Standardization and trusted interoperability in AI-driven energy flexibility

Emerging AI-driven energy flexibility solutions, such as virtual power plants (VPPs), are key to maintaining grid scalability and future-proofing critical infrastructure. VPPs help balance and optimize energy use and are a central player in integrating renewable energy sources. However, the path to realizing the benefits offered by VPPs is not without hurdles. Among the most critical of these challenges are standardization and trusted interoperability. How well do devices, platforms, and systems communicate, share data, and function together? Without secure, interoperable systems, AI-enabled energy flexibility solutions will likely remain fragmented and unable to realize their full potential.

The importance of interoperability and standards in energy flexibility

Interoperability ensures that devices, systems, and platforms can seamlessly work together, regardless of manufacturer or technical specifications. This is vital in energy flexibility scenarios where VPPs combine both industrial and consumer IoT systems into a single, responsive energy ecosystem. Standardization, on the other hand, establishes common protocols and technical frameworks to ensure these systems speak the same “language” across all components of a VPP, and most importantly, across the larger regional power networks that can reach up to millions of electricity consumers.

In a VPP, devices such as smart meters, sensors, and distributed energy resources (DERs), for example, solar panels and water heaters, need to cooperate in real time, often over vast distances and across diverse infrastructures. The absence of standardized communication networking and a lack of hardware or software interoperability between all components can lead to inefficiencies, operational errors, and increased security risks. 

Cybersecurity risks are of particular concern, because, as mentioned in our previous blog, even a seemingly benign smart home thermostat can be an entry point for a cybercriminal to gain access into critical grid infrastructure, potentially turning a digital break-in into a national security event. According to IBM, the average cost of a data breach in the power infrastructure was 4.72 million USD in 2022. 

This is why the U.S. National Institute of Standards and Technology (NIST) stresses that secure interoperability is essential for managing decentralized energy systems; in the case of VPPs this means ensuring that all components work cohesively to deliver optimal flexibility and efficiency in a secure environment.

Challenges to standardization and trusted interoperability

Despite its importance, achieving true interoperability in secure energy flexibility solutions is a significant challenge. The energy sector faces a proliferation of standards, with each device, platform, or technology vendor often adhering to different or even proprietary protocols. These challenges include:

• Industrial and consumer infrastructure, such as high voltage transformers, power transmission lines, residential smart meters and EV chargers need to coexist in VPPs. The Department of Energy (DOE) is funding VPP projects aggregating these and many more types of DERs. This blend of industrial and consumer-grade DER components often function on different technologies and standards, such as OpenADR, IEEE 2030.5, and OCCP. The lack of alignment between these technologies and standards complicates their integration into VPPs.
• Vendor lock-in proliferates in the energy industry; many VPPs are connected to devices using proprietary systems that limit compatibility with devices from other manufacturers. This forces energy stakeholders to rely on a single vendor’s ecosystem, limiting flexibility and innovation. Even when standards are adopted, proprietary implementations—such as unique forms of device authentication—can lock users into specific platforms. This not only hinders innovation but also increases costs for energy operators and consumers.
• As highlighted in a previous blog there is a fragmented regulatory environment. Differing regulations across regions further complicate standardization efforts. For instance, while Europe may favor one set of standards, North America may adopt a different approach, making it difficult for energy systems to achieve interoperability.
• VPPs integrate diverse and disparate energy resources, including solar panels, wind turbines, and battery storage systems, to operate reliably as a single power plant, VPPs need to rely on synchronized secure data exchange between distributed energy resources. Yet, the heterogeneity of technologies and devices creates vulnerabilities related to data transmission, processing, and storage. Locking down data transmission, processing, and storage under a single unified security system would seem the best solution. However, this can silo the VPP from the broader grid infrastructure, making it inflexible and hard to scale, hindering its overall interoperability.

How TEIA and XPN can help achieve standardization and trusted interoperability

One way to address these challenges is through innovative open standards and secure interoperability technologies. These solutions operate at a high level to seamlessly integrate diverse hardware, software, and protocols in the market—regardless of their age, manufacturer, or grid connectivity level. Leading this integration effort is the Trusted Energy Interoperability Alliance (TEIA), which develops secure open standards to solve critical interoperability challenges across energy systems. TEIA’s approach to standardization offers a unified vision for integrating both industrial and consumer IoT devices found in VPP ecosystems, increasing the ability of these AI-driven energy flexibility systems to securely connect to most any DER device.

XPN, a zero-trust architecture secure communications service based on TEIA standards, enables this integration in practice, offering energy operators a standardized way to connect and manage their diverse assets while maintaining rigorous security requirements.

XPN complements TEIA’s efforts by ensuring secure communication among DERs controlled by a VPP for both legacy and next-generation metering systems. XPN provides critical features like device authentication, data protection, and ensuring that data is only processed in protected environments. XPN brings security features at the OSI layer 7, making it very flexible for energy stakeholders to utilize devices from various manufacturers, and realizing the goal of trusted interoperability.

In a VPP, XPN can enable secure communication between legacy industrial control systems and newer, AI-enabled platforms. By using XPN, the VPP can achieve full interoperability without compromising on security, despite having different underlying technologies.

XPN can facilitate secure data exchanges between home energy management systems and utility providers, demonstrating its ability to bridge consumer and industrial systems. This can help optimize energy consumption in real time while maintaining a robust security framework.

Join TEIA and lead the way to energy system interoperability

As VPPs increase their use of AI and DERs to optimize energy flexibility and resilience, it is critical that these systems communicate effectively and reliably. Standardization and interoperability are no longer optional—they are essential to maximizing the value of energy flexibility solutions.

Energy stakeholders, IoT technology vendors, and policymakers can benefit greatly from leveraging TEIA initiatives. Think back to the example of the Department of Energy’s efforts to grow VPPs. Without proper standardization and interoperability, business will not grow on par with energy demand. It is not only an issue of business stalling and scaling slowly, it is also a matter of maintaining energy business flexibility so that new technologies and energy demand can be addressed proactively. 

TEIA aims to establish common standards to keep new energy business models, such as VPPs, interoperable under a flexible layer of trust. TEIA provides VPPs trust and security across its critical infrastructure, ensuring that all devices, platforms, and systems can work together harmoniously within safe interoperable environments. By participating in TEIA, you can help shape the future of VPPs and ensure that AI-enabled energy flexibility delivers on its promise of efficiency, security, and innovation.

For more information, visit the TEIA page here and explore how XPN can help your organization achieve secure, seamless interoperability here.