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Utility Customer Participation, Key to Reaching 2022 Utility Goals

Vanessa Edmonds's picture
Founder & Advisor Appos Advisors & Utility 2030 Collaborative

Founder, Appos AdvisorsCo-founder & Executive Director, Utility 2030 Collaborative. From the impending, clean energy transition to customer experience modernization, regulated utility...

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  • Jan 25, 2022
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This item is part of the Special Issue - 2022-01 - Power Industry 2022 Trends & Predictions, click here for more

As a utility industry researcher and strategist with a passion for helping utility companies evolve, one of my favorite times of the year is when smart folks publish predictions for the year ahead. There is a lot to be learned from these opinion pieces, especially as utilities face never-seen-before transformation challenges.

I enjoy throwing my own “big bets” into the proverbial hat. As executive director of the Utility 2030 Collaborative, my role is to provide problem and solution-based information to the people I’ve committed to helping—utility company decision-makers and solution providers focused on advancing utility customer-centricity. They are being required to participate in the energy transition, manage the growing threat of extreme weather events, and protect customer satisfaction all while maintaining safety, reliability, resiliency, and security, without increasing the cost-to-serve. It’s a lot to manage.

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My predictions aren’t the stuff of crystal balls. They rise out of the hundreds of conversations I have with these people and thousands of articles and whitepapers I read each year.

With that introduction out of the way, it’s time to get started. Here are Vanessa Edmonds’ 5 Big Bets in 2022.

Big Bet #1 – Understanding New Demands Posed by EVs & DERs

The zero-emission share of the U.S. car market will grow from 3% in 2021 to 5% in 2022, reach double digits by 2025, and hit 31% by 2030, IHS Markit forecasts. 

This is a big jump, so how utilities are going to support new grid entrants like EVs, along with DERs, without compromising the quality and equality of customer energy supply is a big concern.

It will require utilities to gain visibility into the secondary (a.k.a. invisible) network.

“The Secondary Network plays a central role connecting assets to a decarbonized grid,” says Chris Law, CEO of Future Grid. “Customers are increasingly and unknowingly impacting supply quality of their neighbors. This impact increases significantly with decarbonization. For example, EV charging may cause a brown-out on the local transformer which cuts off supply to other premises. Rooftop solar can create over-voltage excursions impacting all connected customers and their electrical appliances in the home.”  

In 2022, utilities will be looking for solutions that:

  • Pinpoint where DER or EV is being connected to a secondary network;
  • Understand secondary network headroom and capacity; and
  • Identify actions to maintain secondary network reliability within network limits.

Big Bet #2 - Tech Companies will be Rewarded for Going Green

Utilities are off to the races working towards aggressive carbon reduction goals, but many of the technology companies pledging to support them are themselves lagging in environmental sustainability. As a society, our increasing use of technology has the competing potential to help and hurt the environment.

A growing portfolio of technologies aimed at reversing the damage done by climate change is helping address this challenge. They include everything from well-known innovations like smart meters, electric vehicles, and AI/ML, to lesser-known inventions like biomimicry, waste-sourced biofuel/pyrolysis, and carbon capture. In the article, “Top 10 Technologies that Give Us Hope for a Sustainable Future”, Sadhika Kumar does a standup job of explaining many of these solutions.

What we can’t continue to ignore is how technology is hurting the environment; the carbon footprint of technology is growing rapidly alongside new solutions and users.

My prediction for 2022 is that we will see the rise of utility RFPs asking for details about the environmental sustainability commitments and practices of technology providers. And I don’t think tech companies can risk faking it.  Those who aren’t prepared to provide answers, with proof points, are going to start losing to “greener” competitors.

Big Bet #3 - The Business Case for Cloud Solutions is Expanding

At this juncture, nearly everyone has bought into the business case for the cloud. Security, mobility, scalability, and cost-savings--what’s not to love? True cloud solutions, especially those that are multitenancy and in the public cloud, also happen to be greener than their on-premises counterparts. Benefits of these solutions include a decreased carbon footprint, fewer emissions, and increased use of renewable energy.  

Instead of assuming all cloud solution providers receive the same marks in environmental sustainability, it will be important for utilities to inquire about solution providers’ commitments to efficiency and renewable energy procurements in 2022.

