Electricity’s New Mission: Addressing Resource Adequacy, Resiliency and Security as Demand Gets Set to Soar | Black & Veatch
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Electricity’s New Mission

Addressing Resource Adequacy, Resiliency and Security as Demand Gets Set to Soar

Electricity’s New Mission: Addressing Resource Adequacy, Resiliency and Security as Demand Gets Set to Soar

After decades of flat load growth, the demand for electricity is poised to increase rapidly. How the industry responds and works together to build the grid of the future could help mitigate risk and speed to deployment of a more resilient, reliable and secure energy network.

Megatrends are reshaping infrastructure systems from power and water to communications, transportation and more. As sustainability commitments grow as a defining market force, the electric utility market outlook is the strongest it has been in years. Black & Veatch forecasts significant electricity demand growth will be driven by:

  • decarbonization goals
  • continued expansion of renewable energy
  • passenger and fleet electrification programs
  • asset hardening programs

Investment in generation diversification, grid modernization programs, infrastructure expansion and system digitalization will help us move towards a more decentralized and distributed grid so that we may better meet the coming boom in demand growth, while reducing carbon emissions. The development of the low carbon grid of the future will take time and must overcome hurdles including supply chain disruption, geopolitical uncertainty, rising inflation costs and trillions of dollars of existing network assets that must be modernized.

Adjusting for Supply Chain Disruption

Supply chain concerns are increasing stress on energy investment programs across the country, with key disruptions coming from the loss of Russian and Ukrainian energy sources, ongoing COVID-19 related lockdowns in mainland China, international carbon reduction policies and persistent inflation. As such, neither global supply chain prices nor procurement lead times are expected to trend downwards at least through 2023, according to IHS Markit forecasts.

Simply put, goods that used to have clear delivery timelines will be impacted by volatility, delays and disruptions at various points of the value chain for an extended period of time.

These conditions require leaders to be more vigilant in navigating their business. We are all experiencing increased costs, lead times and risk; and while this is challenging, it also brings opportunity for a collective shift in how our industry operates. Stakeholders across the supply chain will need to work together to mitigate volatility and find creative solutions to move projects forward. Delivery models must reflect a shared risk model and stakeholders across the industry will have to be flexible and work together in good faith as widespread capital programs are required to meet our increasing demand.

Driven by Decarbonization

Earlier this year, Black & Veatch partnered with Clarion Energy to release the 2022 Megatrends in Power report in order to provide a window into how our industry is responding to major market altering trends. The report identified and examined four megatrends that set the stage of our rapidly evolving energy ecosystem:

  • Decarbonization
  • Electrification
  • Climate Adaptation
  • Energy Transformation

From the report we see stakeholders are quickly adapting their business models to align with decarbonization goals and we see this movement resulting in robust investments in power diversification and new technologies around renewables integration, battery energy storage and energy resource management. When it comes to decarbonization, the report shows that funding and access to new technology are the top two industry challenges in progressing towards a net-zero carbon goal by 2050.

With this in mind, large scale electrification of critical infrastructure systems is going to take a multi-pronged approach that includes more utility-scale renewable electricity generation; distributed energy resources & localized renewable generation; a modernized grid that can accommodate and integrate these resources; and as the low-hanging opportunities are implemented, more focus on emerging technologies such as advanced nuclear reactors, carbon capture and clean hydrogen.

Ensuring Resiliency

Lets face it. Today’s grid is a remarkably complex and reliable machine. So, managing supply and demand within a green energy economy will require generation diversification and the utilization of new technologies, including critical technologies still in development, to ensure we can provide the always on power that homeowners and businesses rely on. To get there, Black and Veatch is helping our clients address renewable intermittency and integration challenges, which are significant concerns for utilities and reasons for continued investment in low-carbon conventional power generation.

Energy storage will be a key component in accelerating the energy transition by helping to stabilize the grid and balance out intermittency issues from renewables. Traditional battery storage utilizing lithium ion and other emerging chemistries, as well as longer duration storage utilizing hydrogen, will be essential elements of the decarbonized grid. Seasonal shifting, in which energy produced during periods of peak production and utilized at a later date is a significant opportunity for long duration technologies. Highlighting the importance of long term energy storage, Black & Veatch has partnered with Mitsubishi Power Americas and Magnum Development in the development of what will be the world’s largest industrial green hydrogen production and storage facility in Delta, Utah. This facility will initially be designed to convert 220MW+ of renewable energy daily into 100 metric tons of green hydrogen.

While diversification of the generation portfolio happens across the country, many utilities are not yet in the deployment or implementation stage of resilience programs to help mitigate the effects of climate change. In fact, during the past year, our Megatrends report found that most of our respondents neither deployed nor piloted projects to help their utilities respond faster to storms or environmental events. In addition, the report found nearly 30% are not using any type of risk analysis or modelling to prioritize resilience projects. For utilities with deployed or piloted projects to drive faster response to environmental events, there is a balance of process and asset-based initiatives. The former included weather data to pre-stage contract crews; among the latter are installation of BESS and pre-event power reductions.

The Grid Of The Future Takes Shape

Ultimately, meeting all of the challenges needed to help repower the power industry isn’t a “one-size fits all” situation. Significant investment in transmission and distribution resources are needed to ensure the integration of low-carbon baseload generation and renewable generation assets will advance at the pace necessary to achieve decarbonization targets. Technology, in generation and grid management, will be the key facilitator in achieving a successful energy transformation. As we look to the future, we see a grid that harnesses the power of AI and machine learning to rapidly adjust generation and storage assets to changing weather conditions and demand loads to ensure a seamless experience for consumers, day or night.

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