As the climate crisis has brought more global conversations around sustainable energy infrastructure to the forefront, there is increased pressure for U.S. power conglomerates to redefine how they operate. According to EY, the year ahead will bring an “energy trilemma” consisting of increased pressure around “decarbonization and the adoption of cleaner energy sources, electrification and related infrastructure needs, and customer-driven disruption.” Not to mention other concerns like ongoing inflation, supply chain snarls, and cybersecurity threats. While the cost of reimagining day-to-day operations is daunting, new technology is helping lower costs.
Given these challenges, it’d be natural to think that utilities were facing their “darkest hour” – but in a weird way, the path of progress has never been brighter. As Fidelity pointed out, “The U.S. (and the world) is gradually shifting from a petro-state to an electro-state, and utilities are poised to be primary beneficiaries of that shift.” After years of environmental activism, corporate commitments, and public education, a palpable sense of urgency has flooded the sector – aided in no small part by a $1 trillion bipartisan infrastructure bill signed in late 2021 that included $65 billion specifically earmarked for upgrading the national power infrastructure.
In 2023, technology has created an opportunity to innovate sustainably. Here are 5 ways the sector is using new tools to improve outdated methods, and how these innovations are lowering costs, improving efficiency, and sometimes even saving lives:
1. Accessing New Tools in the Tool Box
While much of the innovation conversation is dominated by artificial intelligence (AI), automation, IoT, and other flashy tech (see next section), there have been tremendous strides made in the hardware that is used to service the utilities sector. Site inspections and evaluations are critical parts of maintaining the power grid, but it’s always been dangerous work. Further, it is time consuming and much of the power infrastructure is not serviced as frequently as it should be to mitigate major risks like wildfires. Many companies have shifted to retrofitting helicopters and fixed-wing aircrafts to capture necessary data; however, the hotter trend is drones. Favored for their precision and relatively low operating costs, drones are transforming how the industry monitors power lines.
An analysis by Frost & Sullivan revealed that the market for drones in the power and utilities sector will reach $515 million by 2030. As the report stated, “…ongoing digital transformation trends across the power and utilities sector and an increase in the adoption rates of drones to ensure the security of power supply under today’s challenging conditions are expected to sustain this growth.” Often referred to as a “game-changer” for the industry, drones are also a much safer, cost-efficient way of working.
2. Using Software as the Connective Tissue
The pace of change and disruption in the utilities sector is unprecedented, and almost overnight every power company was transformed into a tech company. The Electric Power Research Institute (EPRI), has been looking into the impact of AI in utilities for some time, and in May 2021 the group brought together more than 100 organizations at an event where electric power utilities presented their biggest challenges and AI companies responded with potential solutions. Some of the innovations included:
Neural networks, with data existing in cyberspace, that enable power systems to learn and function more dynamically, offering flexibility, reliability, and resiliency.
Machine learning to facilitate models that can detect damaged transmission and distribution (T&D) assets, and assist staff in more efficiently managing the volume of images.
A physics-based machine-learning hybrid model that can identify gearbox damage in its early stages and extend its life, representing cost savings of more than 90%.
Possibly most exciting though is this marriage between two unlikely parties – utility companies and Silicon Valley disruptors. Ultimately, the goal will be to rapidly introduce more AI methodologies to power and utility experts who will use them to design the grid of the future.
3. Unifying Field Service Technicians
Field service is the workhorse of the industry, and accurately sending personnel to service customers or address failing equipment is a complicated operation. Miles of lines to inspect with varied threats to their function—from heat in the Southwest to cold in the Northeast and wind in the midwest—make uniform maintenance a challenge. Now, thanks to advances in intelligent dispatching and coordination, service problems can be handled promptly and efficiently. Artificial intelligence can also forecast when breakdowns are likely to occur, resulting in predictive maintenance that saves time and money.
Other aspects of field service involve monitoring usage and preventing equipment tampering. Recent substation attacks have left thousands without power, and industry experts also estimate that $6 billion of electricity is stolen in the U.S. each year. Technology that makes it easier for utilities to track usage, spot theft, or monitor spikes is no longer a nice to have but essential.
4. Integrating Tech to Bring it All Together
A major challenge facing the industry is not just finding one-off solutions, but also finding ways for those solutions to work together. That can be difficult with nascent technology, and it’s still very much the Wild West in places that are figuring out how systems talk to each other.
This is where it’s important for utility leaders to have a holistic picture of their operation to prevent silos. For that to happen, department heads from all areas of the business must be brought into the innovation discussions from the beginning, engage in candid discussions about efficiency gaps, set benchmarks, and ensure any improvements are rolled out strategically over time. A system that communicates effectively across departments drastically improves efficiency, enabling innovation in other areas—like reaching ESG goals. From there, it’s all about monitoring and tweaking for the best results.
5. Empowering the Next Generation
Several human resource challenges plague the energy and utilities industry. In a field that is slow to adapt, some CEOs fear that they may not have adequate upskilling and reskilling resources to keep up with the pace of digital change—spurring a search for new talent. In contrast, 14% of millennials told PwC that they do not want to work in the energy sector simply due to its bad public image. This is a big disconnect and a threat to progress.
With much of the energy sector’s customer service and power distributor roles likely to be automated in the near future and 50% of the overall utility’s workforce set to retire over the next decade, upskilling has become a huge priority. As these employees retire, companies risk losing institutional knowledge that can only be gained through on-the-job experience. While there are positive signs of progress everywhere, it’s an ironic truth that the industry will need to hire more humans to support the machines.
Technology itself is not a silver bullet, and it will take time to revolutionize an industry as complex and entrenched as power and utilities. To move forward successfully, utilities must do a few things: (1) engage their customers to understand their most pressing concerns; (2) build a digitization strategy BEFORE incorporating the tech; (3) create short and long-term achievable goals rooted in business objectives; and (4) act responsibly – for the future of the sector, and the planet.
Kaitlyn Albertoli is CEO and Co-Founder of Buzz Solutions.