Coronavirus and the Future-Proofed Utility

Author: Chris Richardson

What technical challenges must we solve to transform and harden the power system, both over the long term and in this year of the coronavirus?

Summary: Together with The Fraunhofer USA TechBridge Program, ADL Ventures is launching a study to identify technical challenges that, if solved, could significantly decrease risk or increase revenue at electric utilities. Given the rapidly materializing coronavirus-related challenges confronting utilities, we are also tapping into the collective wisdom of utility innovation leaders to identify the new challenges expected to impact 2020 and 2021. Forward-looking leaders at global utility companies are encouraged to participate in our dynamic study of the Future-Proofed Utility (Now expired), powered by Entromy, a novel software platform.

Transformation isn’t just coming to the utility industry, it’s already here. The question is whether utilities will lead the transformation or lag behind.

Renewables may be a key to decarbonization, but a high penetration of distributed renewables could threaten a utility business model built around a centralized grid. With the potential reductions in baseload or dispatchable power now and in the future, it is increasingly important to tap into short term and long term storage options to increase resiliency.

Dissatisfaction with a utility’s slower transition towards a clean energy mix and the potential conflict of interest between a profit driven utility and customer expectation of a lower delivered cost of electricity has already triggered a push towards municipalization (see California and Boulder).

Beyond these longer-term risks, it’s impossible to avoid discussion of the emerging risks due to pandemics like the novel coronavirus. Given that hospitals rely on power from the grid and ill patients are self-quarantining at home, the electric grid is nearly as important in a pandemic as the healthcare system that relies on it.

It’s likely that you’re reading this Spring 2020 article from your home in the middle of the workday. The coronavirus will make it more difficult for sick or socially-distanced field crews to keep the utility asset base humming and it will make it more difficult for the utility to receive critical parts, chemicals, and raw materials in the face of a battered supply chain. The coronavirus also threatens electricity demand, as increased residential consumption will likely pale in comparison to decreased commercial and industrial (C&I) consumption. 

This pandemic is among the most disruptive global events of our lifetimes, but it is unlikely to be the last one we face. With a better understanding of how to overcome the challenges of today, we will improve our response to the pandemic of tomorrow.

Of the many challenges facing electric utilities, which are most urgent, which are most likely, and which are most consequential?

Even at forward-looking utilities, it can be hard to surface and prioritize these challenges. Utilities tend to be siloed organizations, making it hard to cut across functions to gain broad visibility to these challenges. Moreover, there are few scalable mechanisms to gather collective wisdom across utilities.

Better visibility to the challenges identified across utilities could help each utility prioritize its own innovation efforts and could even support collaboration among utilities that have identified the same problem statements. 

The USA TechBridge Program and ADL Ventures are launching a study to identify and prioritize the most pressing 5-10-year challenges facing the utility industry. This study will leverage Entromy’s AI-powered platform, which features a “digital focus group” capability to inspire participants with suggestions of similar ideas from others. Entromy guards against groupthink by allowing participants to upvote or downvote the open-ended responses of other participants.

Of course, even after these leading challenges have been identified and prioritized, gaps will remain. Utilities often lack the internal expertise (e.g. fintech, data science) and hardware (e.g. robotics, drones) to solve many of these challenges. While startups may possess the required capabilities, they may not have access to the financing mechanisms required to deploy pilots or large-scale demonstration projects. 

The solutions to these challenges can be addressed through open innovation (see How the Innovation Community Can Answer the “If Only” Call of Electric Utilities), corporate venturing, and non-diluting government or private R&D investment.

But before leading with solutions–which happens all too often in the startup community–let’s start by defining the problem statements (see Corporate Venturing Into the Unknown Problem Statement). We invite forward-thinking leaders at all electric utilities to share their perspectives on these challenges.

All participants will receive a document that summarizes and prioritizes the insights that emerge from this study.

For each utility that has at least 10 individual responses, ADL and Fraunhofer USA will develop a custom analysis that highlights the unique opportunities identified at the utility and the opportunities for collaboration with others that share common challenges.

If you have any questions about this study or its expected output, please contact us.

Author: Chris Richardson