In the article, “The Question Utilities Should be Asking Tech Providers in 2022”, Jim Anderson writes, “During technology procurements, utility decision-makers should adopt a cloud-first mentality, if they haven’t already, and add environmental sustainability to their list of requirements. It will be essential to ask questions about the contributions these solutions are making to global CO2 emissions or lack thereof. Solutions with a low PUE (power usage effectiveness) metric should be prioritized along with those who can show proof of:

  • IT Operational Efficiency;

  • IT Equipment Efficiency;

  • Datacenter Infrastructure Efficiency;

  • Ethical Technology Waste Practices; and

  • Renewable Electricity Procurements.

It will be important to look for leaders in data center energy conservation with accolades from reputable organizations like the Environmental Protection Agency (EPA).”

Like my conclusion in Big Bet #2, cloud providers who can’t answer these questions will start getting passed up for “greener” providers.

Big Bet #4 - Rise of Reverse Demand Response Programs

As utilities aggressively pursue the energy transition—replacing carbon-producing energy sources with renewables—overgeneration concerns will mount.

During times when there is plentiful sunshine and wind, more prevalent in the spring and summer, there will be episodes where we have more electricity than we can possibly use. When supply exceeds demand, and there is no market intervention, generators and certain motors connected to the grid will increase rotational speed which can cause damage to assets.

While demand response programs incentivize customers to use less energy when the supply is low, reverse demand response programs motivate them to turn up demand during times when we typically see overgeneration.

“The shift to renewables is imperative to reaching carbon reduction goals, but they may pose a threat to the reliability of short-term energy supply and load,” writes Adam Smith in the article, “Rally Utility Customers Towards Carbon Reduction Goals”.  “Utility companies can manage their instability through:

  • Demand response programs to reduce consumption when less energy is available; and
  • Reverse demand response programs to increase consumption when there is an excess of renewable energy supply. This is important because overgeneration damages equipment connected to the grid and requires manual intervention of the market to maintain reliability.”

Big Bet #5 – The Customer-Centricity Imperative will Continue to Grow

I am wrapping up this article with Big Bet # 5, “The Customer-centricity Imperative will Continue to Grow” because utility customer participation will be essential to the realization of goals across the entire utility enterprise, including those mentioned in Big Bets 1-4. While goal realization will deliver an abundance of new opportunities for utility customers, the risk of overwhelming them is very real.

For this reason, simplifying growing complexities of the utility/customer relationship will be a primary focus among all departments. It will involve the continuous advancement of CX and workforce management with help from customer personas, customer journey mapping, voice of the customer (VOC) programs, behavior change programs and technologies, and more.

Make the Call

Yes, utilities are facing unprecedented, and often overwhelming, transformation challenges. The good news is that there is an entire industry of supporters ready to help. In addition to industry solution providers, the list includes industry thought-leaders providing predictions for the year ahead. All you need to do is pick up the phone and ask for help.

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Todd Carney's picture
Todd Carney on Jan 27, 2022

Vanessa, I really enjoyed this post. I appreciated how many different areas you covered and how much thought you put into your predictions. I agree that companies are and will continue to be rewarded for going green. My only concern is that environmental problems can be like whack-a-mole, where you solve one problem, another emerges due to new technological developments. An example is how 5G is more energy efficient than 3G, but the increase use of technology from 5G will increase energy consumption. Do you believe companies will have strategies to combat these issues?

Vanessa Edmonds's picture
Vanessa Edmonds on Feb 4, 2022

This is a great question. There is no easy answer because it will require tenacity and time.

Although a company may decide to go green, it doesn’t mean their vendors share their ideals. So, to avoid the “Whack-a-Mole” conundrum you referenced, businesses need research vendors and establish new value chains with sustainable-thinking folks responsible for legal amendments, evolving consumer behaviors, distributional effects, infrastructure developments, and fresh business models. They will need to consider the different policies’ roles in the innovation systems and address important interaction effects. 

Mark Wilkinson's picture
Mark Wilkinson on Feb 1, 2022

It's nice to hear more utilities asking questions about CX and programs that centers the customer experience perspective in the decision making.  Especially when utilities consider self service and new digital programs for their next generation of customers, getting their perspective squarely aligned early in that process can make all the different.   And, you are entirely correctly, if not customer centric, a lot of utilities will struggle with escape velocity on their other projects and programs.   Great read.

Vanessa Edmonds's picture
Vanessa Edmonds on Feb 4, 2022

Thanks for the comment, Mark!

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