Black & Veatch: Technology Brings Risk, Reward, Uncertainty to Electric Industry

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Black & Veatch: Technology Brings Risk, Reward, Uncertainty to Electric Industry

Annual Strategic Directions Report reflects on a decade of transformation, and what’s next

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Learn how electric utilities are managing transformative supply, regulatory, technology & market-driven challenges.
Tuesday, August 9, 2016 - 9:05am

CONTENT: Press Release

OVERLAND PARK, Kan., August 9, 2016 /3BL Media/ – Distributed generation, the low price of natural gas and modern customer information systems (CIS) represent growth opportunities for the electric industry even as security concerns are on the rise and legacy power generation sources cede their prominence to new technology. Those are the top findings in Black & Veatch’s 2016 Strategic Directions: Electric Industry Report, the company’s annual review of the issues affecting the industry.

A decade ago, security ranked 10th on the industry’s top 10 issues list, while renewable energy was viewed as unlikely to have a material impact on the future plans for the industry. Since that initial Strategic Directions report, microgrids, electric vehicles and energy storage technologies have become strategic imperatives for utility leaders who see distributed energy resources and renewables as potential sources of revenue. According to the report, reliability remains a perennial concern with respondents ranking it as their number one issue for the past five years.

“Utility leaders around the world recognize that solar energy, wind power, microgrids and distributed generation are prominent in the new discussion around resource efficiency, and customers are compelling their infrastructure providers toward sustainability,” said Ed Walsh, President of Black & Veatch’s power business. “But some providers are expressing uncertainty about whether they can meet the expectations of an always-on, always-connected society that demands 100 percent up-time.”

The report examines how distributed generation, better informed customers and advanced technologies are ushering a new era of opportunity and uncertainty for the electric industry. The analysis also considers the impact of natural gas, the U.S. Clean Power Plan and the effects of coal retirements on balanced power generation portfolios.

Additionally, the analysis draws an important comparison between the state of today’s electric utilities and the sweeping change that recast the telecommunications landscape with the advent of customer demand for mobile technology. Engaging electric utility customers through new services, such as community solar or on-bill financing of distributed energy resources systems and maintenance, enables providers to evolve and meet customer demand by using existing infrastructure to expand beyond conventional core services.

“Today, you see (mobile carrier) retail stores under each brand selling the very equipment that has made their traditional model obsolete,” John Chevrette, President of Black & Veatch Management Consulting, writes in the report’s closing commentary. “They evolved to offer new services, such as broadband to the home and cellular services, among others, by leveraging their existing infrastructure and shared networks. These same opportunities exist for the power industry.”

Other key findings include:

  • In order to address costs related to the physical security of transmission assets, more than 40 percent of respondents are likely to proactively develop a comprehensive physical security approach.
  • Solar photovoltaics, energy efficiency, and energy storage represent the top three distributed energy resource projects being investigated by electric services providers.
  • Regulatory uncertainty, respondents said, is the biggest challenge associated with connecting storage to the grid.

Editor’s Notes:

  • Black & Veatch conducted its annual Electric Utility survey from 24 May 2016 through 9 June 2016.
  • 672 participants completed the survey. Statistical significance testing reflects precision of at least ±3.8 percent at the 95 percent confidence level.
  • The full Black & Veatch report is available for download at no charge via

About Black & Veatch
Black & Veatch is an employee-owned, global leader in building critical human infrastructure in Energy, Water, Telecommunications and Government Services. Since 1915, we have helped our clients improve the lives of people in over 100 countries through consulting, engineering, construction, operations and program management. Our revenues in 2015 were US$3 billion. Follow us on and in social media.

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CONTENT: Press Release