Rethinking the

Modern Grid
Black & Veatch
2022-2023 Electric Report
About Based on a survey of roughly 250 U.S. power industry
stakeholders, Black & Veatch’s 2022-2023 Electric Report

This explores a sector transforming itself at an undeniably

transformative time.

Report This repowering of the power sector is profound in an increasingly

complex energy ecosystem involving not only the rapid growth of
hydrogen, microgrids and distributed energy, and power generation
from the sun, wind and conventional sources but also changes being
driven from the customer space.

Aging infrastructure – long the industry’s chief challenge – this

year shares the top spot among the list of survey respondents’
concerns with the need to integrate the surging influx of renewables
and distributed energy sources onto the grid. That challenge of
accommodating green energy on the grid last year surpassed aging
infrastructure as the industry’s foremost challenge for the first time
in our reports in more than a decade.

Investment and regulatory uncertainty remain headwinds, along

with pressures to bolster grid resilience against droughts, floods,
hurricanes, wildfires and other extreme events brought about by
climate change – the bedrock of global pushes by countries, states,
counties and corporations to decarbonize. Amid the migration
toward cleaner, greener energy and quests for lower carbon
footprints, the proliferation of electric vehicles is stoking pressure
on power providers to find ways to meet the expected, sizable
charging needs.

As electric utilities pursue heightened sustainability, reliability and

resiliency, help appears to be coming from federal taxpayers in the
form of welcomed, generational spending mechanisms pointing
billions of dollars to grid improvements.

This report takes the industry’s pulse on those issues, the need for
more robust cybersecurity positions and more, drawing on survey
findings and thoughtful analyses to paint a clear picture of a power
sector modernizing with new technologies and improved concepts to
keep the power flowing to industry, businesses and homes.

We welcome your questions and comments regarding this report

and Black & Veatch services. You can reach us at MediaInfo@bv.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | ABOUT THIS REPORT | 2

Contents

Executive Summary 4
25
Amid Decarbonization Momentum,
Money & Politics 10 Renewables Help Drive Electric
Utility Sustainability Plans
11
Federal Funding and the Grid:
Infusion of Investment Stirs Opportunity
29
Clean Energy Trends: Renewables,
Battery Storage Lead the Way
14
Despite New Federal Funding
for the Electric Sector, Investment
33
Uncertainty Lingers With Momentum from Federal Funding,
Vehicle Electrification Must Stoke
Utility Planning, Investments
Decarbonization 17

18 37
Energy Storage, Now
Accelerating Decarbonization: (But Not Necessarily Here)
Investments, Trade-offs and
Technology Alternatives
40
21 The State of Cybersecurity
Technology in the Electric Sector
Unrelenting Climate Change
Presses Need for Grid
Modernization, Resilience About the Authors 43

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | CONTENTS | 3

Executive
Summary
U.S. Electric Sector’s Repowering Hinges
on Grid Modernization, Renewable Energy
Sources and Storage
By Laszlo von Lazar
 S
ince its humble roots in the late 1800s, the U.S. electric grid
has evolved, dutifully moving the electrons that did everything
from powering the nation’s industrialization and wartime
machines to being the lifeblood of today’s factories, computers
and appliances.

As that infrastructure continues to show its age, a repowering of

the power industry through a transformation toward lower- or zero-
carbon generation to power a cleaner, even more electrified world —
from the electric vehicle (EV) sector to automation and beyond — is
afoot, forced by today’s complex, diverse and unyielding challenges.
A B OUT TH E AUTH OR Droughts, floods, wildfires, hurricanes and other extreme weather
events attributed to climate change increasingly are straining the
Laszlo von Lazar is president of grid, stoking questions about its resilience. In May, Reuters reported
Black & Veatch’s Energy & Process that power outages have more than doubled in the past six years
Industries (E&PI) business and compared to the previous six, according to the media outlet’s
serves on the company’s board examination of federal data.
of directors and leadership team.
As the global push for decarbonization intensifies, the U.S. clean
Before being named to head E&PI,
energy business — power from the sun and the wind, both on land
he was president of BV Operations
and offshore — is booming, forcing utilities to sort out the strategy
and was a key architect in
and investment needed to accommodate those green sources
successfully establishing the
of power. Pressure to make that happen is coming from the top
group as part of a companywide
of the U.S. political establishment, with President Joe Biden’s
transformation. Von Lazar joined
administration ambitiously wanting a decarbonized grid by 2035
Black & Veatch in 2019 to guide
and zero emissions economywide 15 years after that.
global projects for the company’s
previous power organization, The electrification of the nation’s transportation sector is
for which he led engineering, accelerating, prompting the power sector to accommodate the ever-
procurement, construction, project increasing charging demands — now rivaling aging infrastructure as
controls, quality and business a chief concern of electric utilities. Regulations continue to shift in
excellence. His 33 years of fueling uncertainties, and cyber threats haven’t abated, exposing
experience, including global project grid vulnerabilities.
leadership for GE and Bechtel,
comprises work in conventional All the while, new technologies such as hydrogen — widely viewed
power generation, solar and as an ascending star in tomorrow’s energy ecosystem — and
wind generation, transmission wider use of battery storage and distributed energy sources are
and distribution, oil and gas, and enjoying greater attention, giving utilities even more to think about
industrial markets. as pressures mount for them to reimagine tomorrow’s diversified,
balanced energy portfolios.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | EXECUTIVE SUMMARY | 5

