As I have always said, the transition to a carbon-neutral future requires everyone to come to the table to make a difference. We need consumers, businesses, government, academia, and more to recognize the challenges that lie before us and to come together to find solutions. One sector that will have a big role in helping us move to carbon-free energy is utilities.
Utilities face interesting market conditions today. The regulatory environment can often either restrict or strongly encourage action to move forward. Still each utility has different priorities, business models, processes, and geographic considerations when moving forward to a carbon-neutral future. Certainly, technology becomes a big component in this journey.
The Smart Electric Power Alliance recently released a Utility Transformation Profile, as part of its Utility Transformation Challenge, which is a comprehensive assessment to gauge utility progress and identify actions to accelerate the transition. The challenge explores the critical role utilities, and their stakeholders play in addressing opportunities and challenges.
To create the 2023 Utility Transformation Profile, the Smart Electric Power Alliance collaborated with more than 100 individual utility members. This includes extensive information from electric utilities of all types, sizes, and geographic areas.
Let’s take a closer look at what it uncovered. Many of these individual utility members have taken long strides toward decarbonization with 29% of them achieving an increase of 10 percentage points or more in their carbon-free energy supply from 2018 to 2021. What’s more, 62% of them have developed a publicly available action plan to support their carbon-reduction target and 62% have incorporated at least one interim target into their goal.
The bottomline is each utility has a different path to a carbon-free energy system—but the ones that were most successful have targets that include both direct and indirect scope emissions; accelerating target dates; interim targets; and developing action plants. Many are just beginning to expand their carbon-reduction targets to include Scope 3 emissions, with 15% including these emissions in their targets.
As I have written about before, of all the Scopes, 1 and 2 are the easiest to measure, but Scope 3 is often harder to measure. This is the category that is associated with everything else and not just the company, but all of the suppliers upstream and downstream of the value chain. So, it would make sense that utilities are a bit more hesitant to include Scope 3 emissions in their targets. Still, there certainly are ways to track this—but I digress.
All in all, the report suggests utility respondents are increasing their visibility into the distribution system operations to a varying degree, with AMI (advanced metering infrastructure) the most often-cited program or project. Additionally, ADMS (advanced distribution management systems) and DERMS (distributed energy resources management systems) have been fully implemented by only 21% and 12% of utility respondents, respectively.
For those looking to move forward, the report also suggests four key dimensions of utility transformation including:
Clean energy resources, which is the procurement and deployment of carbon-free energy and the use of other carbon-reducing capabilities.
Corporate leadership, which considers operational knowledge, expertise, and influence to navigate change management.
Modern grid enablement, which of course requires the use of technologies to modernize the grid and facilitate the move to clean energy.
Aligned actions and engagement, which often includes policy frameworks established by governing authorities, as well as support from a wide range of industry stakeholders.
As we move forward on this carbon-neutral journey, there are many factors to consider. But one thing is for certain: we just need to start. I am glad to see utilities are beginning to take that step forward.
Want to tweet about this article? Use hashtags #IoT #sustainability #AI #5G #cloud #edge #futureofwork #digitaltransformation #green #ecosystem #environmental #circularworld