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6 Predictions for 2022

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Stuart McCafferty's picture
Lead Architect, eaaS Siemens Smart Infrastructure CTO

2021 Cleanie Award winner. Siemens Smart Infrastructure CTO Office, technologist, distributed energy expert, researcher, author, and climate change warrior. Genuinely focused on doing good for...

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  • Jan 25, 2022

This item is part of the Power Industry 2022 Trends & Predictions - January 2022 SPECIAL ISSUE, click here for more

Well, another year has passed.  2021 is in our rearview mirrors, and for many of us, we are glad to see it go.  2022 is another opportunity for hope and, of course, some predictions for the electricity industry’s year ahead.  So, here’s my shot at it.

Volkswagen has committed $86B in next 5 years to fleet electrification and autonomous car technology (source: Reuters)

1. Electric Vehicles take center stage – Ok, this is a no-brainer. All the planets are in alignment for the biggest year ever for EVs, and really, the beginning of the end for Internal Combustion Engine (ICE) vehicles.  The US government has committed $7.5B for EV infrastructure.  Tesla plans to deliver 1M vehicles in 2022.  Ford has committed $30B to EV R&D and is advertising its Vehicle to Building (V2B) Ford F-150 Lightning.  GM has committed $35B to V2x (Vehicle to everything) program.  Nissan $17.6B.  Toyota $35B.  Volkswagen a stunning $86B with the plan that 25% of their sales by the end of 2026 are EVs.  By the end of 2022, charging anxiety will decrease as the charging infrastructure increases another 33% from 2021 levels and ranges continuously increase.  The number of consumer choices for EV options will double by the end of 2022 as the large auto manufacturer’s investments and capabilities grow.  And, of course, Tesla continues to roll. 

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2. Enormous investments in clean energy – Another no-brainer.  The US government has committed more than $65 billion in clean energy transmission and distribution – the largest investment in American history in clean energy.  Perhaps the less obvious investments are by the private sector.  Major and minor private equity and investment firms are funding clean energy projects, purchasing assets, and investing in startups.  It is an exciting time to be in the energy business!  By the end of 2022 and throughout 2023, we will see the results of those investments primarily with grid-scale batteries, solar, and wind.  Duh.  But, there will also be progressive utilities that look to leverage Behind the Meter (BTM) assets to support grid operations and potentially DER aggregator opportunities in the bulk energy markets.

3. Virtual Power Plants (VPP) gain foothold in utility strategies – The number of Distributed Energy Resources (DER) owned by customers and third party DER Aggregators will grow tenfold over the next 3 years.  As utilities begin to reconcile with that fact, they will embrace the obvious ability of VPPs to support grid operations with a variety of grid services and potentially even allow the utility to act as the DER Aggregator in bulk markets to grow their profit margins.

4. Return to work – Americans and the rest of the world are learning to live with the COVID-19 pandemic even as the number of cases increases.  Like most other industries, the Electricity Industry took precautions to protect its workers with Work from Home (WFH) policies.  The industry has proudly continued to perform its work and support its customers.  However, no one would say that it was an optimal situation.  And, with 2022 being a truly transformational year with lots of investment dollars out there for NEW clean energy infrastructure, it will require collaboration within the utility and outside the utility with vendors, customers, and government on a scale not seen in history.  2022 is going to be BUSY!  It will require brainstorming and in-person meetings.  Whiteboard sessions will return to the utility workspace.  I predict that by June 1, 80% of utilities will have discontinued their WFH policies and require its workforce to be present in offices.

5. Commercial and Industrial (C&I) utility customers opt-out for microgrids – The growing concerns of climate change and environmental events (storms, fire, drought, sea-level rise) that could affect traditional electricity delivery will continue to grow.  Power Purchase Agreements (PPA) provide C&I customers with compelling opportunities for electricity resilience through a local microgrid solution that can also provide economic benefits with stable, predictable costs.  It also allows the C&I customer to control its own clean energy goals to meet sustainability goals and promises.  Vendors will continue to grow their capabilities and the “cookie-cutter” third-party managed microgrid is quickly becoming reality.

6. The Year of IoT – The Internet of Things will emerge within the utility community as the way to manage the scaling issues with traditional operational systems.  IEEE 2030.5, a DER communications IoT standard – already the default DER standard in California – will become the de facto standard across the US for communicating with individual and aggregated DER.  Traditional utility vendors will begin supporting 2030.5 natively in its products.  EV integration with the grid (V2G) will look to 2030.5 as the mechanism for utility communications.  BTM assets will rapidly adopt the 2030.5 standard to ensure interoperability of their systems.

In general, 2022 will be a transitional year.  Lots of investments, obviously.  But, we won’t see most of the fruits of those investments until – at the earliest – the end of 2022.  More likely, 2023 shapes up to be a very interesting year for the Electricity Industry, and it will all depend on how well our industry plans and makes its investments.  Let’s hope we are up to the challenge.


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