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Saturday, November 26, 2022

More Than Half of U.S. and Canadian Power Sector Executives Cite Extreme Weather Resilience as Their Biggest Challenge

A survey of more than 250 executives and influencers across the U.S. and Canadian power sector reveals that the COVID-19 pandemic has created lasting changes for the utility industry as stakeholders continue to grapple with ever-evolving business models and an increasing need for improved resiliency.

Survey results from Guidehouse and Public Utilities Fortnightly’s sixth annual special report on State and Future of Power found that:

  • Nearly 60% of survey respondents feel the shift to remote work and enabling technologies for utility operations will be the most long-lasting effects of the pandemic.
  • 56% said electrification is the most promising opportunity for sustaining utility growth, while 53% said the rigidity of utility regulation, funding cycles, and rate structures are major barriers for utilities hoping to invest in new business models.
  • 54% feel that resiliency due to increasingly extreme weather events is the biggest challenge to utility operations from climate change.

The report analyzes today’s utility industry and the major changes expected in the next 10-15 years. 

“Utility executives are handling short term COVID-19-related constraints as well as addressing long term climate and resiliency risks. The complexity of a rapidly changing market landscape and the ongoing disruption are accelerating changes in how utilities operate in an evolving energy system and how they interact with their customers,” says Dan Hahn, leader of Guidehouse’s Energy Providers practice. “The transition to zero carbon assets and solutions, proactive customers with connected devices, distributed resources, and increasingly engaged stakeholders, are forcing utilities to reevaluate their strategic priorities. However, last year is proof that utilities can react to disruption and continue to move toward the utility of the future.”

Once considered unachievable in many parts of the utility business, remote work quickly became a reality in 2020 as utilities developed innovative processes and mechanisms to engage and support their customers while maintaining reliable service. According to this year’s report, investment in operational flexibility and digital solutions to protect workers’ health and safety were major priorities, alongside the development of virtual customer engagement strategies. Survey responses indicate that this new way of working is expected to continue over the long term.

Utilities are already actively deploying new business models such as energy as a service, subscription-based retail solutions, various models for distributed resources, and electrification. Through utility partnerships, buildings and transportation electrification can help reverse declining load while also offering a suite of new products and services for customers, according to the report. However, even as utilities quickly upended traditional processes in response to the pandemic, many survey respondents indicated that regulatory barriers and a historically risk-averse culture are inhibitors to business model innovation.

In addition to the pandemic, utilities are also grappling with more frequent extreme weather events and growing cyber threats, both of which can have catastrophic consequences. The report shows that over the last two years, resiliency planning has accelerated across the power industry, and that mitigation efforts, along with investment in resilient infrastructure, were highly ranked by respondents, underscoring the urgency with which utilities need to act. Securing the electric grid from physical attacks and cyberattacks is also a high priority for the power industry, with 86% of respondents indicating that between cyber and physical security, cybersecurity is the bigger risk to utilities.

“While utilities faced countless challenges in the past year, this year’s State and Future of Power survey demonstrates that the industry continues to embrace change while evolving to meet new challenges head-on,” says Mackinnon Lawrence, global lead for Guidehouse Insights. “Given the complexity of disruption across the industry, utility executives will need to remain flexible and vigilant as they navigate an increasingly clean, distributed, mobile, and digitized future.”

Download the report at Guidehouse

Homeland Security Todayhttp://www.hstoday.us
The Government Technology & Services Coalition's Homeland Security Today (HSToday) is the premier news and information resource for the homeland security community, dedicated to elevating the discussions and insights that can support a safe and secure nation. A non-profit magazine and media platform, HSToday provides readers with the whole story, placing facts and comments in context to inform debate and drive realistic solutions to some of the nation’s most vexing security challenges.

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