Future of Electric Utility Industry

Electric utilities' major changes are like a slow-moving tsunami. The growth of electric vehicles, the expanded use of renewables and the egress of smart, distributed power systems have been well-reported for years.

FREMONT, CA: Electric vehicles are normally evolving on our streets. Maybe there's an electric car in your system or electric buses in your city. Years ago, lesser than 20,000 electric vehicles were on global roadways. That number will exceed eight million this year.

The pandemic is not slowing EV sales. On the contrary, consumer interest in electric vehicles is growing rapidly as long-range battery capacities exceed 200 miles, and many cost-effective models enter the market.

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Using electric vehicles in corporate and municipal vehicles directs the way, as companies like Amazon and DHL devote themselves to electrifying their fleets. For a decade, some countries, states, and cities have designed outright bans on internal combustion cars. San Jose, Denver, CO, CA, and Austin, TX, collaborate with state, county, regional, and utility stakeholders to design a strong regional charging infrastructure.

The influence on electric utilities is profound. California projects that EVs will represent more than 5% of the state's electricity intake by 2030. A latest U.S. Department of Energy study items to electric vehicles as the main reason that national electricity intake will increase by 38% by 2050.

But another main shift is underway: the long-time-coming transition apart from centralized fossil fuel-powered generation to distributed renewable energy production.

Renewables Reach Grid Parity

Renewable energy is the swift-growing energy source in the United States, rising 100% from 2000 to 2018, making up over 17% of net electricity generation. For years, renewables growth has been operated mostly by renewable portfolio standards and state mandates like California's Senate Bill 100.

The legislation requires that 50% of the state's electricity come from renewable generation by 2025 and the state to rely completely on zero-emission energy sources by 2045.

But as the renewables market has grown, technologies have enhanced, and prices have dropped. Today, renewables just make good economic sense. Solar and wind are now the most convincing sources of electricity, period.

After analyzing recent data from two of the country's largest electricity markets, ERCOT in Texas and PJM in the Northeast, Rocky Mountain Institute ended that utilities are adding renewables to the grid faster than any other electricity source, even natural gas. So the age of renewables is here.

The New Essential: Managing Peak Loads to Enhance Resilience

Historically, renewables have developed some challenges for utilities. Renewable power is intermittent, so production timing does not often match demand (though this is largely solved with the addition of battery storage).

Electric vehicles are normally plugged in during the evening when drivers leave work. Regrettably, that's exactly when power-thirsty appliances and air-conditioning systems are also being flipped. Left unmanaged (i.e., without consumer involvement in a Time-of-Use plan), electric vehicle power can double a home's energy use.

Above supply and demand shifts from renewables and EVs, electricity demand is also evolving constrained because of more frequent natural disasters tied to climate change.

But innovative technologies such as energy storage, demand response software, and electric vehicle charging software can interact with energy markets to help utilities reduce demand and balance the grid.

Smart, Distributed Energy Assets Turn Consumers into Prosumers

Commercial energy users have become unbelievably sophisticated when it comes to energy management. Currently, it is not unusual for a company to have onsite renewables and energy storage, a smart building management system that optimizes operations for energy efficiency, demand response software that can answer utility signals to decrease electricity use, and JuiceBox Pro smart EV charging stations that can interact with the grid to take benefit of lower time-of-use rates.

Residential consumers are also getting smart about electricity. A modern home's tech stack already incorporates app-based learning thermostats, appliances, and lighting.

Commercial and residential customers are turning into prosumers who consume and produce electricity by taking control of their energy use and becoming active participants in energy markets through smart software and digitally connected devices.

How to Get Ready

Hence, a picture of the electric utility industry's future is clear. Growing demand because of the electrification of transportation. Smart homes and buildings. Solar, wind, battery storage, and microgrids. Integrating distributed, intelligently-controlled energy assets that interact with the grid increases efficiency, flexibility, and reliability.

What's necessary now is a new breed of software and professional services to support all stakeholders manage this once-in-a-century change. The waves still have not crashed onshore. Yet utility service operators, businesses, and fleet managers must prepare now.

With the right tools and expertise, a future that may at first look threatening is full of huge opportunities as the power industry evolves more resilient, sustainable, and efficient.