Snapshot of the Utility Clean Energy Transition

The clean energy transition is no longer a distant goal but an urgent priority. Electric utilities play a pivotal role in this transition by integrating renewable energy sources into the grid, implementing pilot technology programs, and working closely with customer and government agencies.

In February 2024, the Smart Electric Power Alliance (SEPA) released the Snapshots Utility Survey to capture critical data on the utility clean energy transition, as part of the broader Snapshots Program. This blog post and supporting infographic serve as a preview for the comprehensive Snapshots Market Intelligence reports, which will uniquely aggregate both utility and industry perspectives on the clean energy transition.

Snapshots Background & Program Information

In the beginning of 2024, SEPA relaunched its Snapshots Program, which will feature new Market Intelligence Reports aggregating data on the state of the energy sector’s transformation towards a carbon-free future. These reports will capture utility and industry perspectives through semi-annual Pulse Surveys, providing critical data points across SEPA’s six focus areas: Resilience, Transportation, Emerging Technology, Policy, Energy Storage, and Equity. The Snapshots Market Intelligence reports will help inform all stakeholders of the progress utilities and industry players are making. Stay tuned for the release of the Market Intelligence reports in October 2024.

The Snapshots Program captures a moment-in-time analysis of the transformation towards a carbon-free future. By surveying various stakeholders, the program offers a comprehensive view of the sector’s advancements and the hurdles it must overcome. This aggregation of utility and industry insights is unique in the marketplace, providing a fresh and timely perspective on the collective progress being made toward a carbon-free energy future. Although utilities and industry players may operate on different timelines and face distinct organizational challenges, the Snapshots Program aims to foster collaboration and improve stakeholder communication and understanding by sharing data and insights.

Survey Methodology

The Snapshots Program includes a Utility Survey fielded in February and March earlier this year. The Utility Survey collected 116 responses from employees representing 80 utilities, accounting for 56% of U.S. electric customers and spanning 46 states. The sample included 31 investor-owned utilities, 29 public power utilities, 18 cooperatives, and two federal entities.

Structured around SEPA’s six focus areas, the survey featured both open-ended and closed-ended questions. SEPA recruited participants, who optionally received a gift card incentive, via email, social media, and SEPA’s website. To qualify, participants needed to be full-or part-time employees at investor-owned, public power, cooperative, or federal utilities with a high-level understanding of at least one focus area.

The survey asked participants to verify their employment and provide contact information before delving into specific questions about various technology and program adoption, planning, implementation, and impact. The survey covered SEPA’s six focus areas, capturing insights into the barriers, challenges, and resources needed to further utility’s efforts in these areas.

Key Findings

This blog and the supporting infographic outline the preliminary key findings from the Snapshots Utility Survey.

Resilience

Resilience is a critical area in the clean energy transition. Electric utilities’ ability to withstand and recover from disruptions is vital. Most utilities that participated in the 2024 Snapshots Utility Survey reported moving forward with resilience-related efforts. Most have incorporated front-of-the-meter distributed energy resources (DERs) to enhance grid resilience (89%), hardened power lines, facilities, and substations (82%), and adopted behind-the-meter customer DERs (71%). Most surveyed utilities (88%) conduct a formal cost-benefit analysis to prioritize resilience investments, with 60% incorporating resilience benefits and 27% considering societal benefits.

Advanced technologies are crucial in these efforts, with 76% of surveyed utilities using sophisticated distribution and transmission system operation and outage modeling software. For example, an investor-owned utility prioritizes Advanced Distribution Management Systems (ADMS) and Distributed Energy Resource Management Systems (DERMS) for better grid control and renewable integration. A cooperative deploys Supervisory Control and Data Acquisition (SCADA)-controlled switches for improved remote monitoring.

Utilities still face significant challenges, including financial constraints, regulatory hurdles, limited staff, and physical space, when implementing or planning for resilience. Financial constraints are the number one barrier to implementing resilience-related initiatives, highlighting the critical need for external funding. Political environments and diverse customer needs further complicate these efforts, especially for utilities operating across multiple states with different Public Utility Commissions (PUCs).

