Most utilities are well underway in their energy transition plans but large, industry-wide obstacles are still proving to be problematic as utilities navigate financial, regulatory, and technical challenges.
The Smart Electric Power Alliance (SEPA) released the results from a survey that explored the roadblocks utilities are facing, and how they’re attempting to overcome them.
In early 2024, SEPA released its Snapshots Utility Survey to capture data on the utility clean energy transition, as part of its broader Snapshots program. The reports from the Snapshots program provides data across SEPA’s six focus areas: Resilience, Transportation, Emerging Technology, Policy, Energy Storage, and Equity.
The utility survey collected 116 responses from employees representing 80 utilities, accounting for 56% of U.S. electric customers and spanning 46 states. The sample included 31 investor-owned utilities, 29 public power utilities, 18 cooperatives, and two federal entities.
Resilience
Most surveyed utilities reported moving forward with resilience-related efforts.
Most have incorporated front-of-the-meter distributed energy resources (DERs) to enhance grid resilience (89%), hardened power lines, facilities, and substations (82%), and adopted behind-the-meter customer DERs (71%). Most surveyed utilities (88%) conduct a formal cost-benefit analysis to prioritize resilience investments, with 60% incorporating resilience benefits and 27% considering societal benefits.
Additionally, 76% of surveyed utilities reported using sophisticated distribution and transmission system operation and outage modeling software.
However, utilities are still facing challenges in the form of financial constraints, regulations, limited staff, and physical space when it comes to resilience planning. Financial constraints are the number one barrier to implementing resilience-related initiatives, the survey found – 76% of surveyed utilities reported utilizing federal funding.
Transportation
The biggest challenges utilities are facing when implementing transportation electrification initiatives are financial constraints, followed by regulatory and policy barriers, technical and infrastructure challenges, customer engagement and demand issues, and operational and organizational limitations.
On the other hand, utilities are emphasizing enhancing charging infrastructure, developing effective financial strategies, and increasing customer interest in EVs. They hope to achieve their electrification goals by creating public and workplace charging stations, offering financial incentives, and implementing time-of-use (TOU) rates.
Emerging technology
Utility survey respondents most often consider DERMS, virtual power plants (VPPs), hydrogen, and microgrids as the top emerging technologies in 2024. Other notable tech included small modular reactors (SMRs), ADMS, and long-duration storage.
Virtual power plants have proven to be particularly popular, the survey found – 33% of respondents are planning for VPPs and 29% are already piloting, operating, or partnering on VPP projects.
Utilities are also venturing into artificial intelligence and machine learning in an effort to enhance efficiency, data insights, and load forecasting, the survey found. Some utilities are using AI for load forecasting, using computer vision for vegetation management, and using AI-operated customer service centers.
Policy
The survey found that many leading utilities are now publicly disclosing annual carbon emissions data (72%) and reduction plans (67%) and aligning customer programs with state implementation of federal Home Energy Rebates (61%).
The “top-performing” utilities are prioritizing distribution system planning (22%), strengthening internal governance (28%), and supporting large customers in achieving their carbon-reduction goals (33%). All utility respondents report adopting or planning to adopt some type of community or customer-focused carbon reduction activity.
The surveyed utilities listed renewable portfolio standards, tax incentives, and regulations promoting energy efficiency as the most impactful policies – but policy uncertainty, a lack of cohesive national strategies, and bureaucratic delays are “significant” barriers, the survey found.
Energy equity
Utilities are still reporting many barriers to achieving energy equity, with financial constraints, lack of awareness, and infrastructure limitations at the top of the list. Strategies to overcome these barriers include community engagement, targeted financial assistance programs, and inclusive policy-making, SEPA said.
Seventy-eight percent of surveyed utilities report having dedicated personnel for Diversity, Equity, and Inclusion (DEI) or community engagement.
Energy storage
Adoption of emerging energy storage technologies is still low – only 4% of surveyed utilities reported already adopting some type of long-duration energy storage solution.
High costs, regulatory complexity, technological uncertainty, and infrastructural limitations are common barriers to energy storage implementation, the survey found.
Utilities are leveraging various strategies to support energy storage, such as incentive programs for residential and commercial storage, demand response programs, and exploring long-duration energy storage technologies.
Only a few years ago, electric utilities were still kicking the tires on the potential applications of energy storage.
Today, however, the dynamic has dramatically shifted. Utilities no longer want to rely on third-parties for design, engineering, procurement, construction, and maintenance work: they aim to own as much of the project lifecycle as possible. The goal, they say, is to improve efficiency, establish standards, and develop internal expertise. When a battery system fails, utilities require an immediate response, as opposed to hours or days when relying on a manufacturer or supplier, which likely isn’t located in its service territory.