Figure 1
What are the top three most challenging issues facing the electric industry in your
region today? (Select up to three)
Source: Black & Veatch

28.7 28.7
Lack of skilled workforce................ 21.9%
% % Aging workforce ............................. 21.1%

25.3% Reliability ....................................... 20.7%

Planning/forecasting uncertainty ... 19.4%
Cybersecurity................................. 17.7%
Distribution system upgrades
and modernization.......................... 16.9%
Economic regulation (i.e., rates) ..... 15.6%
Distributed Energy Resources
(DER) integration ............................ 13.1%
Resiliency....................................... 13.1%
Energy Storage ............................... 12.2%
Grid Stability .................................. 11.0%
Uncertainty of investment .............. 10.1%
Grid congestion .............................. 5.9%
Renewable Aging Environmental Market structure............................. 5.5%
integration infrastructure regulations Access to capital investment .......... 3.0%

Despite the headache-inducing headwinds, challenge. Staffing issues continue to be a

opportunity knocks, most notably in the infusion of headwind, with a combined 43 percent either
hundreds of billions of dollars in available federal citing the lack of a skilled workforce (22 percent)
funding meant to modernize the grid to lower the or the industry’s aging workforce (21 percent) as
United States’ carbon footprint. challenging. Environmental regulations drew
one-quarter of the responses in rounding out the
The Black & Veatch 2022-2023 Electric Report top five.
— based on survey data from roughly 250 U.S.
electric sector stakeholders — details it all, Cybersecurity — sixth in 2020 before rising to
shining a light on the power sector repowering second last year — fell to eighth this year at 18
itself to bolster its reliability, resilience and percent, giving way to tightly grouped concerns
responsiveness. about reliability (21 percent) and planning and
forecasting uncertainty (19 percent) (Figure 1).
Grid Integration of Renewables,
Aging Infrastructure Top Challenges By virtually any metric, the growth of renewable
energy remains robust. In August, the U.S. Energy
With ever-widening adoption of renewable Information Administration (EIA) reported that
energy, it stood to reason that integrating green renewable sources such as wind, solar and
energy onto the grid last year surpassed aging hydropower are expected to account for 22
infrastructure as the industry’s top challenge for percent of U.S. electrical generation, up from
the first time in our reports in more than a decade. 20 percent each of the past two years. The EIA
And it was no fluke. anticipates that figure will rise to 24 percent next
year as other generation sources such as coal
Renewable integration tied aging infrastructure and nuclear are retired in some parts of the
atop the list this year, with roughly three in 10 United States.
survey responses citing either as their foremost

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | EXECUTIVE SUMMARY | 6

Figure 2
What are the top three biggest concerns for future grid development over the next three
to five years? (Select up to three)
Source: Black & Veatch

53.6% Supply chain issues for equipment

Generation mix, with fewer traditional

52.7 % base load units and more utility scale
renewable sources

Tie:

25.4% 1. Lack of qualified workers to engineer, maintain and

operate the more complex system
2. Regulatory lag in meeting the needs for system changes

Talent availability ...................................................................................................................................................... 23.7%

Ability to invest in and maintain a more resilient grid ................................................................................................. 20.5%
Lack of sufficient transmission facilities and system control assets .......................................................................... 14.3%
Increases in DER........................................................................................................................................................ 12.5%
Commodity inflation .................................................................................................................................................. 12.1%
Supporting systems/component availability .............................................................................................................. 9.4%
Lack of sufficient levels of investment to maintain and operate (including training of staff)....................................... 8.0%
Firm pricing of equipment ......................................................................................................................................... 6.7%
Other......................................................................................................................................................................... 6.7%
Available capital ........................................................................................................................................................ 5.4%
Safety for energy professionals and the public with greater dispersed resources....................................................... 3.1%

