Energy industry trend update - Where’s the focus?
As we move deeper into 2024 - What are the latest trends in the power and utilities sector?
We started off 2024 with the trends in mainstream reporting being renewable energy related, sustainability, resiliency, and overall, an industry in transition. It’s so much more than that and here are some thoughts on the state of the industry.
Here are some of the current trends:
1. Renewable Energy Expansion - There is continued growth in the deployment of renewable energy sources, such as solar, wind, and hydropower. This expansion is driven by falling costs of renewable technologies and policy incentives aimed at reducing carbon emissions.
2. Energy Storage Integration - Advances in battery technology and the increased use of energy storage systems are enhancing grid reliability and enabling better integration of intermittent renewable sources. Large-scale storage projects and residential battery installations are becoming more common.
3. Decentralization and Distributed Energy Resources (DERs) - There is growth in distributed energy resources like rooftop solar panels, small wind turbines, and community microgrids. FERC Order 2222 requires systems to integrate DER load in their planning.
4. Electric Vehicles (EVs) and Charging Infrastructure - The adoption of electric vehicles is accelerating, prompting the need for widespread and reliable charging infrastructure. Utilities are investing in EV charging stations. EV rates are becoming more common in rate tariffs.
The move to renewables
Utility Accounting and Rates Specialists provides on-line/on-demand courses on operations and construction project accounting, rates, and management for new and experienced co-op and utility professionals and Board members. Click on the button to see a highlighted listing and description of our course offerings.
5. Grid Modernization and Smart Grids - Investments in grid modernization are ongoing, with a focus on developing smart grids that use advanced communication and automation technologies. These smart grids improve efficiency, reliability, and the ability to integrate renewable energy sources.
6. Advanced Metering Infrastructure (AMI) - The deployment of advanced metering infrastructure is expanding, enabling utilities to collect real-time data on energy usage. This data helps in demand response programs, better grid management, and providing consumers with more control over their energy consumption. Electric cost of service studies are becoming more accurate, with the ability to design more focused rates.
7. Cybersecurity Concerns - As the grid becomes more digital and interconnected, cybersecurity is a growing concern. Utilities are investing in robust cybersecurity measures to protect against potential threats and ensure the resilience of the power supply.
8. Artificial Intelligence (AI) and Data Analytics - The use of AI and data analytics is becoming more prevalent in the industry, helping in predictive maintenance, optimizing grid operations, enhancing customer service, and improving energy efficiency.
9. Blockchain and Energy Trading - Blockchain technology is being explored for peer-to-peer energy trading and improving transparency in energy transactions. This can facilitate decentralized energy markets and enhance efficiency.
10. Hydrogen Economy - Hydrogen is gaining attention as a versatile energy carrier and a potential solution for decarbonizing sectors that are hard to electrify. Investments in hydrogen production, storage, and utilization are on the rise.
These trends are part of the longer curve of change
These trends indicate a dynamic shift towards a more sustainable, resilient, and technology-driven electric power industry. However, this change will require trillions of dollars of investments funded by customer rates, debt, and government grants. The movement continues but is a longer-term trend. In the meantime, a focus will be maintained to provide reliable electricity with our available resources.
About Russ Hissom - Article Author
Russ Hissom, CPA is a principal of Utility Accounting & Rates Specialists a firm that provides power and utilities rate, expert witness, and consulting services, and online/on-demand courses on accounting, rates, FERC/RUS construction accounting, financial analysis, and business process improvement services. Russ was a partner in a national accounting and consulting firm for 20 years. He works with electric investor-owned and public power utilities, electric cooperatives, broadband providers, and gas, water, and wastewater utilities. His goal is to share industry best practices to help your business perform effectively and efficiently and meet the challenges of the changing power and utilities industry.
Find out more about Utility Accounting & Rates Specialists here, or you can reach Russ at russ.hissom@utilityeducation.com.
The material in this article is for informational purposes only and should not be taken as legal or accounting advice provided by Utility Accounting & Rates Specialists. You should seek formal advice on this topic from your accounting or legal advisor.