Striving for greater efficiencies on the grid

Investor-owned electric utilities and stand-alone transmission companies invested a record $21.9 billion in transmission facilities in 2017, up 6.1% from the $20.6 billion invested in 2016, according to the 2018 Annual Property and Plant Capital Investment Survey by Edison Electric Institute (EEI).

Spending on infrastructure to deliver power to homes and businesses has increased steadily over the past 10 years as utilities build, upgrade, and replace station equipment, poles, fixtures, and overhead lines and devices. Our recent World Energy Market Observatory (WEMO) showed the investment in grid modernization is fueled by a reduction in wholesale prices and focus on asset integrity and safety.

Transmission investment is expected to peak in 2018 before levelling off in 2019 and 2020. While most of the projected investment will fund expansion of the transmission network and construction of new lines, the remainder is focused primarily on replacement of existing transmission lines and system improvements, such as hardening, physical and cybersecurity measures, and the adoption of smart technologies that improve and maintain the grid’s resilience.

These investments are an effort to meet changing customer expectations while providing a low-cost, reliable service.

The next step is digital innovation within utility operations. De-carbonization, disintermediation, and decentralization are on the rise at a time when consumption is decreasing. Technologies such as artificial intelligence (AI) and automation play a pivotal role in managing supply and demand, increasing efficiencies in the entire utility value chain, boosting customer experience, and transforming business models.

There are significant savings to be captured with digital technologies. Our research estimated annual worldwide savings of $237 billion to $813 billion could be achieved through intelligent automation. Frontrunners will have the advantage and are already allocating more of their IT budgets to automation.

With automation, 81% of companies surveyed said they had boosted the customer experience through quicker responses, while 78% saw a decline in the number of processes related to queries and purchases.

The analysis indicates that although alternative energy is getting increasingly cost-competitive, cleaner energy systems alone will not be capable of meeting the baseload generation needs for the foreseeable future. The optimal solution is to use complementary conventional and alternative energy resources in a diversified generation fleet.

Investment in existing infrastructure is critical, and utilities also must respond to the disruptions of new energy sources and an increase in options presented to consumers and businesses. Digital technologies will help move operators forward while ensuring the transmission grid is supported.

Randy Cozzens is an Executive Vice President and North American Energy, Utilities, and Chemicals Market Unit Lead at Capgemini and he can be reached at randall.cozzens@capgemini.com.

Randall Cozzens

Expert in Account Development

I collaborate with the Business Units in North America to drive Capgemini’s strategic growth agenda. Our NA Go To Market teams develop and nurture client relationships; understand the clients’ critical business issues; and architect innovative, fit-for-purpose solutions to drive tangible business value relative to the critical business issues.