Longer term, the EIA forecasts in its 2022 53 percent — pointed to the generation mix, with
Annual Energy Outlook — widely considered the fewer traditional baseload units and more utility-
gold standard of U.S. energy projections — that scale renewable sources. That’s narrowly second
the share of renewables in the U.S. electricity only to supply chain issues for equipment (54
generation mix will more than double from last percent), a lingering headache from the global
year to 2050. This comes as state and federal COVID-19 pandemic.
policies continue to incentivize investment in
Workforce issues again are worrisome to the
green energy resources for power generation
survey takers. The lack of qualified workers to
and transportation fuels. New technologies
engineer, maintain and operate the more complex
are expected to continue driving down the cost
system came in a distant third at 25 percent — tied
of wind and solar generators, stoking their
with the regulatory lag in meeting the needs for
competitiveness in the electricity market.
system changes. Questions about the availability
More than ever, given the robust projections for of talent — made more acute by a tight job market
renewables, utilities will feel added pressure to and an ever-thinning pool of recruits who enjoy
bolster the flexibility and resilience of their grids, more career options and greater leverage for
adding battery storage and advanced inverters to various reasons — drew 24 percent, followed
accommodate the rapid transition to a greener by the ability to invest in and maintain a more
energy ecosystem. resilient grid (21 percent) (Figure 2).

Promisingly, that’s something clearly on the Yet when it comes to funding, at this crucial
sector’s radar. When asked about their top moment, there’s reason for optimism, courtesy
concerns for grid development over the next three of federal taxpayers.
to five years, more than half of respondents —

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | EXECUTIVE SUMMARY | 7

Figure 3
How do you expect new generation capacity investments to change over the
next five years in your region?
Source: Black & Veatch
% Selecting ‘More Investment Than Today’

Energy storage 54.1%

Solar (ground or roof) 37.4%
Microgrids and other DERs 20.3%
Wind (onshore) 16.4%
Hydrogen 19.2%
Wind (offshore) 16.2%
Solar (floating) 5.1%
Gas-fired / LNG to power 8.9%
Nuclear 11.6%
Geothermal 4.7%
Coal-fired 0.5%

Uncle Sam’s Help Spurs Opportunity generation capacity over the next five years in
their regions. More than half — 54 percent — cited
Deep worries about the resilience of the U.S. grid, energy storage, outdistancing solar (37 percent),
and the imperative to dramatically modernize microgrids and other distributed energy resources
it to bring about climate-resilient infrastructure (20 percent), onshore wind (16 percent) and
while accommodating ever-growing charging hydrogen (19 percent), which has emerged as
needs of electric vehicles, have become a Capitol a rising star in tomorrow’s energy ecosystem.
Hill priority. Federal lawmakers are aware of the Nuclear power — now accounting for one-fifth of
enormous price tag that such long-overdue grid the nation’s electricity supply — drew 12 percent of
upgrades carry, and they have responded with a responses amid renewed attention for its potential
generational influx of funding and, by extension, in helping reduce greenhouse gas emissions
optimism. blamed for global warming and extreme weather
events such as floods and wildfires (Figure 3).
With taxpayer help already in the pipeline through
the $1.2-trillion Infrastructure Investment and Jobs
The Promise of Hydrogen
Act (IIJA) signed into law by President Joe Biden
in late 2021, the Inflation Reduction Act (IRA) When it comes to what methods utilities expect
enacted in August commits an additional $369 to include in helping meet their clean energy and
billion over the next decade to energy security and emissions reduction goals over the next decade
climate change efforts. The goal: reduce carbon and beyond, our survey showed a profound
emissions by 40 percent by 2030, though current intention to migrate to a cleaner, greener energy
investment in electric infrastructure to get there landscape.
still doesn’t match the need.
Over the next 10 years, nearly 70 percent of
Even so, survey respondents appeared forward- respondents said they planned to make traditional
looking and receptive to greener energy sources fossil-fuel generation more efficient, though that
when asked where they’ll be investing more in approach drew only 16 percent of responses

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | EXECUTIVE SUMMARY | 8

beyond that timeframe. Natural gas, favored by
three-quarters of respondents for the next 10
years, slumped to 24 percent longer term. Sixty Black & Veatch announced earlier
percent said they looked to retire fossil-fueled
generation sites by 2032.
this year that it has been chosen

Over the next decade, the energy sector expects

by Mitsubishi Power Americas and
solar (83 percent) and wind (70 percent) to help Magnum Development to provide
meet its clean energy goals or cut their emissions
and carbon output, presumably because those engineering, procurement and
options have established, matured technology and construction services for what
competitive costs. Those numbers drop to below
30 percent beyond 10 years, giving way to more will be the world’s largest industrial
deployments of hydrogen (60 percent) and battery
green hydrogen production and
energy storage — at 64 percent, the most-cited
option beyond the next decade amid expectations storage facility.
that the costs of those technologies at scale will
continue to decline, widening adoption.

