March 7, 2024

Updating Our Electric Infrastructure—Challenges and Opportunities for Utilities in 2024

9 Min. Read

Concerns about the reliability of an aging grid are a key concern for many—especially given the growing demand for electric vehicles, an electrified world, and the energy needs of a growing population.

Utilities play a pivotal role in preparing the United States’ infrastructure for the renewable energy revolution and ensuring the electric grid is able to meet the energy needs of an electrified future.

Electrification is raising awareness of the challenges to utilities from these growing populations, an aging infrastructure, increased energy demand, severe weather patterns, and the energy needs created by climate change. Those challenges also present energy companies with an opportunity to help reshape the fuel of the future and add greater energy resilience to their communities.

This article examines critical questions and concerns to help guide utilities in the creation of a modernized electric infrastructure landscape capable of meeting our current and future energy needs.

Grid Modernization: Adapting to the Digital Era

The traditional grid design, with its centralized generation and distribution, no longer meets modern energy needs as it once did. Renewable energy sources, smart-grid technologies, commercial and residential microgrids, and battery farms are reshaping the flow of power.

Upgrades are critically needed to renew the aging U.S. grid structure, even without the changes inherent in distributed generation, battery storage, increased reliance on renewable energy sources, and other market disruptors. Hardware upgrades, such as replacing existing transmission and distribution wires and transformer stations, are important. Adding new power and storage sources will also mean adding additional transmission and distribution wires.

Of course, modernizing the grid involves upgrading more than the hardware. The software used to monitor, direct, and reroute power throughout a region also needs upgrades and innovation. The electrical grid of tomorrow requires complex, interoperable software to support grid orchestration and improve asset management. The flexibility this brings is particularly important when dealing with the intermittent nature of renewable power generation.

There is a need to adapt the grid to handle fluctuations in generation that don’t occur with traditional power plants. Grid operators used to have little access to real-time, localized data on the distribution grid. Now, using smart grid software to gather and act on usage info from smart meters could enable utilities to apply data-driven algorithms for many grid operations and planning efforts, including infrastructure sizing and production forecasting. This would allow utilities to improve operations and foster smoother, more efficient grid functionality.

Advanced wireless technology used in meters can also be used in enterprise-level efforts to monitor the grid and detect current and future trouble spots. The digital upgrades could enhance outage response. This would improve system reactivity, timely use of switching equipment, and ways to avoid power disruptions.

Renewable Energy Integration: Embracing Sustainable Solutions

Boosting the production of sustainable, renewable energy is one key element in efforts to reduce carbon emissions worldwide. In the past, utilities depended on less efficient power plants, and renewable energy was more expensive to produce. Now, costs for solar, wind, and alternative power have dropped. Home and property owners are selling the solar power they generate back to the grid, helping support the utility by providing excess energy to the community when demand is high.

By many estimates, renewable energy will make up 45% to 50% of the power supply around the world by 2030 and up to 70% by 2040. Working those distributed, irregular power sources into the grid mix is more complicated than incorporating continuing output from large sources.

Today’s grids were not designed for a fast-paced, multi-directional world. Utilities need coordinated solutions and revamped processes to accommodate and store power from renewable sources. Grid operators must adapt grid capacity, connectivity, and planning to effectively manage the future power supply and demand. This requires tools to model and address weather, demand, and supply forecasts with realistic plans for asset failure. Modeling and improved operations are also needed for faster, leaner power coordination. Lastly, part of the strategy for embracing renewable energy should be to work closely with renewable power developers. Incentivizing industrial and residential customers to employ renewable energy and reactive power for smoother operations will be essential.

Electrification of Buildings and Transportation: Managing Increased Demand

EVs are expected to comprise half of all new cars in the U.S. by 2030; some markets are projected to reach that threshold (particularly California) before then. In anticipation, more commercial buildings, apartment complexes, shopping centers, and companies are adding onsite EV charging stations for customers, tenants, employees, and fleets.

In addition to EVs, people are replacing gas-powered water heaters, stoves, and other appliances with electric ones. Electrification in homes, such as purchasing an EV or EV charger installation, is currently incentivized by the federal government, utilities, and other localized tax credits and rebates.

While EVs, water heaters, and other energy transition technologies are part of the eco-centric shift from older appliances that rely on fossil fuels, they will have a significant impact on the electric grid. The result is expected to boost electricity demand by 18% by 2030 and 38% by 2035. This increased load could further strain the grid, so utilities need to be prepared.

While many of these technologies will require energy, they will also be more energy efficient than appliances of the past. As technology advances, appliances such as refrigerators, washers, and even lighting, are refined and improved to offer greater efficiency at a lower energy demand. Some electrification technologies, such as electric vehicles, solar panels, and battery storage, will also help homes, businesses, and the grid to further offset energy demands. Through bidirectional EV charging, idling vehicles can be utilized as a secondary form of battery storage to power homes or support grid resilience.

