5 Megatrends Powering the Shift in Today’s Utility Landscape

The power industry is in the midst of a significant transformation driven by technological advancements, environmental concerns, evolving market dynamics and unprecedented demand for new energy. As the sector undergoes a fundamental shift in how energy is produced, consumed and managed, utilities must adapt to multifaceted challenges and forge new pathways for growth – not only for their own operations but for the customers and communities they serve. Understanding the key megatrends shaping the power landscape today can help utilities thrive during these times of transition and flux.

1. Integrated Electrification

Driven by clean energy mandates, new funding opportunities, innovative partnerships, and ambitious sustainability goals, many sectors of the economy are transitioning from fossil fuels to embrace widespread electrification. From clean transportation initiatives and the increasing adoption of electric vehicles (EVs) to building electrification for heating and cooling, along with rapidly growing demand for new power sources driven by AI and data centers, this trend brings both challenges and opportunities. As more sectors transition to electric solutions, overall demand for electricity is rising significantly, with projections indicating a tripling of demand by 2050.

To meet these energy mandates and rising demand, the utility industry has seen a significant increase in renewable energy integration onto the grid. This influx of renewable energy, especially solar and wind, has led to notable changes in peak demand patterns, including shifts in the “duck curve.” The “duck curve” illustrates the mismatch between midday solar generation and evening peak demand, creating challenges for grid stability. In regions rich in solar resources, there is a growing effort to encourage EV charging during the day, when solar generation is at its peak, instead of at night, in order to better balance supply and demand. These shifts necessitate new approaches to load management as utilities work to accommodate the intermittent nature of renewable energy sources.

To effectively address the rising demand and integration of renewables, the industry must enhance infrastructure, including expanding generation capacity, modernizing transmission and distribution systems, and increasing EV charging networks. Achieving this requires collaboration between utilities and their customers, aligning on projected growth, geographic distribution of electrification, and associated costs. By conducting joint studies and developing strategic plans, stakeholders can assess power requirements and load patterns, enabling utilities to proactively address demand. This collaborative approach will pave the way for a seamless electrification journey, ensuring that infrastructure development aligns with the pace of electrification and renewable integration.

2. Transmission Infrastructure

The average age of the grid infrastructure in the U.S. today has outlived its intended design. This is particularly concerning because many transmission lines and transformers were designed with a lifespan of about 50 years, meaning much of the grid is nearing or exceeding its intended operational life and many lines are at or near their capacity, especially during peak demand periods. While improvements are underway across some utility systems, a significant portion of the network still needs to be upgraded, with costs estimated in the trillions. Widespread modernization efforts and new investments are needed to enhance resiliency and reliability, accommodate new energy sources and handle the demand for electrification. Confronting transmission challenges related to capacity constraints from data centers, offshore wind and other complex projects and processes opens opportunities for utilities to strengthen operations, improve reliability and build resilience.

The rise in digital data storage and processing, such as artificial intelligence and machine learning, has significantly increased electricity demand. Data centers are major consumers of energy and often require substantial amounts of power for cooling and operations. Increased investment in data centers and industrial/manufacturing sectors has driven load demand forecasts up, necessitating further upgrades and expansions in transmission infrastructure. In response to these rising energy demands, some electric utilities are reconsidering decisions to decommission fossil fuel power plants and even exploring the re-commissioning of nuclear reactors to support their data center loads.

Likewise, a significant transmission build out is needed to integrate increasing offshore wind construction. New transmission lines, along with reconductoring existing lines to boost capacity, are essential to handle the high-capacity outputs from wind farms located far offshore is costly and complex, requiring both the offshore infrastructure (underwater cables) and onshore connection points. Integrating offshore wind into the existing power grid poses significant challenges. The current infrastructure is not designed to handle the scale and location of offshore wind farms. Upgrading transmission systems, establishing reliable points of interconnection and building new transmission infrastructure are essential and require planning, collaboration with stakeholders, regulatory support and investments.

Building, expanding and modernizing transmission infrastructure often means years of complex permitting, siting and other regulatory processes. To streamline the process and prioritize upgrades in areas most impacted by high prices and long recovery times from outages, the Department of Energy has been authorized to designate National Interest Electric Transmission Corridors (NIETC). These corridors are critical for addressing congestion and enabling the integration of renewable energy sources, including offshore wind. By easing permitting processes and encouraging investment in key areas, NIETCs are a big opportunity for utilities to adapt to the changing energy landscape.

3. Resiliency and Security

Now more than ever, today’s power grid is vulnerable to disruption. From the impacts of severe weather to man-made threats and attacks, ensuring the security and reliability of utility assets, data and systems is critical to maintaining safe, continuous power and operations for customers and communities. Rapid technological changes, evolving risks and shifting regulatory obligations require utilities to implement robust physical and cyber security programs that safeguard operations, achieve compliance and build resiliency. Providing comprehensive training for all employees is also essential to reduce human error and encourage open communications if a potential threat is uncovered.
In addition to the toll of increasingly frequent extreme weather impacts, physical and cyber threats are a growing challenge to grid resiliency. For example, physical attacks on the power grid rose 77% in 2022 alone, and cyber-attacks have succeeded in causing temporary blackouts. Grid operators need advisory support and partnerships to identify potential vulnerabilities and address them proactively, mitigating threats before any damage occurs either physically or through malicious software, ransomware and dangerous digital traffic.

