The biggest market trends according to energy experts at DISTRIBUTECH International

What are the biggest market trends in the energy sector? Walking the floor during DISTRIBUTECH International in Orlando, Florida, I asked energy experts this very question – their answers might surprise you.

With opinions ranging from AI to electrification and renewables, as well as plays made by non-traditional entrants, this edition of Smart Energy’s Power Playbook lays down how experts analyse the evolving energy market.

Digital adaptation

According to Brad Johnson, director of solution management for tech company Bentley, a key talking point has been blending in automation, from AI – the core focus during the DISTRIBUTECH conference – to machine learning and augmented reality.

“One of the trends we’ve noticed professionals talking about is how to blend all these technologies into utility practices in a way that’s approachable for professionals.”

To do so, he adds, human assistance will be crucial as a “first step into automation. Rather than just pushing the button and trusting the output will match, it means keeping close supervision on the technology.

“AI and ML technologies will offer that ability to peer into the process, provide supervision and remove barriers to adoption.”

Hitachi Energy’s Steven Kunsman and Tanya Wright also highlighted this push into the digital environment.

Wright, a vice president of marketing and communications, comments on Hitachi’s moves to “transform itself as a global conglomerate and become more digital, because they see that the world is transforming and changing and moving toward digitalisation across all industries, including energy.”

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Referencing combined capabilities from Hitachi Energy, Hitachi Ventara (an IT services management company) and GlobalLogic (a digital engineering company acquired by Hitachi in 2021), the two reps comment that digital transformation has been a key thought in the mind of companies looking to grow.

Says Kunsman, head of global product management: “There’s competition and companies are looking to answer the question of (how to) position themselves…Utilities will be going through a huge transformation with their operational technology, including substations, where digitalisation and connectivity will lead this change.

“Increasing levels of renewables penetration and distributed energy resource (DER) plants are connecting to grids that traditionally were not designed for DER interconnection.

“For these changes, companies need to review their portfolio and solutions offering to identify gaps and develop strategies to either fill those gaps through various acquisitions or develop those capabilities within the organisation.”

Kunsman adds: “The biggest trend right now is the transition to clean energy and deployment of EV infrastructure. And from that perspective, every utility will have a role in this major transformation to be able to support this type of change in the marketplace.”

Electrification and the EV era

Kunsman’s commentary on digitalisation and EV interest came as no surprise. Utilities have increasingly recognised the increasing urgency of consumption management on the power grid as a high priority.

However, says Garret Fitzgerald of the Smart Electric Power Alliance (SEPA), although its importance is clear, this clarity is a recent phenomenon.

Fitzgerald, a senior director of research and industry strategy for transport and electrification, says that its importance only came onto the table over the last four to five years:

“I’ve been in this market for about 15 years and 10 years ago I started talking to utilities and advising them on the upcoming load growth from EVs and the subsequent planning that will be needed. But for five of those 10 years, most utilities said ‘It’s not a big deal. If they come, we’ll manage it.’”

Citing European policymaking and mandates for vehicle electrification, Fitzgerald says that signals are now being sent to OEMs to “invest billions and billions of dollars in battery manufacturing and EV lines.

“With all of that coming together at a global scale, utilities are recognising that the EV wave is here.

“When you see some of the sales figures for EVs – 25% in California and 10%, across the US – we see that it’s real.

“The biggest trend I’ve seen is that transition from three or four years ago of utilities being unsure of the EV transition to now acknowledging the need for load planning from their uptake and what this means for the distribution system and what it will require of regulators.”

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Renewable integration and non-traditional players

Of course, it is not only EVs that represent a significant load management challenge.

According to S&P Global analysis, clean energy technology investments in 2024 will rise by 10%-20% compared with 2023, with renewables continuing to take the lion’s share. This uptake was repeatedly cited as a key market focus.

“There is a much greater interest in integration of renewables than in the past and it’s growing all the time,” commented Phil Beecher, president and CEO of Wi-SUN Alliance, a California-based consortium of global corporations in the smart utility, smart city and IoT markets.

“Storage and EV charging continue to be areas of interest … However, we’re seeing huge growth in renewable activity in emerging countries, such as India and Latin America, where it seems to be taken very seriously.”

Echoing Beecher’s sentiments was Bryan Sacks, global CTO and solution leader for energy, environment and utilities at IBM, a tech company focusing on hybrid cloud and AI solutions.

“What I’m finding really interesting is non-traditional entrants into the energy market – for example, traditional oil and gas players – who are starting to invest heavily into technologies, such as batteries, EV charging stations and renewable generation.

“For example, we’ve started to see companies like Walmart, which has massive roof space for solar, looking at deploying this type of technology.”

According to Sacks, it is also worth watching how the energy market will evolve to take advantage of these new entrants.

“What impact is that going to have on the traditional energy regulated components of the marketplace that don’t necessarily have the same flexibility?

“The evolving interplay between the regulated market and other growth markets, as well as how utilities invest in non-regulated areas to take advantage of those spaces, will become fascinating to watch.”

Were you at DISTRIBUTECH International? What were your key takeaways and what are some of the most interesting trends you’ve seen emerging?

Let me know.

Cheers,
Yusuf Latief
Content Producer
Smart Energy International

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