August 20, 2019

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Black & Veatch: Electric Industry Must Adapt, Embrace the Concept of ‘New Energy’

Strategic Directions Report reinforces the need for the industry to evolve

Submitted by: Black & Veatch

Categories: Renewable & Alternative Energy, Technology

Posted: Aug 13, 2019 – 10:35 AM EST

 

OVERLAND PARK, Kan., Aug. 13 /CSRwire/ - Electric utilities are navigating one of the industry’s most dynamic times across diverse geographies and stakeholders, presented with a mix of opportunities as they work to meet changing customer demands along with the need to deliver reliable, resilient power, Black & Veatch’s new 2019 Strategic Directions: Electric Report finds.

The global engineering, procurement and construction leader’s survey of nearly 900 North American leaders in the industry – the most comprehensive sampling by Black & Veatch for its more than decade-long electric report – offers deep perspective about a power sector in need of repowering itself in an increasingly complex, multifaceted and evolving energy ecosystem.

The surge of renewable energy from solar, wind and battery storage – and growing penetration of microgrids and other distributed energy resources (DERs) – has empowered consumers, testing utilities’ business models. “New energy” is driving a global movement dedicated to clean energy technology and innovation. In many cases pushed by decarbonization goals, electric vehicles and electrified fleets continue to proliferate, pressuring power providers globally to accommodate charging demand. Swirling above it all are persistent regulatory questions and decades-old concerns about reliability, aging infrastructure, and long-term investment.

“In these evolving times of the electric industry, there’s no one-size-fits-all dynamic,” said Mario Azar, president of Black &Veatch’s power business. “What’s going to be crucial is for power providers to not only have a balanced generation mix with diverse fuel sources, but to invest in distributed generation, transmission and distribution as these systems no longer operate in isolation in the world’s shifting power market.”

In the report, which Azar writes “captures the diverse challenges facing organization leaders and the solutions they're finding,” nearly half of the respondents – 46 percent – said alternative "behind-the-meter" energy supply options by customers or third parties threaten their utility business model if regulators preclude market flexibility. Forty-three percent say the threat could come from a utility's failure to deploy its own alternative energy solutions.

Other key insights in the report include:

  • Despite the rise of renewables, natural gas will remain a formidable player in the global energy mix for some time. In China, for instance, where air quality concerns are driving power generation away from fossil fuel sources, the government is pursuing wider use of renewables, although its near-term road map relies significantly on liquefied natural gas (LNG) imports.
  • Nearly 45 percent of our survey’s respondents indicated that renewables and distributed generation are motivating utilities to retire central generation sites, with another 31 percent saying they expect that to happen in the near term.
  • When asked what tools or resources are most essential for the planning, engineering, construction, operation and maintenance of a more complex grid, 55 percent of respondents cited innovative system designs that allow for more system flexibility. More than half — 53 percent — cited better modeling and forecasting data and programs.
  • As the electrification of fleets gains momentum, it can take years to plan for and deliver the power needed to keep the fleets’ wheels rolling and move the commercial EV market to mainstream. More than half of the survey’s respondents already are very engaged with their local transit agencies about electrification. Nearly one-quarter said they’re just starting to have such talks.
  • Some 40 percent of respondents said the primary driver for distribution markets was that they’d serve as a “strategy for accelerating the transition to a more distributed grid model.” More than half — 55 percent —believed that DERs dominate utility service offerings in the next 15 years.
  • Respondents identified security education and training as the top need when it comes to managing organizational cybersecurity and physical security, followed closely by managing and optimizing security products and platforms.

“New energy continues to disrupt the electric industry as consumers, in the pursuit of energy independence, increasingly migrate toward a cleaner, greener forms of power,” said John Chevrette, president of Black & Veatch’s management consulting business. “Now more than ever, utilities must recognize and embrace these challenges, rethink their business models and start planning for necessary upgrades.”

Editor’s Notes:

  • Black & Veatch’s report is based on a survey of 892 participants across the utility, municipal, commercial and community sectors.

  • The full Black & Veatch report is available for free download at https://www.bv.com/reports.

  • Reflecting the nimbleness that electricity providers must possess in the rapidly changing energy ecosystem, Black & Veatch recently reorganized its global power business in response to growing client demand for tailored solutions that balance conventional and renewable generation sources in critical, diverse global geographies, as well as more distributed, resilient power sources and grid infrastructure.

About Black & Veatch
Black & Veatch is an employee-owned, global leader in building critical human infrastructure in Energy, Water, Telecommunications and Government Services. Since 1915, we have helped our clients improve the lives of people in over 100 countries through management consulting, engineering, construction, operations, and program management. Our revenues in 2018 were US$3.5 billion. Follow us on www.bv.com and in social media.

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