At least for now, while utilities envision hydrogen With a $504-million commitment from the U.S.
as tomorrow’s transcendent energy source, the Department of Energy, the hydrogen hub initially
technology remains unproven. Still, ambitious will be designed to convert more than 220
projects underway hope to eliminate the megawatts (MW) of renewable energy daily to
uncertainty. 100 metric tons of green hydrogen that will be
stored in two sprawling salt caverns. Storing
A shining example: Black & Veatch announced
excess renewable energy as hydrogen yields a
earlier this year that it has been chosen by
long-term, long-duration energy storage solution,
Mitsubishi Power Americas and Magnum
allowing renewable energy to be deployed in times
Development to provide engineering, procurement
of highest demand, helping balance load and
and construction (EPC) services for what will
generation across time and space.
be the world’s largest industrial green hydrogen
production and storage facility. While the Utah project illustrates the promise of
tomorrow’s energy ecosystem, utilities, regulators
As the keystone of the Advanced Clean Energy
and other industry stakeholders must commit to
Storage project in Delta, Utah, the hub will be
and collaborate on forward-thinking approaches
adjacent to the Intermountain Power Agency’s
that virtually are certain to be based on cleaner,
(IPA) IPP Renewal Project and support that 840-
greener options, using new strategies, access to
MW, hydrogen-capable gas turbine combined
technology, proactive investments and aggressive
cycle power plant being built. That plant initially
planning.
will run on a blend of 30 percent green hydrogen
and 70 percent natural gas starting in 2025 before
incrementally expanding to using 100 percent
hydrogen two decades later.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | EXECUTIVE SUMMARY | 9

Money &
Politics

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | FEDERAL FUNDING | 10

Federal Funding
and the Grid:
Infusion of Investment
Stirs Opportunity

Timing is everything, and the political whipsaw Figure 4

that was the summer of 2022 highlighted this in To what extent are you counting on IIJA
Technicolor . Each year, as we consider the topics
®

(or Bipartisan Infrastructure Legislation)

and questions to be addressed in our annual Black grant funding to drive or underpin your
& Veatch Electric Report, we understand we’re investment decisions? (Select one)
capturing a moment in time in the perspectives Source: Black & Veatch

of our survey respondents. For a section focused

on the potential impact of government funding —
including the Infrastructure Investment and Jobs 55.3%
We expect funding to drive some
Act (IIJA) — on the future of the grid, our timing of our investment decisions
arguably couldn’t be worse.

How so? After weeks of careful planning, imagine

40.4%
We do not expect funding to drive
our surprise as our survey launched to reports any of our investment decisions
that the remaining clean energy elements of the
“Build Back Better” framework were dead in the 4.3 %
We expect funding to drive the
water, only to close it out a few weeks later with majority of our investment decisions
late-breaking word the Manchin-Schumer “Inflation
Reduction Act” was alive and well, ultimately
Figure 5
making its way through Congress and being
signed into law. What are the main reasons your
organizationhas not taken advantage
With that backdrop in mind, we were struck by of someof the Infrastructure Investment
several themes emerging in 2022, including that and Jobs Act (IIJA)? (Select one)
government funding though the IIJA is expected Source: Black & Veatch

to play a role in underpinning investment decisions

for nearly 60 percent of respondents. This includes Lack of awareness Programs are
of those programs too restrictive
nearly two-thirds of those serving less than
2 million customers, demonstrating a favorable
24 %
20 %

outlook on the role of federal funding in their

planning. Optimistically, given the broad financial Administratively We don’t need
too burdensome 32% 32% these
incentives targeting clean energy in the Inflation
programs
Reduction Act, and its passage through budget
16%
reconciliation, we expect these figures would
reflect even greater optimism in a follow-up survey Too complicated
(Figures 4 & 5).

