adopt implementing acts that set out these indicators under the proposed Article 61(5a). ACER would be required to report on progress on these indicators, highlight best practices, and provide recommendations at least every three years following the publication of its recommendation under paragraph 3.

Exchange of Grid Data as a Positive Obligation

While Article 18a, paragraphs 1-3, accelerates the deployment of smart solutions, Article 18a(4) imposes a positive obligation on TSOs and DSOs to manage and exchange grid data, including those collected from non-wire, smart and digital solutions, enabling the development, deployment, and effective use of electricity grids, with the stated purpose of ensuring the efficient, secure, and flexible operation of the electricity system. This specific provision aims to address the problem of insufficient and untimely exchange of operational grid data referred to in Recital 19 — e.g., topology, asset characteristics, redispatch and curtailment data, flexibility needs and forecasts — which leaves system operators unable to see the state of the system well enough to avoid inefficiency.

Three objectives run through the measures of Article 18a(4). First, it converts the general TSO–DSO cooperation obligations in the acquis of Article 57 of the EMR into a purpose-bound duty. Operators shall not merely exchange data but develop and operate state-of-the-art data-driven tools for monitoring, optimisation and coordination, including integration of demand response, renewables and non-fossil flexibility. Second, the provision leads network operators to use data in a ‘harmonised manner’, including by establishing data sharing agreements, aligning with the interoperability objective of Recital 23. Third, the proposal avoids regulatory duplication, avoiding the creation of a parallel or conflicting access regime as stated in Recital 20. The paragraph is expressly subordinated to Chapter III of the Data Act, defers to Chapter II where applicable, namely the connected products regime, and imposes anonymisation-first with personal data as a residual.

Enabling the Reuse of Data and AI

According to Recital 21, ‘the use of electricity grid data for analytical, research and innovation purposes is constrained by legal uncertainty, high transaction costs and the absence of common arrangements for secure data access, processing and governance’. To address this issue, the Commission proposes a long provision under Article 18a(5), obliging TSOs and DSOs, through a coordinated arrangement jointly facilitated by ENTSO-E and the EU DSO Entity, to establish a voluntary electricity grid data exchange framework. The framework should enable ‘the lawful, secure and controlled reuse of data for research and innovation public-interest purposes of developing, testing, integration and deployment of advanced technologies for grid operation and optimisation’, including, in practice, AI systems.

Article 18a(5) advances some important policy goals. First and foremost, it proposes a sector-specific legal basis for lawful, secure and controlled reuse of grid data. The second paragraph (a) delegates to ENTSO-E and the EU DSO Entity to draw up ‘governance, decision-making rules and rules of participation of [TSOs] and [DSOs], including those joining at a later stage, the allocation of roles and responsibilities, intellectual property management and the means of accessing’ innovative solutions. Second, any TSO or DSO in the EU may request use of the solutions developed, ensuring diffusion of the innovation solutions and making the IP-management clause a regulated tool. Third, Article 18a(5), in its second paragraph (c) and (d), anchors safeguards ex ante — confidentiality, cybersecurity, GDPR, Data Act and AI Act compliance, lifecycle maintenance, and common testing, benchmarking and validation. Finally, the proposal has the ultimate purpose of securing the strategic autonomy of the Union in critical infrastructure software, which the explanatory memorandum states openly.

New Implementing Acts for Electricity Grid Data Exchange and Use for Innovation

In addition to conferring powers to ENTSO-E and the EU DSO Entity, Article 61(5b) also empowers the Commission to adopt implementing acts on data reuse, interoperability, secure processing environments, liability, and cybersecurity within the voluntary coordination mechanism between TSOs and DSOs established by Article 18a(5).

A key challenge will be ensuring that these new rules fit coherently with existing horizontal EU legislation on data, artificial intelligence and cybersecurity. The relationship with the Data Act, for example, remains unclear. Electricity grid data may be generated by several assets and subcomponents within the grid infrastructure, including sensors, transformers, smart meters, distributed energy resources and other network devices. Whether the data generated by these components fall within the scope of the Data Act depends on a case-by-case assessment of whether the specific asset qualifies as a ‘connected product’ within the meaning of the Regulation under Article 2(5). The role of the GDPR appears more limited, as Article 18a(4) provides that personal data should be shared only where anonymised data are insufficient to achieve the intended objective. Finally, the implementing acts should avoid creating overlapping or conflicting requirements by aligning with existing EU cybersecurity and AI legislation, particularly regarding incident reporting, risk management, and compliance obligations.

Conclusion and next steps

The Commission’s proposal for amending the EMR now enters the ordinary legislative procedure, where its scope could be accepted or contested by the European Parliament and the Council of the European Union. Yet even upon adoption, the substance of the regime will remain largely undetermined. Three instruments will decide how it actually operates: the implementing act establishing the smart electricity grid indicators, referred to in section 2; the governance, participation, access and intellectual property rules to be drawn up by ENTSO-E and the EU DSO Entity, addressed in section 4; and the implementing act laying down common requirements on data models, formats, ontologies, access procedures and transparency for the data exchange framework, examined in section 5. The bottom line is that the legislative proposal sets the frame; the details will be settled elsewhere.

Acknowledgements

This blog post draws on prior research that was financially supported by the European Commission. Responsibility for the analysis and for any errors rests with the authors alone.