Seventy-six percent of utilities reported leveraging federal funding. For instance, one public utility uses a Department of Energy (DOE) grid resilience grant to reinforce its sub-transmission grid, and another utilizes federal funds for wildfire risk mitigation projects. External funding is vital for implementing comprehensive resilience measures. One respondent noted, “Grant funding is the only way we can afford resilience projects. Without it, these projects will take years to complete.”

As utilities continue to navigate these challenges and leverage available resources, the path forward promises a more resilient energy grid capable of meeting the demands of a rapidly evolving energy landscape. Notably, surveyed utilities perceive aligning load growth and capacity with new generation and storage as the number one threat to U.S. energy security and resilience over the next decade which underscores the ongoing and future efforts needed to ensure a resilient energy system.

Transportation

Transportation electrification is a primary focus in the clean energy transition, with utilities playing a significant role in supporting the market adoption of electric vehicles (EVs) and low- or no-carbon vehicles. In 2024, the EV market is thriving with record-low battery costs and a diverse range of new models emerging. At least 17 states have set ambitious zero-emissions targets, and nearly 60% of used EVs are now priced under $30,000, making them more accessible than ever. [1]

Utilities emphasize enhancing charging infrastructure, developing effective financial strategies, and increasing customer interest in EVs. Utilities are focusing on initiatives such as creating public and workplace charging stations, offering financial incentives, and implementing time-of-use (TOU) rates. Success often comes from collaboration with stakeholders across the EV ecosystem, leveraging collective strengths and resources. A utility respondent summarizes what’s needed: “simplified customer experience, reliable and plentiful charging infrastructure, simple and non-invasive managed charging that creates value for customers and utilities.”

Key barriers to implementing transportation electrification programs include technical and infrastructure challenges, financial constraints, regulatory and policy barriers, customer engagement issues, and operational limitations. For example, outdated Internet of Things (IoT) connectivity for smart chargers and the need for system upgrades are significant technical hurdles. Financial constraints include the high costs of implementing programs and reliance on grant funding.

Despite these challenges, the future of transportation electrification looks promising as utilities, stakeholders, and governments continue to collaborate and innovate.

Emerging Technology

Emerging technologies are shaping the future of the electric utility sector, providing innovative solutions to longstanding challenges. Utility survey respondents most often consider DERMS, Virtual Power Plants (VPPs), Hydrogen, and Microgrids as the top emerging technologies in 2024. Other notable mentions included Small Modular Reactors, ADMS, and long-duration storage.

VPPs are particularly top-of-mind for utilities, with 33% of respondents planning for VPPs and 29% already piloting, operating, or partnering on VPP projects. VPP benefits include enhanced grid resilience, reduced greenhouse gas emissions, more efficient peak load management, greater integration of variable renewable energy resources, reduced operational costs for utilities, and cost savings for customers.

Utilities also report significant efforts in Artificial Intelligence and Machine Learning (AI/ML) to enhance efficiency, data insights, and load forecasting. For example, some utilities are exploring AI for load forecasting, using computer vision for vegetation management, and implementing AI-operated customer service centers.

Implementing emerging technologies presents challenges, including high implementation costs, a lack of technical expertise, regulatory hurdles, and concerns over technology reliability and long-term viability.

With continuous innovation, supportive policies, and industry collaboration, the future of the electric utility sector looks bright as these emerging technologies pave the way for a more sustainable energy landscape.

Policy

Policies are crucial in accelerating the clean energy transition by creating the framework for utility operations. Leading utilities are now publicly disclosing annual carbon emissions data (72%) and reduction plans (67%) and aligning customer programs with state implementation of federal Home Energy Rebates (61%). The top-performing utilities are also prioritizing Integrated Distribution System Planning (22%), strengthening internal governance (28%), and supporting large customers in achieving their carbon-reduction goals (33%). All utility respondents report adopting or planning to adopt some type of community or customer-focused carbon reduction activity.

