From the passage of the U.S. Infrastructure Investment and Jobs Act to the rising popularity of electric vehicles, to several natural disasters illuminating the increasing load on the aging grid, 2021 was an eventful year for the utilities industry.
With these new challenges and opportunities to address, it is timely to consider the trends that will shape the business landscape as 2022 unfolds.
Tom Deitrich, CEO of Itron, provides Digital Journal, with some of the major trends that will impact on utility service providers.
Utilities will invest more heavily to adapt to market volatility
According to Deitrich, reform is still required along with rapid decision making. Deitrich notes: “Continued volatility stemming from the ongoing pandemic and market conditions will force utilities to invest in becoming more agile to respond to consumer demand. Climate change, natural disasters, renewable energy and electric vehicles have been the catalysts for this accelerated transition, with an eye towards maintaining service continuity, resiliency and reliability.”
Electric Vehicles will be one of the most disruptive technologies over the next five years
The Electric vehicles (EVs) market has promised a great deal of automotive change, says Deitrich, and will become most apparent over the next five years. According to Deitrich: “EVs have swiftly gained popularity in the US (China and other markets continue to lead in adoption) and will have a significant impact on the power grid as new infrastructure must be created to support them.”
As a signal of growth, Deitrich finds: “Since nearly all major auto manufacturers are planning to bring EVs to market over the next 10-25 years, the electric utilities industry has a unique opportunity to capitalize on new revenue while also making major contributions to environmental sustainability.”
As to what this entails, Deitrich says: “This will require two initial steps: the installation of more charging stations and the advancement of technology to manage and optimize the load that an unprecedented electricity demand will impose on an aging transmission and distribution grid. With EVs being adopted at such a massive scale and lack of visibility as to where the EVs are being adopted, grid infrastructure planning and management is becoming difficult, and utilities will recognize that a new approach is needed. New analytics will be required to create visibility, new programs will be needed to engage with customers, and new flexible, real-time energy resource optimization at the grid edge will be required to ensure a reliable, cost-efficient energy supply.”
Increase in Public/Private Partnerships
The complexity of the utilities landscape is too interconnected for a utility to sit solely in the public or private sector. Deitrich notes: “Several of the macro trends spurred on by the pandemic (i.e. Work From Home, customer migration, etc.) have made it increasingly difficult for utilities to manage their energy load as overall usage patterns have changed as a result.”
In terms of responding to this, Deitrich says: “This will require utilities to take an introspective look to better understand how they are serving their customers, and engage them on their preferred platforms (i.e. smartphone) with the most useful information. This will also mean providing consumers with a transparent view that demonstrates that their data is being used equitably and securely (how it is shared with third parties, cybersecurity protections, etc.). To truly make these partnerships work, consumers will also need to more actively engage with regulators and consumer advocacy groups to ensure that their interests are protected.”