By Sofia Sauvageot, Industries Network Leader for Utilities at Hitachi Energy
Utilities are at an inflection point. Renewable energy continues to own center stage, as underscored recently (and rightly so) by the US infrastructure bill and COP26. But despite all the progress, power providers still face myriad challenges, from employee shortages to cyber threats.
So where are we heading in 2022? Some of my predictions might surprise you.
A “forgotten giant” gets its second act
Recent studies show that global electricity consumption will more than double from 20% today to over 40% of total energy demand by 2050. The supply necessary to support this will come from a variety of sources, with wind and solar taking the lead. But in the year ahead, it will also be important to support other energy sources such as hydropower and nuclear as key enablers to reaching our carbon-neutral future.
A recent IEA special report dubbed hydropower as the “forgotten giant” of low-carbon electricity generation. Hydropower, the planet’s “first” renewable resource, has benefits beyond being carbon-free; it has long-term storage capacity, is able to ramp generation up or down quickly in response to consumer demand and can provide stable supply that offsets the intermittency of variable energy resources such as renewables.
Because of these benefits, hydropower is poised to see its own second act as a generation source; however, as the IEA report highlights, significant investment is needed. For example, Hydro-Québec’s $570 million upgrade to its Carillon hydropower plant in Canada is underway. Like Carillon, many hydro systems around the world are over 50 years old, so utilities and policymakers will need to focus on funding, redesign and technology that can unlock hydropower’s potential leading role in the energy transition. As stated in an IEA report, the modernization of all ageing plants worldwide would require $300 billion of investment between now and 2030 – more than double the amount we currently expect to be spent on this.
It turns out the mission itself is critical
Data from a Microsoft survey indicate that 41% of workers globally are thinking about giving notice, making 2021 the year of the “Great Resignation.” But even before this trend emerged and got a name, the electric industry struggled with employee shortages and skills gaps. As we look to the future, though, shifting demographics and worker expectations could have a positive, even transformative, impact on the industry.
Members of today’s talent pool — in particular, women, Gen Y and Gen Z — want to work for companies that share their personal values and focus on sustainability. Emotional commitment drives their performance more than salary. These potential employees look at a company’s purpose, core values and sustainability vision before they apply or decide to join. This presents tremendous opportunity for utilities, at the forefront of the energy transition, to recruit fresh, sustainably minded talent equipped to take utilities into the next millennium.
To succeed with the energy transition, we need diverse teams capable of thinking out of the box and going beyond the traditional way of thinking.
And P.S. All that mission-driven work needs digital tools as easy and intuitive to use as your new employees’ smart phones.
Digital twins will be the new cyber “stunt double”
As the scale and impact of cyber threats continue to grow exponentially, utilities need to challenge the paradigms that brought them success in the past. Legacy and remote equipment pose huge vulnerabilities for power providers as do decentralized generation sources like wind and solar farms.
Utilities will look to digital technologies for needed security oversight and automation. Digital twins will play a key role in 2022 by helping control operators have complete asset oversight. This level of visibility will pivot cybersecurity strategies from simple prevention to advance detection. The ability to “see” each asset while also having access to needed historical data will turn every operator into a security agent. They’ll be able to support protective measures and keep us all safe and with reliable power supply.
The revolution will be simplified
Prosumers have always been linked to the shift from unidirectional to the bi- or perhaps, omni-directional power flow characteristic of the modern grid. Today, however, the energy prosumer, like the industry itself, is hungry to take even more direct action to combat climate change and its impacts.
But regulatory and bureaucratic barriers can be overwhelming. I’ve experienced this in my own life as my family and I are renovating an old farmhouse to rent out. During the project, I have installed solar panels, a recycled water system and electric vehicle charging. My professional and industry experience have helped me manage the (unbelievably) complicated process, permits, and red tape. Without this background, I might have given up.
All of us on the planet are responsible for fighting climate change, but prosumers face too many obstacles to empowerment. In the coming year, focus must shift to radically simplifying regulations and opening access to a new generation of citizen activists.
Utilities will see a lot of change in 2022, from a focus on hydrogen to integrating in more prosumers. However, it will usher in the change the industry needs as we embark on the journey to combat climate change and create a sustainable, electrified future.
About the Author
Sofia Sauvageot is the Group SVP Industry Network Leader Utility and Global Account Manager for Hitachi Energy. Sofia joined the company (then ABB) in January 2019 after 19 years working at organizations like Alstom, Converteam and GE. Sauvageot has a strong background in electrical drive trains, renewables and the marine business, and is a seasoned expert in global strategy creation and execution. She is driven by the voice of the customer. Inclusiveness, diversity and integrity are her core values.