Beyond charging energy demands, buildings may need to be designed or retrofitted to accommodate EV charging stations as well. Dedicated parking spaces for EVs and electrical equipment in garages or parking areas will become increasingly common. Older homes will undoubtedly require electrical upgrades. Buildings that install EV charging infrastructure may reduce their costs by using renewable energy generation to charge EVs rather than relying on the grid.

Utilities need to proactively manage and accommodate the surge in demand. PG&E in California had around 470,000 EVs in its service territory in July 2023 and anticipates 3 million by 2030. Its 4-year rate forecast didn’t predict the demand growth occurring now.

If the electric infrastructure isn’t adequately updated, there could be difficulties in meeting charging needs, resulting in limited charging times, long lines, and potential blackouts when demand is exceedingly high. The state anticipates spending $50 billion to fund distribution grid upgrades by 2035, but that could be inadequate. Utilities must ensure their rate cases address costs to accommodate the increased capacity needs.

Grid Resilience and Reliability: Ensuring Continuous Power

Besides preparing for an increased energy load, utilities must also assess and enhance grid reliability and resilience. Lengthy power disruptions due to weather have affected parts of California, Texas, Louisiana, and Oregon in recent years, but this is a global phenomenon. Extreme cold and hot spells often affect reliability, and with more extreme weather patterns emerging, this is something utilities should likely expect to continue into the future.

Boosting capabilities to shift power and the decentralization of energy generation provided by renewable energy could help prevent outages. Power flowing to and from homes, battery farms, and other renewable sources will make the grid more complex; it will also be far less reliant on one large generating source than in the past, ensuring that any single source outages will not result in massive grid outages across the region. Bidirectional power flow can reduce strain on the grid and allow for more efficient utilization of energy sources.

Demand response programs and the increased number of microgrids can also enhance reliability by reducing peak power usage. Microgrids reduce dependency on single sources of power by decentralizing power generation. Their independent structure can add grid resilience. If there is an outage in the main grid, the microgrids can continue to provide power, minimizing disruptions. The same is true for battery farms. All these strategies can help utilities ensure continuous power supplies.

As the nation becomes more reliant on electricity, cybersecurity becomes more important than ever for grid reliability. Utilities need to continually develop better real-time threat monitoring and create aggressive restoration plans in the event of a cyberattack. The Department of Energy is developing a national grid cybersecurity strategy, but there still is a need to improve utility cybersecurity efforts. These include upgrading ever-evolving security standards, adding more threat-detection tools, and securing physical locations and digital access.

Regulatory Compliance: Navigating Evolving Policies

The regulatory landscape for utilities is continually evolving at national, state, and local levels. Navigating constant changes is critical. Strategies include implementing compliance-management systems to track changes and ensure requirements are met, using newer technologies such as artificial intelligence to support monitoring efforts, working closely with industry peers to share issues and solutions, and regularly training employees on protocols and the reasons for them.

Working with regulators and local politicians adds complexities. While everyone agrees there is a need to improve the electric infrastructure, there are countless hurdles in the way. For example, building new transmission lines can involve approval and financing across several counties, states, and utilities. Finding common ground on replacing or adding new capabilities can be daunting.

Efforts are underway to expedite the energy infrastructure buildout. Delays in permitting can hold up efforts. Impact studies and other requirements can add even more difficulty. The legal framework and permits required for building large-scale sustainable energy projects such as solar farms are complex. The projects stuck in regulatory limbo, almost all involving renewable energy, reportedly exceed the total generating capacity on the grid today.

Finding a Reliable Partner to Support Electric Infrastructure Improvements

The rise in EVs and electrification presents utilities with a golden opportunity to boost business. Conversely, the related electric infrastructure and grid challenges involve capacity concerns. The power grid of the future needs to incorporate more renewable energy generated throughout the system, offer backup power when renewable supplies wane, and be more resilient in the face of natural and man-made disasters.

Utilities could wait until increased demand forces them to act, but they will likely find themselves navigating even greater demand while facing an electrician shortage.

By proactively acting now, utilities can help lead the transition to a more sustainable and resilient energy future. In a critical role, which will require them to collaborate on renewable energy integration, share knowledge, innovate to improve stability, advance smart grid capabilities, and add energy storage solutions to back up intermittent renewable energy shortages, utilities can champion sustainability efforts in their region and emerge as a local technology leader.

As the leading provider of implementation solutions for EV charging and other energy transition technologies across North America, Qmerit can help utilities seamlessly integrate modern energy transition technologies into their community, while preparing for the upcoming electric infrastructure needs our growing world demands.

Qmerit helps utilities develop load-management strategies and partners with them to support EV charging station installations, smart electrical panel upgrades, and other electrification needs for commercial and residential customers.

With the largest network of certified electricians and electrification experts across the U.S. and Canada, Qmerit takes the stress out of updating your electric infrastructure. Contact Qmerit today to learn more!

Author: Tom Bowen Tom Bowen President, Qmerit Solutions and Commercial Electrification