The surveyed utilities listed renewable portfolio standards, tax incentives, and regulations promoting energy efficiency as the most impactful policies. However, policy uncertainty, a lack of cohesive national strategies, and bureaucratic delays are significant barriers. Utility respondents reported that clear and consistent policy frameworks and collaboration between federal, state, and local governments are essential to driving progress.

Utilities also emphasize the need for policies that align customer programs with carbon reduction objectives, such as energy efficiency programs, renewable energy initiatives, and beneficial electrification. Regulatory support and financial incentives are crucial to successfully implementing and scaling these programs.

Energy Equity

Ensuring equitable access to clean energy is essential for a just transition. As reported by surveyed utilities, efforts to promote energy equity are gaining traction, with programs explicitly targeting low-income communities and marginalized groups. These initiatives aim to ensure that the benefits of clean energy, such as cost savings and environmental improvements like less air pollution, are accessible to all. [2]

However, there are significant barriers to achieving energy equity. Financial constraints, lack of awareness, and infrastructure limitations are some of the critical challenges utilities face. Many utilities report needing more financial, human, and time resources to effectively plan or implement equity-related initiatives.

Strategies for overcoming these barriers include community engagement, targeted financial assistance programs, and inclusive policy-making. Engaging directly with communities helps stakeholders understand their unique needs and challenges, while financial assistance programs can alleviate some economic burdens. Inclusive policy-making integrates equity considerations into broader clean energy strategies.

78% of surveyed utilities report having dedicated personnel for Diversity, Equity, and Inclusion (DEI) or community engagement. One respondent highlighted, “We have a DEI team and integrate D&I in our business strategy. There are Employee Resource Groups across different social categories, supporting diversity, and we partner with colleges, including HBCUs to attract and retain the best talent. Our DEI goals are assessed and updated at least annually.” This reflects a growing commitment within the utility industry to address and prioritize energy equity as a core component of their operations.

Energy Storage

Energy storage is vital for balancing supply and demand, integrating renewable energy, and ensuring grid stability. While the adoption of emerging energy storage technologies such as batteries is still low, it is rising. For example, only 4% of surveyed utilities reported already adopting some type of long-duration energy storage solution.

High costs, regulatory complexity, technological uncertainty, and infrastructural limitations are barriers to energy storage implementation. Financial support through grants and low-cost loans, access to training and knowledge, stakeholder engagement, and proven technologies are necessary to advance energy storage adoption.

Utilities are leveraging various strategies to support energy storage, such as incentive programs for residential and commercial storage, demand response programs, and exploring long-duration energy storage technologies. Continuous innovation and improvement in battery technologies, reducing costs, raising public awareness, and supportive policies are crucial for broader adoption.

Next Steps

The SEPA Snapshots Program highlights significant progress in the clean energy transition and underscores the remaining challenges. We must address these barriers through continued innovation, supportive policies, and collaborative efforts as we move forward. The electric utility sector must remain proactive in adopting new technologies and practices to achieve a sustainable future.

Stay tuned for SEPA’s Snapshots Market Intelligence Reports, coming this fall. These reports will consolidate both utility insights and industry perspectives, gathered from the complementary Snapshots Industry Survey, into detailed, comprehensive focus area snapshots.

How to Get Involved

Join SEPA’s efforts by participating in the Snapshots Industry Survey (targeting industry players – live until August 6th!), attending industry events, and collaborating on innovative solutions. Together, we can drive the clean energy transition forward. Please visit the Snapshots website or contact [email protected] for more information about the Snapshots Program!

1. (2023). EV Adoption in the US: Research & Trends. https://www.recurrentauto.com/research/ev-adoption-us
2. (n.d.). Local Renewable Energy Benefits and Resources. https://www.epa.gov/statelocalenergy/local-renewable-energy-benefits-and-resources