A new survey of the electric industry shows “immense” opportunity in renewables and sustainable infrastructure, while cybersecurity and regulations are still the source of unease.
In its 18th-year of Black & Veatch’s 2024 Electric Report, survey respondents discussed how climate events increasing in frequency and severity, cyberattacks that are more sophisticated and potentially damaging, and a rise in data centers all are adding pressure to power providers. Respondents felt that new federal funding and regulations have increased opportunity and incentives for the industry to modernize and become more sustainable, though more than half of respondents (54%) see regulation as a challenge.
“The 2024 Electric Report encapsulates a state of the industry that allows utilities to better understand how their peers approach modern challenges,” said Jim Doull, Executive Vice President, now leading Power Providers sector. “While regulations and funding move forward, each electric utility may find itself following different paths when it comes to accessibility or prioritization, and this report offers the necessary insight to understand what comes next in advancing the future of U.S. energy.”
Cybersecurity
Seven in 10 respondents report at least some level of confidence in their utility’s ability to recover from a cybersecurity attack, which appears to indicate a reactionary response instead of a proactive plan, Black & Veatch said.
Cyberattacks targeting U.S. utilities spiked 70% this year, with 1,162 attacks reported through August, compared to the same period last year, which saw 689, according to Check Point Research, as reported by Reuters.
As Reuters notes, none of the attacks so far have “crippled” a U.S. utility. But with cyberattacks targeting critical infrastructure on the rise, the clock is ticking.
Nearly 38% of 445 utility companies globally had weak cybersecurity management programs as recently as 2022, according to recent research by Morningstar Sustainalytics. The figure did improve to nearly 27% in 2023, but Sustainalytics said it believes cybersecurity has become a major concern for utilities companies, according to the report, The Downside of Digital Transformation for Utilities: Data Privacy and Cybersecurity Risks.
Among the recorded incidents affecting the companies tracked in the Morningstar Sustainalytics to date, the majority of data privacy and cybersecurity incidents in the utilities sector involved breaches that compromised thousands of customers’ personal information.
Grid modernization
When survey respondents were asked when they anticipate various factors to be drivers of grid modernization for their organization, renewable energy penetration emerged as the most significant current catalyst at 57%, followed by low probability/high impact events (e.g., weather) at 43%. Renewable reliability at a large scale is also a leading issue for utilities, given their intermittency.
AI, data center demand load growth
When asked about load forecasting, 45 percent of respondents say they have no confidence or are not very confident in their forecasting for data center loads, perhaps due to the large amount of uncertainty that can come with data center power requests and expectations.
Data centers have proliferated on the commercial power landscape, and their load requests – from several hundred MW to 1 or 2 GW – are exponentially larger than anything previously seen.
Severe climate events
When asked if resiliency is being given more consideration in utility’s investment decision-making, nearly 80% of respondents reported “yes,” demonstrating a proactive approach by utilities in making progress in their resiliency efforts.
“By assessing where the electric industry is on an annual basis, we are able to better track emerging trends, as well as where the industry has seen pain points throughout the years,” continued Doull. “With the rise of artificial intelligence (AI), we see increasing demand for data centers – challenging the grid to keep up with load growth – which also brings a need for IT and OT cybersecurity, making today’s challenges look different than they did nearly 20 years ago, when we first published this report.”
Read the full 2024 Electric Report here.
