Jon Brock, Account Director, ISG Energy & Utilities
The Infrastructure Investment and Jobs Act, which was signed into law on November 15, allocates approximately $72.5 billion for the utilities and electric vehicle charging industries. The legislation will meaningfully impact utility information technology (IT) and operational technology (OT) and will require careful grid management to ensure capacity is in place for large infrastructure projects.
The utility industry last saw an influx of capital investment from the U.S. government through the American Recovery and Reinvestment Act of 2009. That bill allocated approximately $4.5 billion, which was matched by the industry for a total investment of $9.5 billion and resulted in what we now know as AMI 1.0, or the Advanced Metering Infrastructure’s initial implementation.
Related: Study: Recovery Act boosts electricity demand, helps modernize grid
Investment Specifics
The 2021 infrastructure bill targets electric vehicle (EV) infrastructure, power infrastructure and the electric grid. Official communication from the White House says:
“The bill invests $7.5 billion to build out the first-ever national network of EV chargers in the United States. The bill will provide funding for deployment of EV chargers along highway corridors to facilitate long-distance travel and within communities to provide convenient charging where people live, work, and shop. Federal funding will have a particular focus on rural, disadvantaged, and hard-to-reach communities.”
Also, within the legislation is about $65 billion that constitutes the single largest investment in clean energy transmission in American history. The White House communication explains:
“It upgrades our power infrastructure by building thousands of miles of new, resilient transmission lines to facilitate the expansion of renewable energy. It creates a new Grid Deployment Authority, invests in research and development for advanced transmission and electricity distribution technologies, and promotes smart grid technologies that deliver flexibility and resilience. It invests in demonstration projects and research hubs for next generation technologies like advanced nuclear, carbon capture, and clean hydrogen.”
Electric Vehicles and Their Impact on the Distribution Grid
The bill emphasizes electric vehicle (EV) adoption and EV chargers. According to the International Energy Agency (IEA), the U.S. trails both China and Europe in total EV numbers (including battery and plug-in hybrid EVs). The current administration, through this bill, is focused on increasing EV adoption in the U.S.
Read More: Harris unveils plan for electric vehicle charging network
The U.S. market share of plug-in EV sales is one-third the size of the Chinese EV market. This bill is attempting to put infrastructure in place that will encourage EV adoption in the U.S. EV adoption has some significant implications for the utilities industry, as summarized in this diagram:
For the past five to ten years, U.S. utilities have been modernizing an aging grid that was built to withstand the highest load day of the year and was based on large, centralized generation with predictable load. Part of this modernization includes a the ability t to manage distribution power flows that fluctuate based on distributed energy resources (DER) and rapidly changing load patterns, like many EVs charging at the same time. Enter the Advanced Distribution Management System (ADMS).
ADMS includes — or integrates with — multiple functions in the utility infrastructure such as outage management, fault location, isolation and restoration, Volt-VAR optimization, demand response and integration of DER such as solar and battery storage systems. Aging GIS systems may also need to be upgraded or replaced. A fundamental ADMS purpose is to maintain distribution grid stability when fluctuations occur. EV charging exacerbates the fluctuations and thereby impacts grid stability. These factors mean that the ADMS, more now than ever before, is a vital piece of the emerging utility infrastructure and modernization projects that will be accelerated with the passage of the infrastructure bill.
How Utility CIO and COOs Should Prepare for the Future
With the passage of the infrastructure bill h, it is only a matter of time before projects will be proposed for funding. Forward-thinking utilities should be updating roadmaps and assembling teams to ready their operations for future disruptions that EV charging could cause.
As it pertains to the ADMS, utility CIOs/COOs should:
- Identify whether your utility will be applying for funds. Many of the projects will be larger than during the ARRA of 2009 (capped at $200 million) and will include pipes, wires, equipment and hardware. Those projects will require a software component as well as the design, build, implement and support activities that undergird all technology-based solutions.
- Partner with the operations business unit. In many utilities, the ADMS resides or will ultimately reside in operations as operational technology. IT and OT partnerships are nothing new and have become a trend in recent years. Not only will the ADMS belong in operations, so will its functions and possibly other applications such as Outage, FLISR, Volt-VAR, DR, EV apps and DER management systems (DERMS). Even if a system was upgraded as recently as five years ago, operational engineers may have concerns about its ability to keep up with the changes that will happen over the next few years.
- Review and update your operations application roadmap. Many utilities already have an applications roadmap that includes plans for the retirement, upgrade or replacement of specific technologies. This bill may change your priorities and the window to apply for federal funding will be open only for a short timeframe. Ignoring this could put your utility at an operational or financial disadvantage.
About the Author
Jon Brock is an internationally recognized expert on best practices in utility business process and technology, with extensive experience in helping top global companies redefine themselves. Jon’s expertise spans a wide range of disciplines, including strategic planning, business development, operations, product management, process re-engineering, organizational restructuring, benchmarking, regulatory/testimony, financial analysis and strategic alliances. He is known as a seasoned, confident communicator who is able to inspire positive change, empower cohesive teams, and maintain an extensive network of executive-level partner and client relationships.
