Is the Grid Ready for What is Coming?

Not Everyone Thinks So

It’s clear that climate disruption, integrating renewables and electric vehicles are currently—and will continue to be—top stressors on an aging grid. Now for the million-dollar question: are we prepared to handle these challenges?  

The answer is overwhelmingly yes according to utility executives. The recent “Preparing for the Unexpected and the Inevitable: An Itron Resourcefulness Report” highlights the fact that 8 in 10 utility execs say they’re prepared to manage emerging challenges. Unfortunately, consumers are not as optimistic. The report, which is based on a survey of 500 utility executives and 500 informed consumers from across five countries, finds that while 84% of executives say they’re extremely/very prepared for what’s coming, only 47% of customers can say the same.

At first glance the stark difference between utility and consumer confidence levels is surprising. The numbers start to make more sense, however, if you consider the unique position utility executives are in. They see firsthand the resources being dedicated to grid modernization, but are also acutely aware of what is at stake and feel a personal responsibility for keeping the grid running. In fact, nearly nine out of 10 utility executives are extremely or very concerned about the three biggest challenges and their potential impact on the grid. It comes down to being confident yet concerned as they are faced with many unknowns.

What’s keeping utility execs up at night? As it turns out, a lot.

It might not be a shock to hear that utilities have a high level of concern over grid stressors, but it’s interesting to see that they are virtually split on what is the most pressing issue. Between 21% and 23% of respondents named either integrating renewables, upgrading the grid, impact of electric vehicles (EVs) or disaster response as the “greatest challenges to the reliability and resiliency to the grid.”

While executives have contingency plans in place and are actively engaged in completing upgrades, it is hard to argue with the fact that there is still a lot to be done. We are dealing with an aging grid that is facing several converging challenges—all which have the ability to cause havoc if not properly managed. There is a great deal of uncertainty around changing energy usage patterns and the adoption rate of EVs and renewables for example, while natural disasters are becoming increasingly unpredictable.

Let’s quickly dive into each of these concerns:

Disaster response: The impact of climate disruption already dominates headlines and there is no shortage of studies pointing to fact that the sea levels are rising—and extreme weather will only continue to increase in frequency.

Plus, climate disruption has created a reality where officials are forced to face unprecedented weather occurrences. Take the February 2021 grid failure in Texas for example: a winter storm caused millions to lose power and the ability to access safe drinking water, and more than a hundred people tragically lost their life.

It’s easy to see why nearly nine out of 10 utility executives (88%) surveyed said they are extremely or very concerned with the impact of disasters on the grid. If the grid can’t withstand extreme weather, we’ll start to see more catastrophic grid failures.

Distributed energy resources: Renewables are becoming an integral part in the world’s quest to become carbon neutral. They are already the fastest-growing energy source in the U.S., increasing 42% in ten years (2010-2020). And according to Itron’s recent report, just 15% of utilities have more than a third of renewable energy from DER integrated in their energy mix today. However, in just 5 years time, they expect that to increase to 40%.

While essential for the environment, renewable energy poses a a growing challenge for utilities. By changing the direction of power flow, DERs can add complexity and variability that traditional, centralized energy distribution networks have managed to avoid.

Electric vehicles: The data shows 81% of utility execs believe EVs will have a significant/very large impact on the grid over the next five years, while 85% of utility execs are extremely/very concerned about ensuring grid reliability and resiliency with increased demand from EVs.

Utility execs are not the only ones with their eyes on EVs—all signs point to more customers skipping the pump all together in the coming years. The International Energy Administration projects that as many as 245 million EVs may be sold worldwide by 2030. Leading auto manufacturers like Ford are getting on board: just this year they unveiled the F-150 Lightning, an all-electric version of America’s best- selling pickup. And in November of 2021, Rivian enjoyed the largest U.S. IPO since 2014.

It’s also important to take into consideration the expected shift in priorities over the next five years. Across each country, top challenges today are expected to change by 2026—except in the United States and Indonesia.

U.S. utilities view upgrading the aging grid as the top priority now and in the future, while Indonesia sees integrating renewables as the number one focus. Managing EV demands rose up to the top for the remaining countries.

Turning to technology to prepare for the unexpected and the inevitable.

COVID-19 had an immense impact on efforts to modernize the grid. 1 in 4 utility executives state the pandemic is delaying upgrades, yet natural disasters, renewables and EVs haven’t gone anywhere. Quite the opposite in fact.

Now that we are slowly getting back to normal, we need to focus on upgrading the grid in order to make up for lost time. The good news is that certain upgrades can help solve more than one challenge. These technologies include advanced metering infrastructure (AMI), distribution automation and real-time monitoring.

Even better news...the technology already exists and is starting to be implemented. AMI is the top tech investment currently deployed overall among the utilities surveyed—and across all three key challenges.

More intelligence, more possibilities

To prevent the grid from reaching its breaking point, utility execs know that they need to prepare for emerging challenges today. And with the right industry support and continued investment in the right technology solutions, we’ll be able to keep the grid running like it should.

However, it can’t be stressed enough that the time to act is now. As Justin Trudeau, Prime Minister of Canada aptly put it at the 2018 Davos World Economic Forum, “The pace of change has never been this fast, and it will never be this slow again.”

About the Author:

Ty Roberts is Vice President of Marketing, Networked Solutions at Itron. As part of Itron's leadership team, Ty is dedicated to bringing innovative technologies and business models to market to ensure the benefits of responsible, sustainable and equitable use of energy are felt around the globe. Visit Ty’s LinkedIN page