The energy sector in Spain faces challenges of considerable importance that include, from energy sustainability and the reduction of CO₂ emissions (in accordance with the declaration of the European Commission of 2006¹), through to a necessary continuous increase of system efficiency.

Responding to these challenges of the energy sector requires a new supply model that promotes the development and integration in the system of new forms of distribution and consumption of the production (renewable generation, distributed generation, energy storage, active demand management, etc.) as well as an operations scheme of a flexible system that is coordinated across producers, operators, consumers and markets.

This necessary progress of the industry is framed within the paradigm of Smart Grids, the expansion and operation of which is possible thanks to the massive application of Information Technologies (IT) and the advances of basic research that support a new mix for generation and a new model for the integration of energy in the grids (with a focus on the use of renewable energies and on new means for energy storage).

Within this development context toward Smart Grids, ITs face several, inevitable challenges. First of all, they must support a new design of electrical grids and of their operational mechanisms to guarantee their stability. This requires providing a response to the necessary integration of energy flows that result of distributed generation; the increasing use of hybrid transmission grids (AC/DC) and the generalization of FACTS (Flexible AC Transmission Systems) systems; or the creation of supranational electricity markets. Furthermore, the new operations mechanisms must be capable of managing tremendous amounts of information that will be produced by the Smart Grids, and of providing advanced decision-making tools that will allow for both assuring the system's stability as well as for properly managing events, alarms and emergency situations.

The second major challenge entails offering a more open market model and electricity consumption which leaves space for the concept of prosumer (producer-consumer), the most intelligent element of Smart Grids. Beyond consuming, the prosumer will be a producer of energy and supplier for other consumers, another electricity trader/predictor of the price of electricity, or a possible seller of storage capacity. Another crucial aspect of the new scenario which ITs must be able to address are the Energy Services Companies (ESCs) which, with a potential market of €3 billion², to date still apply a hardly known business model in Spain.

Finally, it is necessary to promote the integration of energy services with other public services in buildings and large cities. This way, progress is made toward the Smart City concept and a step forward is taken in the search for energy efficiency from an integrated perspective.

After the appearance of a first generation of IT solutions focused on Smart Grids, today the adoption of a second wave of technologies that allow the model to take a qualitative leap forward is emerging. This is the case with those that allow for deploying smart processing elements and advanced, real-time pattern detection for grids; the use of new communication channels between companies and their clients, as well as social networks; or the development of models and tools in the Cloud.

The relationship between ITs and the energy sector is the foundation for a new infrastructure that permits what many refer to as the Third Industrial Revolution. The distribution of power in the 21st century³ will depend on the correct development of this relationship. One of our country's most critical challenges is the articulation of this relationship between Spanish technology companies and energy companies on a global scale.