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Utilities Face Challenges with Aging T&D Grid

Written by Lee Cocis, SGS Maine Pointe Managing Director, Energy & Utility

Utilities Face Challenges with Aging T&D Grid, along with Opportunities Created by Digitization and New Technology featured blog image (december 2022)_2000px

Risks from weather, terrorist attacks, and cyber threats are growing

The latest US Department of Energy report notes that the United States has one of the world’s most reliable, affordable, and increasingly clean electric systems for power generation, transmission, and distribution, but it faces significant vulnerabilities with respect to physical threats from severe weather, terrorist attacks, and cyber threats.

The winter 2021 mega-storm in Texas left millions without power. Grid failures the past wo summers parked devastating wildfires amid California’s record drought. “Electricity infrastructure is often more vulnerable to physical shocks such as extreme weather events than pipelines and underground  storage  facilities,  and  climate  change  is  likely  to  put  increasing pressure on electricity systems,” according to a report  by the International Energy Sector. The report called for a net-zero carbon grid by 2050, fueled by hundreds more gigawatts in renewable sources.

An aging and overtaxed system requires upgrades

Utilities, policy makers, and communities have agreed for years that the aging electric transmission and distribution (T&D) grid in the United States needs to be significantly upgraded to withstand the challenges of the future. That goal demands a transformation. Yesterday’s hundred-year-old grid — a one-way system from a few big power plants to many users — must morph into a two-way, flexible, distributed network connected to homes and buildings that sport solar panels, massive batteries, and electric vehicles.

Recent events and trends across several fronts have made the situation more urgent than ever:

  • Customer needs are evolving, sharply accelerated by COVID-19. Operating the grid safely and reliably at a low cost has long been pivotal for T&D operators.

  • Increasing operational risks are changing the calculus for new investments. Climate change and cyberattacks pose increasing levels of risk—and they are here to stay.

  • Distributed energy resources are changing the grid’s value proposition. The T&D grid faces increasing pressure to integrate new technologies—such as electric vehicles (EVs), distributed solar generation, and energy storage—in a rapid, safe, and low-cost way.

  • Grid-technology innovations are creating opportunities to drive value across T&D workflows. While utilities have already gone through several rounds of investments in grid-modernization technologies, today, advanced cloud technology, software engineering models, data collection and AI for real time decision making, and data-governance practices are paving the way for transformational use cases that cross the boundaries of individual systems.

“AI will play a crucial role maintaining stability for an electric grid that’s becoming exponentially more complex with large numbers of low-capacity, variable generation sources like wind and solar coming online and two-way power flowing into and out of houses,” said Lee Cocis, Managing Director Energy & Utility at MGS Maine Pointe.

TVO maximizes the ROI of technology

Although new technology always catches the eyes of management and investors, SGS Maine Pointe has found that many digitization initiatives have a higher level of sustainability when the entire ecosystem, including people and processes, is well aligned for the new environment. Those initiatives also see greater levels of success when technology is an enabler to expedite and scale operations to achieve the desired financial and operational outcome. Moreover, given the changes ahead, experts say the grid must expand to autonomous control systems that gather data at every node and use it to respond in real time.

The SGS Maine Pointe Total Value Optimization™ (TVO) framework addresses those challenges.

TVO drives that alignment by ensuring that procurement, logistics, operations, and leadership planning reach maximum maturity in unison, without silos that interfere with the flow of timely, reliable, trustworthy data. For example, both IoT and AI generate data that can help utilities to accelerate their response if a grid goes down—but only if that data makes it to the right people at the right time.

Thus, TVO also aligns people, processes, and workflows. Utilities that are focused on driving acceleration in the digital transformation space must first look to enable their workforce to make better informed decisions in real time. Those utilities will remain competitive by aligning decisions with agile processes and technologies that support revenue growth, cost savings to their customers, resiliency, and improved sustainability.

TVO enables a digital transformation which is adaptable, flexible, and vendor agnostic, and is designed to work with next generation technologies and solution partners in our global ecosystem. It helps utilities achieve deep business insight in weeks and months rather than the years of traditional initiatives.

 

Written by...
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Lee Cocis

Managing Director of Private Equity

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