December 2022 | Report

2023 Outlook: The Future of the Energy & Utilities Industry

Changing the power grid is no simple task—and utilities must face these digital transformation challenges in 2023 while still keeping the lights on

Today’s utilities are evolving. While foundational aspects—affordability, resiliency, and reliability—are still top of mind, energy industry trends show that utilities are quickly becoming digital, service-based enterprises tasked with leading the charge toward decarbonization while enabling customers to reach their own sustainability goals.

What does digital success look like for utilities? Using asset and data management to inform investment decisions. Anticipating, preventing, and mitigating outages—with more targeted and faster service restoration. Smarter, more efficient decision-making throughout the organization. Leveraging AI and ML-enabled business processes and operations in real time.

2-Minute Takedown

Decarbonization

The focus on decarbonization to address the effects of climate change and worsening air quality is driving acceleration in transportation and building electrification, investments in renewable energy, and new energy market participation.

Electrification

A clean energy future brings with it added pressure for utilities in the way of production and transmission. Full electrification will require a multi-pronged approach, forcing utilities to find creative solutions. Government funding, leveraging hydrogen and renewable natural gas, and a portfolio approach with multiple technologies can help keep costs down and meet net-zero goals.

Decentralized power generation

Distributed generation presents a range of benefits and will provide more energy independence for end customers, however widespread emergence on a distribution grid can create a range of issues for today’s electric utility. Addressing reverse power flow and proactively managing the interconnection of DERs will be key for renewables to find their rightful place in the resource stack.

Data and analytics

Utilities have no shortage of data—but extracting true value from it remains a challenge. No area of the utility is free from the need to collect, process, and analyze data to improve operations. Utilities that best govern their data to enhance customer care, improve their own personnel, and parse out the most valuable information will get ahead.

Financial performance and operational efficiency

Higher expenses and higher rates are putting mounting pressure on utilities as they continue to face growing regulatory scrutiny, shifting customer expectations, and investor demands for consistent returns. Focusing on a technology-forward approach, expanding the use of operational technology, and digitizing the back office can simultaneously benefit the customer and utility financially, and create more efficient operations.

Cybersecurity

Cyberattacks are much more than just a business threat for utilities. It is a matter of national security. Minimum viable products are no longer adequate given the increasing grid connectivity and amount of data utilities have. Investments in cloud, security, and governance have quickly become requirements for utilities looking to protect their assets.