Dive Brief:
- U.S. electric utilities believe they will see an increase in distributed generation and stagnant load growth over the next 10 years, according to a survey of 576 industry executives conducted by Black & Veatch.
- 43% of those surveyed said that the rate of load growth has not returned to historical levels since the economic downturn of 2008, with 33% saying their utility's rate of load growth is flat or decreasing.
- The report also found the industry is moving towards more natural gas, with 50% of respondents saying they plan to replace aging capacity with gas-fired generation in the next five years.
Dive Insight:
New technologies have created an environment of incredible challenges and opportunities for utilities, the Black & Veatch report found, with distributed generation being one of the most significant. More than 60% of utility leaders surveyed believe distributed generation will grow beyond its current 5% market share of U.S. power generation by 2020.
The rise of distributed energy resources will create unique challenges for utilities, requiring rapid changes to the power grid in order to integrate new assets. Utilities must be able to ramp up capacity to account for varying renewable energy output and, where distributed generation reduces demand, utilities will have to revisit their current revenue structure in order to ensure continued reliable service.
“Every kilowatt that is now being produced by a third party or a consumer is a kilowatt not being sold by the utility,” said John Chevrette, president of Black & Veatch’s management consulting business. “At the same time, utilities still carry the burden of building, maintaining and operating the bulk of the power delivery system. Given the high cost of maintaining these assets, we expect to see more utilities making the case with regulators to adjust their business models.”