Various mechanisms exist to evaluate and prioritize security investments for resiliency. A robust NERC regulatory framework across a range of utility functions including Protection and Control (PRC), Critical Infrastructure Protection (CIP), Transmission Planning (TPL), Modeling, Data and Analysis (MOD), and Facilities Design, Connection and Maintenance (FAC). Compliance with NERC’s CIP-014 standards, for example, requires electric utilities that own and operate transmission facilities rated over 200 kV to focus on the physical protection of critical assets, to identify and mitigate newly emerging threats, to stay abreast of advancing technologies and to maintain strict adherence to the procedures and documentation that demonstrate their organization’s physical security awareness. These mandatory reliability and security standards most recently protected the grid from one of the largest geomagnetic disturbances to take place in the last 20 years. Existing NERC protocols including EOP-010-1 and TPL-007-4 helped the industry deal with the event without major disruption. However, it is important to note that NERC regulations can change rapidly and require careful monitoring to effectively manage compliance risk. To follow these updates, you can subscribe to our monthly NERC Compliance news.

Adopting IEC 61850 communication protocols has further enhanced grid resilience by streamlining protection, automation and control functions, allowing for greater interoperability and faster response times during critical events. Additional regulatory standards such as FERC Orders 2222, 2223 and 1000 also play a critical role in promoting grid modernization by facilitating the integration of distributed energy resources (DERs), promoting greater transmission planning efficiency and ensuring competitive market participation.

4. Disaster Response and Reliability

Significant outages, interruptions or asset damage are growing more common as systems and assets age, and as we experience more and more damaging threats. During unplanned events, such as natural disasters, capable and efficient response is essential to restore service and trust to customers and regulators as quickly and effectively as possible. Even the most skilled operators may face events that stretch their resources, but it is critical to be prepared. Disaster response planning and strategic undergrounding are key to adapting successfully to this megatrend.

Strategically undergrounding distribution systems can be a practical and cost-effective solution to prevent outages from extreme weather and other disasters. Determining if this is right for your utility requires careful consideration of the pros and cons for your system and an evaluation of all the alternative paths to asset hardening for reliability. Likewise, restoring power faster and limiting future impacts is essential when it comes to disaster and storm response planning. Event analysis, inspection, resource coordination, field patrol and construction coordination all must be part of pre and post event response. Short- and long-term corrective actions that improve reliability must be accounted for.

5. Customer Affordability

Utilities today face many challenges when it comes to balancing record high investment needs for grid modernization and clean energy with protecting customer affordability, particularly for low-income households and rural or disadvantaged communities who often face higher energy burdens. As electricity costs and rates trend upward, utilities and regulators must consider new pathways to not only save customers money but bolster reliability while doing so.

For example, a strategic approach to grid modernization initiatives can help manage costs by determining financial impacts and prioritizing investments with clear customer benefits and maximum cost-effectiveness. With activities such as strategic undergrounding, consider targeted implementation of projects in high-risk areas can maximize the reliability improvements while minimizing the overall cost, and taking a phased or incremental approach to manage costs more effectively can reduce the financial burden on customers in the short term. Uncovering funding mechanisms and cost recovery through state and federal sources is also helpful. Pursuing public-private partnerships, grant opportunities and other funding mechanisms or cost recovery options can spread out investment risks and reduce costs for both utilities and customers.

Technology is also an important part of reducing financial burdens for customers. Advanced analytics and artificial intelligence can not only more accurately help identify customers who may be struggling with affordability but can also deliver personalized insights and recommendations to help customers manage their energy use and costs and provide tailored information about assistance programs and energy-saving opportunities. Intelligent grid technologies can, among other things, support predictive maintenance efforts to reduce outages and improve reliability, lower repair costs that get passed on to customers and extend the life of existing infrastructure to save on upgrades or new builds.

But it is energy efficiency that perhaps has the most significant positive impact on customer affordability, and it is becoming a critical part of a utility’s operation for many reasons, including its impact on lowering demand and decreasing the need for costly new generation and transmission infrastructure. And although advancements continue to be made, there is more work to be done to achieve the maximum benefits of energy efficiency. We need more investments and partnerships to make efficiency programming and incentives available to all customers. This requires comprehensive research and planning, and tested, proven but cutting-edge approaches to program design, implementation, customer engagement, contractor training, engineering support, evaluation and continuous improvement.

Next Steps: TRC Can Help

These power sector megatrends will have significant, long-lasting and wide-spread impact across society, but there is no doubt that each is driving tremendous growth opportunity for utilities. However, despite an increased need to strategically manage growing capital investments and rising power demands, short-term market challenges and financial pressures may impact immediate strategic decisions. As a result, successfully adapting to these complex megatrends requires unique resolutions to the many intricate and interrelated challenges.

TRC is powering the shift currently underway across the power industry with unique advisory, consulting, planning, engineering, construction management and field solutions that manage risk and ensure the continued delivery of safe, reliable and affordable service to your customers. As a trusted partner to the nation’s major energy companies, we deliver agility, fortitude and peace of mind with integrated power delivery engineering and digital grid solutions that help bridge the gap from current capabilities to future goals.
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