4 Methods of Meeting Energy Demands in 2022 and Beyond
- Jan 25, 2022 4:39 pm GMT
This item is part of the Power Industry 2022 Trends & Predictions - January 2022 SPECIAL ISSUE, click here for more
How can the nation's electric grids support rapidly changing energy needs?
Much of the current electrical infrastructure in the United States was built between the 1950s - 1970s. As personal electronics, IoT devices and electric vehicles entered the mainstream, the need for reliable power and stable connectivity has grown exponentially. The aging electric grid can no longer sustain current levels of energy usage and may be unprepared to withstand future needs.
As the new year begins, energy leaders will focus on 4 key initiatives to prepare the electric grid and ensure their organizations are equipped to meet the needs of the rapidly changing energy sector.
1. Upgrading Utility Transmission & Distribution Systems
Now that the United States Government has passed the $1.2 trillion Infrastructure Investment and Jobs Act, federal funds can be allocated towards making significant upgrades to utility transmission and distribution systems in key areas such as:
- EV charging stations
- Undergrounding programs
- Grid hardening initiatives
- Cyber security measures
By focusing on these critical areas, energy companies can create more stable power, reduce long-term risk of weather damage and cyber threats, and better prepare for the future.
Electric Vehicle (EV) Charging Stations
According to the International Energy Agency (IEA), there were over 10 million EVs on the world’s roads in 2020, with consumers spending upwards of $120 billion on new EV purchases. With the expected increase of EVs in 2022 (and beyond), the need for a multitude of charging stations is essential.
Utilities should invest in building commercial and home-based charging stations and along federal highways.The creation of commercial and residential charging stations is critical for the long term growth of EV’s and the resulting reduction in fossil fueled vehicles. To further support this effort, utilities should invest in both overhead and underground distribution infrastructures and reinforce existing systems to address new EV loading.
One of the biggest concerns over undergrounding is the expense and its short-term and long-term financial implications. Federal funding can help mitigate this cost significantly. By undergrounding transmission facilities, electric utilities can reduce maintenance costs and power outages, leading to increased cost savings and improved customer satisfaction.
The undergrounding of both transmission and distribution facilities will also act as a critical preventative measure against wildfires, especially in areas which have previously been impacted by them. These deadly and costly events can be dramatically reduced by the undergrounding of conductors.
Grid Hardening Initiatives
Extreme weather and the associated economic impact have highlighted the need for grid hardening initiatives. Energy companies can rebuild local distribution systems with stronger poles and fully insulated conductors to withstand environmental impact from storms and floods.
When the Texas storm crippled the state’s electric infrastructure, there were insufficient plans in place to supply energy from outside the state. To prevent a future occurrence, state and federal governments must create better plans and upgrade the transmission system throughout the U.S. to better support the free transfer of energy nationally. The new federal infrastructure bill will provide the funds to meet this critical need.
Cyber Security Measures
According to an IBM threat intelligence report, the energy sector is the second-most vulnerable industry for data theft and in 2020, was the third most attacked sector by volume. As cyber criminals employ more sophisticated tools to gain unauthorized access to essential infrastructure, energy leaders must focus on putting serious resources into preventing the sabotage of electric systems from hackers and rogue states around the world.
With the Colonial Pipeline ransomware attack still fresh in the public mind, close attention is being paid to how energy companies are handling cyber threats. Now with the creation and implementation of microgrids and small solar and wind farms, the need for cyber security has never been greater.
During the last decade, large electric utilities have invested heavily in cyber security. As we move into the realm of numerous small renewable generation facilities, the need for these new facilities to incorporate cyber security is critical for the safe and secure future of the U.S. electric system. Funds from the federal infrastructure bill must be allocated towards supporting these new renewable energy generation facilities to ensure that the entire electricity system is protected from foreign and domestic cyber attacks.
2. Increasing Applications of Solar and Wind Farms
As the global push for renewable energy increases, energy companies will focus their efforts towards making renewable energy a reality.
However, there are a number of limiting factors that can influence the location and construction of renewable energy facilities. The ideal locations are typically at odds with the need to build facilities near existing utility load pockets. The availability and cost for property available in these areas are typically prohibitively high and impact the ability to ensure a reasonable return on investment.
Since site availability is greater in more remote sections of a utility’s service area, the associated costs to build transmission and distribution infrastructure to move the renewable energy adds to the overall project cost. Locating and developing sites is fraught with issues such as community opposition due to local concerns for aesthetics and the disruption to the environment.
Additionally, utilities may not be fully equipped to build construction sites with the requirements necessary to support renewable energy sites, and which may conflict with their own renewable energy goals.
To combat these obstacles, energy leaders must seek local, state and federal government support to site new solar and wind farms. They should also galvanize support from local community leaders who can act as sources of influence to back renewable energy plans.
3. Ensuring Fair Utility Operating Costs
Traditionally, consumers rely on utilities’ existing infrastructure to provide access to energy throughout the system. The costs to maintain the distribution system are typically recovered via an energy usage fee charged by the kilowatt hour for energy used.
Under the traditional Utility Distribution model, all of a utility’s customers bear the burden of these costs based on their individual usage patterns. With the growth of rooftop solar facilities being installed, traditional cost sharing is being shifted to the customer base that can not afford (or desire) to install renewable energy facilities on their homes.
Consumers drawing power from solar and/or wind farms often expect to use the distribution system to sell their excess power back to the utility and use the utility’s infrastructure on cloudy or windless days. Therefore, the need to develop and implement a cost recovery model for the periodic infrastructure usage patterns needs to be developed to ensure an equitable cost sharing model for all customers.
Energy companies will need to create new billing mechanisms to ensure normal utility operating costs are equitably leveled on solar customers rather than being shouldered by traditional utility customers. In this way, both the utility and the consumer can ensure costs are covered fairly.
4. Reducing the Costs and Time of Energy System Upgrades
While the necessity of system upgrades and improvements is clear, the expense and the time frame to complete such work can be high.
Existing utility accounting processes include the use of capital funds such as CWIP (Construction Work In Process) for routine short cycle work and AFUDC (Allowance for Funds Used During Construction) for longer term construction projects. Energy leaders and financial executives are looking at ways to significantly reduce these costs.
The costs of utility construction projects are directly tied to work order, as-built and close-out processes. Capital projects which rely on paper-based methods experience longer project closeout processes, typically caused by:
- Delays in receiving paper documentation from field and contractor crews
- Delays in supervisor work order approvals
- Delays in clerical processing of completion data into work management systems
- Delays in delivering completed work order documentation to the GIS / mapping organizations and updating into system of record
- Human errors, which result in missing or inaccurate data
Such delays cause bottlenecks in operational efficiency and impact the availability of data for updating OMS, ADMS, fixed asset and asset repository systems.
With the advent of Digital Construction Management technology, utilities no longer need to rely on slow processes. By implementing advanced digital solutions for field data collection, energy companies ensure that their infrastructure construction projects include high accuracy data, simplified workflows, automated material reconciliation, and ultimately, faster close-outs.
As the new year begins, there is ample opportunity for energy companies to apply sophisticated technology to solve their most complex challenges now and in the future.
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