There’s little controversy among electric utility professionals that today’s grid needs to evolve to meet expectations. Edison’s hub-and-spoke design of local distribution systems, from power plants out to consumers, has been universally accepted. But as a recent report from a leading smart meter and sensor manufacturer points out, while most agree a new system is needed, thoughts on how that evolution will happen can vary widely. This survey doesn’t offer solutions, but it does provide insight into the challenges utility executives and regulators see as the industry seeks to move forward into a fossil fuel-free future.

“Powering the Energy Transition: Insights from Utilities and Commissioners on Creating the Future Grid” is the latest in Liberty Lake, Wash.-based meter maker Itron’s annual series of Resourcefulness Insight Reports. The transition the report describes is at least twofold. Yes, the move to renewables, including the needed transmission upgrades and intermittency management strategies, is part of it. But it also includes growth in distributed energy resources (DERs), such as rooftop solar panels and battery storage systems, which utilities must learn how to appropriately integrate, incentivize and manage.

Utility executives completed 250 online surveys for the report, and editors of Public Utilities Fortnightly interviewed 10 state utility commissioners in a sampling of states representing all four U.S. census regions. Both groups see this time as significant for the utility industry, with 88% of executives rating the transition as extremely or very important. The public is seen as a key driver of current changes, along with environmental concerns and cost savings as renewables become less expensive. But there’s also agreement that we’re in the early days of adoption, with only 10% of utility leaders saying their utility has fully implemented its transition plan. Another 36% reported they were currently ready to work on their plans, while almost half have a plan but haven’t begun implementing it or are still in the early planning stage.

Commissioners and executives have some similar concerns regarding risks and barriers related to the current energy evolution, but they see them through the lenses of their respective roles. For regulators taking a big-picture approach, reliability and resiliency, resource availability and adequacy, affordability and economic and transmission capacity are list-toppers. Executives, though, are focused on their individual utilities’ issues, and half of them said the need for infrastructure upgrades and grid modernization was their company’s biggest barrier to moving forward. Regulatory approval processes and upfront investment costs came next in line, followed by reliability and resilience worries.

Participants also concluded that the role consumers will play in the energy transition will be important and complicated. The biggest number of utility respondents (43%) see their customers as critical to solutions, by driving demand for renewable energy, energy efficiency and DERs, with their behavior significantly affecting transition success. However, this behavior can also complicate planning efforts. As a result, 31% of utility leaders classified customers as a mixed benefit and 22% described them as primarily adding complexity to transition efforts. Nine out of 10 commissioners see the potential of consumer participation, through appliance choices, demand-side management program participation and adoption of battery systems that could become an important grid resource.

As plans take shape, utility executives’ list of priorities is topped by reliability, safety and sustainability, all scoring 70% or above, followed by clean/renewable energy, affordability and energy independence, which all ranked over 60%. Technology targets seen as necessary to support these priorities aren’t surprising, with infrastructure upgrades, grid modernization and developing renewable energy sources considered most important, followed by energy storage, upgrading transmission networks and integrating DER-generated energy. A growing number of utilities have begun deploying equipment such as grid-based battery storage (37%), advanced metering infrastructure (37%) and residential EV charging infrastructure (36%).

Future-facing

Taking a five-year view on what future investments should focus on, load monitoring and voltage management, adding more solar capacity and developing consumer pricing and incentive programs were of most interest, though none scored higher than 22%. This could be because utility needs vary widely by region. For example, grid/battery storage ranked first among Northeast utilities, while solar/PV arrays took the top spot in the much sunnier South and Southwest.

Marina Donovan, Itron’s vice president of global marketing, ESG and public affairs, said the overall survey results support optimism that utilities are moving forward with efforts to decarbonize their operations.

“This year’s report underscores the pivotal moment we’re at in shaping the future of the U.S. grid,” Donovan said. “By surveying commissioners and utility executives, the research offers a unique lens into the challenges and opportunities of the energy transition. What’s clear is that utilities are looking to address those challenges.”

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