Utility Industry Focuses on Resilience, Digitization, and Cybersecurity in 2022

A survey of more than 250 executives and influencers across the US and Canadian power sector reveals that resilience, digitization, and cybersecurity are top of mind for electric utilities, an industry facing continued unprecedented challenges and change.

Survey results from the Guidehouse and Public Utilities Fortnightly’s seventh annual special report on the State and Future of Power found that:

• Nearly three-quarters (72%) indicated that cybersecurity of IT/OT systems represents the most acute risk to utility operations resilience.
• Nearly 66% said rapidly growing distributed energy resources (DER), which also improve business resilience, and includes storage and electric vehicles, are the most disruptive forces the industry faces today.
• 59% said technology and telecommunications companies pose the largest competitive threat. Notably, auto, and oil and gas companies are of growing concern as they expand investments in renewable alternatives to conventional energy solutions.

“Utilities are facing a landscape that is rapidly transitioning to one that requires clean energy solutions, improved resilience, and more control over energy costs for customers,” says Dan Hahn, leader of Guidehouse’s Energy Providers practice. “While many of the same challenges remain for the power industry in the midst of the energy transition, there are also emerging opportunities to explore, such as electrification of buildings and transportation, that are giving the industry hope. By embracing these changes, utilities can continue to create customer and shareholder value while supporting sustainability and ESG priorities.”

Cybersecurity Risks Weigh on Resilience Goals

Despite the growing frequency and severity of extreme weather events and fires, it is cybersecurity, rather than physical security and grid hardening, where utility industry participants see the greatest risk currently. Nearly three-quarters of 258 survey participants (72%) indicated that cybersecurity of IT/OT systems represents the most acute risk to utility operations resilience. In preparation for increased cyberthreats, survey respondents said that investments in advanced asset, information, and network control technologies, followed by accelerated internal training efforts, should be prioritized (46% and 41% respectively).

Converting Generation Sources Seen Boosting Resilience

To bolster business resilience, survey participants indicate that converting to sustainable generation sources and increasing investment in digital technologies are top priorities, at 40% and 35%, respectively. This will be emphasized by a shift toward DERs, which are key to increasing resilience, but must be enabled through digital tools. In its Global DER forecast database, Guidehouse Insights expects that cumulative DER will account for more than 28% of total installed capacity in 2030, up from less than 22% in 2022.  In order to manage the increasingly diverse and distributed sources of generation, the integration of digital technologies will be critical, according to the report.

Electrification of Buildings and Transportation is Utilities’ Best Near-term Opportunity

As in previous years, survey participants in 2022 believe the most attractive near-term opportunities will be found in the electrification of buildings and transportation. Not only will growth in these areas offset falling load due to energy efficiency and wider end-user ownership of renewables, the survey noted, but they also present opportunities for better real-time grid edge management and balancing.

The Infrastructure Bill Supports Industry Priorities

When questioned about the most attractive opportunities made available to the industry by the Act, respondents focused on transmission and distribution (T&D) upgrades and resilience, transportation electrification, and cybersecurity (75%, 67%, and 36%, respectively). The Act makes $65 billion available for long-overdue upgrades to the power grid, and another $12.5 billion in support of EV adoption, charging infrastructure and adoption of low-carbon and zero-emission school buses nationwide.

“The energy transition is clearly accelerating with new technologies being deployed at scale at a faster pace”, adds Mackinnon Lawrence, global lead for Guidehouse Insights. “As we look to the future, it’s encouraging to see increased focus on tangible, near-term investments that can have a direct impact on long-term grid and business resilience as well as renewables integration - an important tool in the fight against climate change.”

Download State and Future of Power to see the full survey results and insights from 13 of Guidehouse’s experts. The report analyzes today’s utility industry and the major changes expected in the next 10-15 years. Join the social media conversation through #FutureUtility.

About Guidehouse’s Energy, Sustainability, and Infrastructure Segment

With more than 700 consultants, Guidehouse's global Energy, Sustainability, and Infrastructure segment is the strongest in the industry. We are the go-to partner for leaders creating sustainable, resilient communities and infrastructure, serving as trusted advisors to utilities and energy companies, large corporations, investors, NGOs, and the public sector. We've solved big challenges with the world's 60 largest electric, water, and gas utilities; the 20 largest independent power generators; five of the 10 largest oil & gas majors; the 20 largest gas distribution and pipeline companies; European governments; and the US federal government's civilian agencies involved in the country's land, resources, and infrastructure. We combine our passion, expertise, and industry relationships to forge a resilient path toward sustainability for our clients. We turn vision into action by leading and de-risking the execution of big ideas and driving outcomes for our clients that enable them to reach their ambitions through transformation. For more information, please visit www.guidehouse.com/esi.

About Guidehouse

Guidehouse is a leading global provider of consulting services to the public sector and commercial markets, with broad capabilities in management, technology, and risk consulting. By combining our public and private sector expertise, we help clients address their most complex challenges and navigate significant regulatory pressures focusing on transformational change, business resiliency, and technology-driven innovation. Across a range of advisory, consulting, outsourcing, and digital services, we create scalable, innovative solutions that help our clients outwit complexity and position them for future growth and success. The company has more than 13,000 professionals in over 50 locations globally. Guidehouse is a Veritas Capital portfolio company, led by seasoned professionals with proven and diverse expertise in traditional and emerging technologies, markets, and agenda-setting issues driving national and global economies. For more information, please visit www.guidehouse.com.

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