5 Reasons the Utility Industry Needs Energy 4.0 Technologies

The utility industry is changing. Emerging trends are combining to put significant pressure on generation, transmission, and distribution infrastructure that was not designed or intended to meet current and future challenges.

Utilities are responding by modernizing the grid and upgrading equipment, components, and technologies. Shareholder-owned electric utilities in the US are forecasted to spend $159.2 billion in 2023 on capital investments, while Canadian electric companies spent $25.3 billion in 2021.

Energy 4.0 technologies, described in more detail in a recent article, can help utilities adapt to these trends by improving flexibility, resiliency, and safety while lowering the cost of operations & maintenance.

This article will highlight the 5 trends driving the need for Energy 4.0 technologies in the electric power utility industry. To learn more, read our recent white paper at Electric Energy Online, Energy 4.0 and Remote Asset Monitoring - How Utilities Benefit From Smart, Connected Devices.

5 Trends Driving the Need for Technology

1) Aging Infrastructure

Despite its role in powering the modern world, much of the North American electric grid looks very similar to how it was first built.

In fact, a recent report by the US Department of Energy found that more than 70 percent of transmission lines were more than halfway through their 50-year lifespan, while the average age of large transformers exceeded 40 years.

The situation is similar in Canada, where the majority of electric systems were built more than 50 years ago.

Equipment that is at or near the end of its life is more likely to degrade and deteriorate to the point of failure. A transformer failure, for example, could cost hundreds of thousands or even millions of dollars to replace while causing widespread outages and damage to surrounding infrastructure.

Energy 4.0 technologies provide greater visibility and control of high-value assets, improving maintenance and mitigating the risk of equipment failure at older facilities.

2) Extreme Weather

A 2021 report ranked the utility industry as the most at risk from climate hazards. Given this, it’s no surprise that climate resilience has become a key requirement for electric utilities as more frequent and severe events impact grid reliability and performance.

Globally, 3,165 extreme weather events occurred throughout the 2010s, compared to just 711 in the 1970s. And in the first three quarters of 2021 alone, the US experienced 18 weather disasters with losses exceeding more than $1 billion.

Energy 4.0 technologies help utilities reduce the impacts of adverse weather, manage outages more effectively, and restore service faster after outages.

3) Labour and Skills Shortages

As with many industries, utilities are facing a shortage of skilled and experienced workers. The average age of a US utility worker is over 50, and more than 50 percent of experienced utility workers are expected to retire within the next decade.

At the same time, fewer people are entering the industry, and utilities are increasingly competing with high-tech and other organizations for the new generation of workers.

Technology can reduce the burden on scarce technical resources. Remote monitoring solutions, for example, significantly reduce the need for time-consuming and costly physical inspections, allowing workers to monitor the health and performance of assets across multiple sites from a single, centralized location.

4) Renewable Energy

In response to growing regulatory, social, and investor pressure, utilities are heavily investing in decarbonization across the entire grid.

Generating technologies such as on-shore wind and photovoltaic solar are being implemented at increasing rates, with spending projected to total more than US$3.4 trillion over the next decade. And by 2028, it is expected that nearly all electric generation initiatives in the US will come from renewables.

However, today’s electrical grid was not designed to meet the needs of green energy sources. Energy 4.0 technologies help to improve the flow of data, allow for renewable integration and storage, and improve grid management and performance.

5) Distributed Energy

Similarly, renewables are changing the way that power is generated and transmitted throughout the grid. Traditionally, power has flowed in one direction, usually from a large generation facility that is located far from the end users of power.

However, a 2022 study found that 86 percent of consumers were interested in generating their own electricity. These distributed energy resources, or microgrids, require distribution systems to be upgraded and modernized to absorb the load and adapt to ever-changing grid conditions.

Putting Energy 4.0 Technologies to Work to Address Emerging Trends

Utilities are under increasing pressure to upgrade and modernize the electric grid. Faced with aging infrastructure, severe weather, labour shortages, renewable energy, and a decentralized grid, utilities that invest in the right technologies will be best able to respond and adapt to a changing landscape.

Energy 4.0 technologies and cloud-based applications provide utilities with greater visibility, flexibility, and control. Increased access to data and analytics allows utilities to monitor trends over time, improve reliability, and transition toward a condition-based maintenance strategy to lower operations and maintenance costs.

To learn more and to see how Energy 4.0 technologies can be implemented, read  our recent white paper at Electric Energy Online, Energy 4.0 and Remote Asset Monitoring - How Utilities Benefit From Smart, Connected Devices.