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My Top Three Predictions for 2024 Trends

Dec. 18, 2023
VP of Content Teresa Hansen reveals her top predictions for the utility industry's trending topics for next year.

It's become customary for me to share my predictions about trending topics for the upcoming year each January. In 2023, my predictions included: the continuation of extreme heat and wildfires, the focus on the Texas grid, the persistence of natural gas generation, emphasis on physical security, and increased attention toward fusion energy. While the first four topics are still trending, I’ve seen little news about fusion energy since the initial announcements. For 2024, I'm presenting three predictions.

1. Electric Utilities Artificial Intelligence (AI) Adoption Grows

My recent column highlighted the potential and adoption of AI by electric utilities. I firmly believe that AI adoption within utilities will increase in 2024. If your company hasn't initiated plans for AI integration, it's already lagging. The Boston Consulting Group's report, titled "How AI Can Speed Climate Action," released in November 2023, predicts that through scaling proven applications and technology, AI could potentially mitigate 5% to 10% of greenhouse gas emissions (GHG) by 2030. Additionally, AI can aid in enhancing resilience against black-sky hazards by enabling better data sharing and analytics. Moreover, it can facilitate the integration of intermittent renewable energy, optimize grid balancing, and enhance the efficiency of existing fossil-fueled plants, leading to increased capacity without increasing emissions. The impact of AI on the electric utility industry is hard to comprehend, but AI will undoubtedly increase with time. However, AI adoption poses challenges and concerns, particularly regarding oversight and cybersecurity. Furthermore, the technology will require additional and larger data centers, prompting utilities to invest more in new generating capacity and transmission & distribution (T&D) infrastructure. These data centers might contribute to climate change by escalating GHG emissions, water usage, environmental warming, and electronic waste. The road ahead with AI is filled with challenges and uncertainties, yet its rapid growth seems inevitable.

2. Electric Vehicle (EV) Growth Continues, but Growth Rate Slows

Grid owners/operators are affected not only by EV adoption rates but also by the pace at which EVs are accepted. While final EV sales figures for 2023 are unavailable at the time of this writing, they're expected to reach record highs. However, I anticipate that the adoption rate will decrease in 2024. Despite the steady climb in EV sales, statistics reveal that electric vehicles are spending more time on dealers' lots compared to earlier in the year. An article by Cox Automotive highlighted that it took almost twice as long to sell an EV in the U.S. in August 2023 compared to January 2023, whereas gas-burning vehicle sales remained brisk in August. Some EV manufacturers, like Tesla, have reduced prices and introduced additional incentives to boost sales. Ford, known for offering the popular F-150 Lightning pickup along with a few other all-electric and hybrid vehicles, reported a 43% increase in its November 2023 EV sales compared to November 2022. However, Ford announced a plan to halve its 2024 production of the F-150 Lightning last month. Many experts attribute concerns about inadequate charging infrastructure as a hindrance to EV adoption. In addition, with crude oil prices dipping below $70 a barrel recently, resulting in lower gas prices, it's likely to impact EV sales. While environmental concerns are important to many, economic considerations often outweigh them, leading to potential delays in EV purchases. I'm not predicting a loss for EVs in the long run, but for the coming years, gas-fired vehicles will continue to dominate new car sales.

3. Education for and Collaboration with Customers is Crucial

This year, numerous experts have stressed that utilities must engage their customers to achieve their decarbonization goals. Initially, progress toward net-zero carbon largely stemmed from replacing older, inefficient coal-fired power plants with cleaner and more efficient gas-fired combined cycle plants — a phase often referred to as low-hanging fruit. However, this straightforward phase is over. Moving forward, costs will pose a significant hurdle. Many regions in the U.S. and globally urgently need new infrastructure to replace aging, or new lines to deliver added clean, renewable power necessary for decarbonization and electrification. This endeavor will be incredibly expensive. BloombergNEF's 2020 study estimated the grid overhaul cost from 2020 to 2050 at $14 trillion. Due to inflation, labor shortages, and supply chain issues, Bloomberg revised this figure to a staggering $21 trillion in mid-2023. Historically, utilities have recuperated such costs from their customers. However, gaining agreement from customers, consumer groups, politicians, and regulators for the same repayment structure seems unlikely. Years ago, the term 'negawatt' was commonplace, and I believe it should be revived. The most cost-effective strategy for both utilities and their customers is to minimize electricity usage whenever possible. This approach saves money and adds no GHG emissions. While this strategy seems obvious for the future, it requires departure from the century-old utility business model. More crucially, it requires utilities to educate customers, earn their trust, and provide financial incentives for reducing electricity consumption during critical periods. Despite years of discussion within the industry, few electricity consumers, especially residential ones, have been offered such programs. Integrating customers into long-term planning has been overlooked for far too long. I expect that in 2024 and beyond, more utilities will involve customers in their decarbonization plans. Although this strategy won't eliminate the necessity for a grid overhaul, it can alleviate some of the demands.

About the Author

Teresa Hansen

Teresa Hansen is Endeavor Business Media’s Vice President of Content – Energy, where she is be responsible for content published in T&D World, Utility Products, and Energy Tech, Endeavor’s newest media brand in the energy franchise. In this role, Teresa is responsible for Utility Analytics, which includes two face-to-face events, Utility Analytics Week and Utility Analytics Summit.

Teresa has spent her entire career in the electricity industry. Prior to joining Endeavor, she was Vice President of Global Content at Clarion Energy. In this role she was responsible for all content presented at POWERGEN International, DISTRIBUTECH International and HYDROVISION International, as well as the content published on Clarion Energy’s North American media brands—POWERGRID International, Power Engineering, Renewable Energy World and Hydro Review. Teresa has 25 years’ experience as a technical writer and conference content creator, with 20 years at Clarion Energy (formerly PennWell). Her previous energy-related experience includes 13 years of service at a nuclear power plant and a brief stint as a senior research analyst for an energy marketing and trading company.

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