Five Trends in Energy I’ll Watch in 2023

They were: decarbonization; electric vehicles; hydrogen; infrastructure upgrades; and advanced digital technology/analytics. All these topics will continue to be important in the coming years, so I thought I’d share five different trends (maybe not top trends) that I plan to follow closely in 2023. 

Extreme Heat and Wildfires Continue to Challenge

This trend is really a subset of climate change, a topic that isn’t likely to disappear for decades, if ever. I put this on my list because the trend impacts many utilities, and because I live high wildfire-risk area. A study published by the University of Vermont in December 2022 revealed that from 2010 to 2020, large numbers of Americans moved into regions where wildfires and extreme heat are common. These areas include Pacific Northwest, parts of the Southwest, Texas, Florida, and parts of the Southeast. While this increases wildfire threats for more people and businesses, it doesn’t mean the threats to these customers, as well as the utilities and infrastructures that serve them can’t be substantially mitigated. As utilities in these areas upgrade and build new infrastructure to accommodate the influx of customers, they must include technology like weather sensing devices, communication networks, and weather modeling software. 

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Eyes on Texas

It’s been nearly two years since the Texas bulk power system was ravaged by Winter Storm Uri. Since then, Governor Abbott, state regulators and legislators, ERCOT, and other state agencies have worked to ensure the state is ready for whatever Mother Nature dishes out in 2023. Public Utility Commission of Texas (PUC) chairman Peter Lake and ERCOT CEO Pablo Vegas spoke in a press briefing in late November 2022, ensuring Texans that the grid is “prepared” for winter and the bulk power system has adequate supply to meet the grid’s needs. Since Uri, the focus has been on winterizing fuel supply and distribution, as well as power plants.

Natural Gas-fired Power Stays Strong

The main reason Texas lawmakers want time to review the Phase 2 Market Redesign I mentioned above is because they question whether it provides enough incentive for independent power producers to build thermal power plants needed not only to increase capacity, but to increase continuous generation capacity. While gas-fired power represents the largest portion of U.S. generation — nearly 40% or 1.58 trillion kWhr in 2021, it came in well behind wind and solar in new U.S. generating capacity additions. According to S&P Global Market Intelligence, wind and solar led new capacity additions, with 41% and 36% respectively, in 2021 while gas came in at only 19%. The push to decarbonize and add renewable generation isn’t waning, but as the pace of renewable energy additions ramps up, it’s harder for grid owners and operators to maintain reliable service. Events like the one that occurred in Texas in 2021 could occur in other regions of the country if continuous generation is not built. Natural gas is not carbon free, but it’s cleaner than coal, provides steady power flow needed for grid stability, and the prices are dropping from those seen earlier this year.  

New Focus on Physical Security for Distribution Assets

Most of us familiar with the grid know that substations, transformers, and other equipment are vulnerable to not only natural disasters and cyberattacks, but also physical attacks. The 55,000 or so transmission substations in the U.S. are protected in accordance with NERC’s critical infrastructure protection requirements (NERC CIP-014). Distribution substations, which significantly outnumber transmission substations, are a different story. There are no federal requirements for their protection. In early December 2022, two Duke Energy distribution substations in North Carolina were damaged by gunfire, resulting in service disruption to 45,000 customers. A few days later, a journalist with the Oregonian Newspaper wrote an article highlighting recent attacks on multiple substations owned by Bonneville Power Administration, Portland General Electric and Puget Sound Energy. Unfortunately, they probably represent just a handful of such incidents that occurred across the country in 2022. This recent publicity could in the coming months elevate concern about distribution substations lack of physical security.

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