Digitalisation and democratisation: a test for Europe’s just transition

Across Europe, the green transition is accelerating. With this, the emergence of renewable energy communities (RECs) is reshaping how citizens produce and share power, while digital technologies redefine the ways energy systems are managed. The digital transformation and the rise of AI holds both great promise and profound risks in the energy transition in general, as well as in the current trend of energy democratisation in particular. As the European Union (EU) prepares its Roadmap for Digitalisation and AI in the Energy Sector, one question emerges: can the dual trend of digitalisation and democratisation enable a just transition in Europe, or will it entrench existing divides?

Energy communities: vehicles for a just transition?

Energy democratisation is being framed as one of the EU most promising levers for achieving both decarbonisation and social cohesion. In this context, renewable energy communities (RECs) are emerging as an increasingly important part of Europe’s clean energy transition. Defined in EU legislation as local, citizen-led initiatives that produce, manage and consume renewable energy, RECs aim to democratise the European energy system by giving communities collective control over their resources.

They are a cornerstone of the EU’s Clean Energy Package, which champions a system where citizens are not mere passive consumers, but active participants in shaping the energy transition. By decentralising production, distribution and governance, RECs can both reduce costs, strengthen local resilience and promote inclusion, all while accelerating decarbonisation. That being said, while RECs are widely promoted in the EU as keys to achieving a just transition, this conviction is often uncritically based on the assumption that democratisation necessarily leads to just outcomes. With rapid digitalisation, this assumption is increasingly contested.

Democratisation and digitalisation

Digitalisation is rapidly transforming how local energy systems operate, making them more efficient and reliable. For example, smart grids and AI-driven management tools optimise renewable energy generation and storage, forecast demand and automate operations, reducing both costs and emissions.

In addition to the technical advantages, digital tools can also enable community empowerment by strengthening democratic participation within RECs. For example, online REC management platforms can make decision-making more flexible by allowing members to vote, access information and attend meetings remotely, including those who might otherwise have been excluded because of time constraints, caring duties or mobility limitations. This is particularly beneficial for women (especially older women or women caring for children) who face additional barriers to in-person participation in local (energy) governance. By providing accessible avenues for engagement, digitalisation and energy democratisation can contribute to the just transition, as well as helping those in need develop new digital and technical skills.

In addition to its potential for improving energy democratisation, digitalisation and AI-driven tools also strengthen local resource control and thereby reduce both energy costs and time. By predicting energy demand and matching supply to local needs, as well as automating and optimising energy generation, storage and distribution, AI-driven energy community systems are a great example of the twin transition in practice. Moreover, digitalisation has been shown to reduce the administrative burden associated with running a REC, making the (often voluntary) project planning and management easier and more efficient for community leaders. In other words, by making energy systems smarter and communities more self-sufficient, the digital transition is saving European citizens both time, money and emissions.

The risks of the twin transition

Yet, while digitalisation and AI can strengthen energy democratisation and lower energy costs, this does not automatically guarantee a just transition.

Participating meaningfully in a REC, even with digitalisation advancements, requires significant time and financial investments, which are not equally accessible. Low-income households and people living with energy poverty or time poverty – two groups in which women in particular are overrepresented – are frequently excluded from the benefits provided by RECs. While digitalisation can mitigate some of this effect, it also risks exacerbating it.

Furthermore, with increased digitalisation and use of AI-driven systems, the need for specific digital skills creates an additional barrier to participation, potentially entrenching existing inequalities such as those created by the so-called ‘digital gender divide’. The digital gender divide refers to the gap between men and women in access to and use of digital technologies, connectivity and digital literacy. This divide has been identified as a key obstacle to households adopting smart energy solutions, exemplifying the risks inherent in digitalisation of democratised energy systems.

Moreover, AI systems introduce new social and governance challenges in RECs. Automated and digitalised energy decision-making can be affected by algorithmic bias, limiting the ability of RECs to deliver on their just transition potential. Some experts have described this as the ever-widening ‘algorithmic divide’. As more and more households and energy communities digitalise and make use of AI tools, the importance of training AI-driven energy systems on time- and demography-dependent social practices – for instance, cooking and cleaning – should be emphasised as key to mitigating the risk of digitalisation deepening socio-economic disparities.

Digitalisation as a social infrastructure in the age of energy democratisation

Democratisation is at the forefront of Europe’s energy innovation, championed as a driver of a just transition, and digitalisation and the deployment of AI in local energy systems is shaping the way in which energy communities operate. In this context, the EU’s upcoming Strategic Roadmap for Digitalisation and AI in the Energy Sector with its aim to accelerate the rollout of digital solutions like AI in energy, is highly anticipated. The Roadmap will highlight the need for safeguards mitigating the risks associated with the use of AI in the energy transition, and with the ongoing push for energy democratisation, it might offer an opportunity to align Europe’s digital and energy policy with its social goals. This means funding local training programmes that build digital and technical skills among underrepresented groups, supporting women-led or otherwise inclusive energy community projects, and requiring social impact assessments for AI tools used in RECs.

The Roadmap should also make sure to include transparency mechanisms that do not exclude human oversight in energy systems prematurely. It should also consider robust bias testing of AI-driven energy tools to avoid energy-related exclusion and discrimination. Such steps are small but crucial if Europe wants to use digitalisation and AI in the energy sector and ensure that its twin transition is truly just.

RECs are powerful vehicles for inclusive energy governance, but their deployment of digital tools has already proven a test to the just transition goals. Digitalisation and the use of AI should not be considered a mere technical tool to advance energy innovation, but as a social infrastructure that, with the necessary inclusivity levers, can make it a driving tool of Europe’s energy democratisation efforts and contribute effectively to a just transition.

The views expressed in this #CriticalThinking article reflect those of the author(s) and not of Friends of Europe.