Regulating AI in the ‘twin transitions’: Significance and shortcomings of the AI Act in the digitalised electricity sector

Abstract The use of artificial intelligence (AI) in the electricity sector is increasing as part of the twin digital and green transitions in the European Union (EU). AI technologies can be used for optimisation, prediction and scheduling purposes, offering possible solutions to the challenges presented by the ongoing energy transition. At the same time, AI technologies in general, not only in the electricity sector, also raise concerns about (unintended) harms and risks for people. To respond to these concerns, the EU has taken steps to regulate the responsible development and use of AI. A significant milestone in this endeavour is the recent adoption of the AI Act, the first horizontal EU legislation introducing harmonised rules for AI systems. In this paper, we examine different uses of AI in the electricity domain and investigate the extent to which the upcoming AI Act applies to them. In addition, we identify the shortcomings of the AI Act in the context of the electricity sector, as well as aspects that are not covered by this legislation. We show that the AI Act will only cover a narrow subset of AI systems in the electricity sector and that addressing some of the challenges that these systems pose may require further regulation.