Itron’s annual evaluation of the utility sector illustrates executives’ concerns over grid modernization and its effect on the energy transition and decarbonization. It released its 2023 Resourcefulness Insight Report, which examines the shift away from fossil fuels and towards more distributed energy resources.
Powering the Energy Transition: Insights from Utilities and Commissioners on Creating the Future U.S. Grid, summarizes key findings from 250 U.S. utility executives and 10 state public utility commissioners. It finds that utilities and regulators are taking proactive stances — driven by public demand, cost savings, and environmental concerns.
“This year’s report underscores the pivotal moment we’re at in shaping the future of the U.S. grid. What’s clear is that utilities are looking to address those challenges, and the study uncovers where they are on this journey,” said Marina Donovan, vice president of global marketing, ESG, and public affairs at Itron.
“Utilities have a critical role to play in accelerating the energy transition, and stakeholder education is an important part of that effort,” she adds. “By educating consumers, policymakers, and regulators about clean energy, conservation, and energy management programs, utilities can help overcome these challenges.”
The findings indicate that utilities and regulators embrace the transition. Indeed, 88% of utility executives say that the energy transition is incredibly significant, and seven in 10 commissioners say policies are supportive of the energy transition. According to the survey, 45% of utilities actively implement plans to address it, while 49% are in the planning stages.
Utilities’ top technology priorities include infrastructure upgrades and grid modernization. Actually, 48% of executives give that their top priority while developing renewable energy sources follows closely at 47%. Over the next five years, utilities plan to invest in technologies for load monitoring, voltage management, and solar.
Analyzing the Opportunity Costs
A failure to rethink and rework America’s backbone will have a cost. The American Council on Renewable Energy, for example, says that 51,000 megawatts of renewable energy are at risk if utilities do not expand the transmission network — a function of regulatory permits and costs, central ingredients to lure investors.
A lot of other companies tied to the energy sector can prosper, including engineering and construction firms like Babcock & Wilcox, Bechtel, Fluor Corp., Jacobs Engineering Group, KBR Inc., and MasTec.
The White House says that for this country to reach its economic promise and hit its net-zero goals, the electric network must expand by 60% by 2030. Black & Veatch says that 60% of the country’s localized distribution lines are outdated and that the Brattle Group says $2 trillion is needed by 2030 to modernize the lines. Brattle also says that distributed energy resources can alleviate stress on the primary grid and meet 20% of peak load by 2030.
“All communities can participate in this transition,” says Karen Wayland, president of the Gridwise Alliance.
Dr. Wayland says that such a transformation makes grid modernization imperative. Not only must the wires carry more green energy, but they must also be able to detect outages before they occur — and redirect traffic. The network must facilitate two-way communications between utilities and customers to save energy. And cars will be using less gasoline and more electricity to fuel up. Electric vehicles and onsite generators, meanwhile, must be able to feed electricity onto the system to meet peak demand.
What about energy costs? Electricity is 7% of the U.S. economy, and without access to it, businesses can’t operate.
“We see electricity as a more efficient source of energy,” says Robert Chapman, a senior vice president for EPRI. “You can’t decarbonize and add in reliability without cost going up. But it is displacing other less efficient and more expensive fuels. An economy-wide transition will be affordable.”