During the summer of 2021, extreme weather events across the world showed us the catastrophic consequences of climate change in our daily lives. In the United States, unprecedented heatwaves, catastrophic wildfires, and torrential floods led to the loss of human lives and widespread destruction. Hundreds of thousands of people were displaced, property and infrastructure was destroyed, and the impacts on flora and fauna are extensive. The frequency and magnitude of these events have put extreme stress on the already aging US electricity infrastructure. Utilities in states like Texas (last winter), or Louisiana (this summer) have been unable to provide power to large numbers of households, for days or weeks at a time, amidst extreme temperatures which have put lives at risk and have caused severe disruptions throughout the grid. In Texas only, the crisis left 4,5 million homes and businesses without electricity, some for many days, while the estimated economic damage amounted to a staggering 195$ billion.
Challenges and opportunities
Extreme weather phenomena are only expected to increase in severity and frequency, prompting utilities to increase grid resilience, secure operational preparedness, and acquire better intelligence to mitigate the impact of disruptive climate changes. As the White House is pursuing a massive infrastructure plan to accelerate the energy transition to clean energy, upgrade the nation’s power grid, and improve infrastructure resilience, many opportunities lie ahead for utilities. So how can utilities expand existing knowledge to capitalize on the new energy package and be better prepared for future climate change challenges?
Investing in demand response programs
Long gone are the times that the relationship between the utility and the customer was purely functional and transactional. Nowadays, the measures that utilities could follow to reduce energy load in the grid during periods of peak demand, the so-called demand response, are directly connected to their customers. Frequent multi-day blackouts to mitigate fire risk, and skyrocketing energy bills during periods of crisis, have already generated tremendous customer dissatisfaction. Transparency and better consumer education are essential to reversing this trend. Technology allows utilities to better advise customers on how to respond during extreme weather events. These so-called Behavioural Demand Response programs provide recommendations to consumers to reduce or shift demand to help balance the grid, offering compensation for doing so. Another interesting aspect is that demand response programs can improve customer loyalty for example by promoting a sense of community where customers’ individual contributions aid in the prevention of blackouts.
Managing load in the grid by having better insights
Presently, there is a tremendous opportunity for utilities in the United States to gain deeper insights into customer energy demand and production. Advancements in data technology have resulted in significantly improved demand and supply forecasting. Artificial intelligence can now predict growth indexes of residential solar production, and forecast exactly when residential demand and photovoltaic production outliers or spikes are going to occur. This information cannot only improve day-to-day operations but also improve energy providers’ response to extreme weather events. For example, utilities can reach out to people who have solar installations, storage systems, and electric cars and offer them compensation to feed the grid in order to maintain grid balance.
What’s up for the future
Severe weather events are expected to increase in number and intensity, and utilities should explore options to mitigate the impacts of these events. Weather disasters have already cost the U.S. over $1.9 trillion since 1980. Failure to maintain and upgrade infrastructure can expose utilities to legal action and financial risks when they are held responsible for effects that severely impact their customers and society as a whole. Examples of this include being held responsible for causing wildfires, for failing to supply the necessary electricity to power medical devices at critical moments, and others.
Innovations in data capture and artificial intelligence among others can enable utilities today to improve their emergency management and transform the relationship with their customers from transactional to relational. At the same time, utilities will gain a more sophisticated understanding of electricity demand and supply, allowing them to better and more efficiently serve their customers.