Challenges and Opportunities in the Electric Utility Market


by Lee Layton, President of L2E Consulting

Electric utilities in the United States are facing a wide array of new challenges and these challenges create market opportunities. The following five trends are worth watching as the utility industry evolves to meet customer expectations.



Electric utilities are looking at blockchain ledgers to track the growing number of small independent power producers on their systems. Blockchain is the underlying technology for crypto currencies such as Bitcoin as well as a digital and immutable distributed ledger of transactions that are recorded and replicated in real time across a network of computers. Every transaction is cryptographically validated via a consensus mechanism.


An electric utility must track all sources of generation on its system with literally thousands of roof top solar systems. It is becoming an unmanageable process. Blockchain technologies can ensure all generation is appropriately tracked.



Electric utilities around the world took notice of 2015 cyberattack on the Ukrainian power grid that left a quarter of a million people without power. Everyday utilities are bombarded with cyber-attacks as bad actors attempt to infiltrate the utility infrastructure. Utilities are increasing moving to edge computing which creates more opportunities for someone to infiltrate their networks. Increased exposure, regulatory oversight, and growing concerns about “enemies of the State” have created a heightened concern about cyber-security.



Artificial Intelligence (AI) is one of the biggest technological trends transforming every business sector and AI has the potential to transform the energy sector because electric utilities are drowning in data. Hourly meter data and operational data from field equipment is overwhelming the industry’s ability to process and manage the data.


Especially important is how AI will transform consumer engagement. By parsing usage data and consumer attitudes, utilities will be capable of incisive target marketing at a previously impossible granularity.



The electric grid in the United States is composed of three very large grids. Micro-grids are “grids within the grid” and create an entirely new approach to how the electric system is configured. The increasing need for a secure, reliable, source of power for critical applications is driving the concept of micro-grids.


Distributed energy resources (DER) — small power generators located at users’ sites where the energy they generate is used — have emerged as a promising option to meet growing customer needs for electric power with an emphasis on reliability and power quality. When aggregated, DER such as photovoltaics, wind generators, fuel cells, micro-turbines, and other small generation sources can form into virtual power plants. And when coupled with intelligent control systems and directly fed loads they become micro-grids.



The holy grail for variable renewable energy resources (VRE’s) such as wind and solar is energy storage. Storage will increase the value of VRE’s by storing the solar or wind energy until it is needed. The most promising energy storage candidate is batteries. At present Lithium-ion is the top choice for utility grade energy storage. Other contenders to watch include Lithium-nickel manganese cobalt oxide (NMC) batteries and flow batteries.


These five trends will have a profound impact on utilities in the near future. There is also market opportunity for companies that can find ways to help electric utilities address these issues.


Please note: This article contains the sole views and opinions of Lee Layton and does not reflect the views or opinions of Guidepoint Global, LLC (“Guidepoint”). Guidepoint is not a registered investment adviser and cannot transact business as an investment adviser or give investment advice. The information provided in this article is not intended to constitute investment advice, nor is it intended as an offer or solicitation of an offer or a recommendation to buy, hold or sell any security. Any use of this article without the express written consent of Guidepoint and Lee Layton is prohibited.


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