Resources

by Matt Churches, Vice President for Utilities at NM Group

Distribution networks have a crucial and often difficult job of ensuring reliable, safe electricity reaches us, the customer. Typically, they have smaller budgets and much larger service areas than their transmission counterparts. This makes managing the network a significant undertaking. Clearly every network area and the challenges they face are different. However, I believe there are a number of common pain points that affect the majority of operators. In this blog I wanted to shed some light on what I believe are the 10 major challenges facing distribution utilities today.

1. Aging infrastructure

Much of the infrastructure which makes up the entire power grid is aging, with parts of the grid more than a century old.  Networks are struggling with an asset base nearing the end of its lifetime. This makes the decision to replace or maintain consistently more difficult.

2. Unpredictable demand

Electricity demand has risen by 10% during the past decade. The move to electric vehicles will likely increase but economic pressures have also had an impact on depressing demand. What will the future hold and how do you plan for this?

3. Regulatory compliance

Utilities are subject to a complex web of constantly evolving regulations. Non-compliance results in enforcement actions and fines, not to mention the reputational damage from bad publicity. Methods to predict asset failure or identify outage risks, such as from vegetation will become more important going forwards

4. Maintaining an asset register

Distribution networks typically consist of hundreds of thousands of poles and associated assets. Ensuring a complete up-to-date record of this, is a substantial challenge for any operator

5. Managing cost base

Higher costs mean higher rates for customers. Maintaining existing assets, new construction and managing vegetation around the system are significantly costly to a network operator and on top of this costs of doing business in general are rising. Compounding these challenges are ever-increasing regulatory and funding pressures to justify their management actions and expenditure decisions.

6. Minimizing restoration time

Severe and prolonged outages can cause significant damage to reputation. Problems inevitably will happen but being able to identify the location and cause of the issue is at the heart of this challenge. Network reporting services that can locate the position of faults can help but this requires accurate maps and network GIS data.

7. Storm preparedness

Extreme fluctuations in wind and temperature can have massive consequences and are clearly entirely out of the control of any operator. Building network resilience is a significant challenge. This requires predicting weather patterns, understanding critical network locations and identifying or removing trees that present a fall-in risk.

8. Managing customer expectations

In the internet age, managing customer expectations is harder than ever. The negative publicity of outages can be damaging and social media propagates both positive and negative reviews. Furthermore, customers often have unrealistic expectations about rate increases and outage times.

9. Digitization

Going forward, a modern, intelligent grid will be a digital grid. Information and operations technology must both expand and merge. Digital asset management, smart grid technologies and the Internet of Things are likely to play a large part in this process.

10. An aging workforce

Baby Boomers retiring from the power industry is in danger of causing a shortage of qualified utility workers. Recent studies estimate that over 100,000 workers will be needed to meet this shortage. Attracting qualified professionals and college graduates will be a major issue in the coming years.