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | FEDERAL FUNDING | 11

 Timing aside, when it comes to expectations Figure 7
of how and where IIJA funding for grid-related
Which factors drive the highest
projects will be prioritized, two areas — EV
uncertainty in your investment decisions?
charging infrastructure and energy storage —
(Select all that apply)
were clear winners. This is consistent with the Source: Black & Veatch
considerable efforts of the Biden Administration

75.7%
to support growth in the electrification of
transportation, highlighted by the call to deploy
500,000 charging stations nationwide. The fact
that federal funding will support the millions of 60%
EVs entering service and provide a significant
business opportunity to a market that experienced 48.6%
years of flat load growth is not lost on industry
stakeholders. Similarly, awareness of the
critical role energy storage will play in providing 20%
grid-balancing support comes as the pace of 11.4%
renewable energy deployment accelerates. Grid
resilience to climate impacts, cybersecurity and
a series of interconnected elements round out

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Figure 6

What are the top three priorities for your For as much as the electric sector seeks to decide
organization, if IIJA funding is granted? its own fate, policy and regulatory uncertainty
Source: Black & Veatch represent the greatest factors impacting decisions
to invest in electric sector infrastructure, followed
63% closely by concerns over technology time
EV charging
infrastructure 55.6%
Batteries and long-
horizons. Simply put, political decisions being
made to drive decarbonization and evolve the
duration storage regulatory compact reshape how service providers
can look at a range of capital and operational
expense planning scenarios. For example, in
29.6%
Grid resiliency to
California, the state acknowledges its need to
deploy large-scale natural gas technologies to
climate impacts ensure grid reliability, but its decision to phase out
natural gas by 2045 means these technologies are
to be taken out of service before the traditional
asset lifecycle is complete, disrupting traditional
market dynamics (Figure 7).

Grid cybersecurity 22.2%

Microgrids and distribution infrastructure 22.2%
Improved DER integration 18.5%
Other 18.5%
Reliability for underserved communities 14.8%
Fiber network communications technology 11.1%
Enhance grid physical security measures 3.7%
Digital transformation for resiliency 3.7%
Non-wired alternatives 3.7%

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | FEDERAL FUNDING | 12

One area where respondents are shedding COVID-19 pandemic, are top of mind for more than
significant insight relates to the ongoing three-quarters of 2022 respondents. This reflects
challenges the Department of Energy (DOE) the industry’s effort to ensure that breakthroughs
faces in streamlining the complex process of in clean energy will be deployed and benefit low-
securing government funding for energy projects. income communities in both urban and rural parts
Fully 35 percent of survey participants indicated of the nation.
their organization would not pursue funding due
From a funding perspective, which cannot be
to factors ranging from lack of awareness to
overlooked as typically the most challenging
overly restrictive conditions or administratively
aspect in developing next-generation infrastructure
burdensome applications.
programs, billions of dollars in investment will be
With the passage of the Inflation Reduction Act, fueled by tax credits, loan programs and direct
the DOE now has roughly $110 billion in loan investment from the American taxpayer. This
authority to support innovative clean energy, effort to modernize our grid reflects the type of
advanced transportation and tribal energy transformative, Hoover Dam-like project that will
projects. But to receive funding, the DOE must be reimagine countless sectors and decarbonize the
comfortable with a project plan that addresses U.S. economy.
everything from design through commercial
operation. The DOE’s commitment of $504
million for the Advanced Clean Energy Storage
green hydrogen production and storage project This effort to modernize our grid
in Delta, Utah, reflected their confidence in the
comprehensive framework the development
reflects the type of transformative,
partners and engineering, procurement and Hoover Dam-like project that will
construction (EPC) provider developed to meet
their standards. Working with stakeholders who reimagine countless sectors and
understand the DOE’s approval processes will decarbonize the U.S. economy.
be essential to accelerating the flow of capital to
worthy programs.

Despite the timing of our survey, we find reasons

for optimism abound throughout this report.
Efforts to address the digital and advanced
infrastructure divide, highlighted during the

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | FEDERAL FUNDING | 13

Despite New Federal Funding
for the Electric Sector,
Investment Uncertainty Lingers
With most capital investments in the power Funding from the Infrastructure Investment
sector typically measured in multi-decade and Jobs Act (IIJA), also known as the
terms, how do service providers balance the Bipartisan Infrastructure Law and signed
necessity for long-term planning and the need into law in November 2021, certainly helped
to achieve near-term goals associated with impact at least some of this investment
changing policies, decarbonization objectives decision-making by virtue of the $107
and an increasing need for resilience? billion it ultimately will provide in funding
and incentives for clean energy, power and
And with the relentless surge of renewables, electricity grid reliability projects. The more
how do U.S. electric utilities find ways to recently enacted Inflation Reduction Act (IRA)
integrate it all onto the grid — a task that — approved by Congress and signed into law
our survey of about 250 power sector in August — provides another $369 billion in
stakeholders cite for the second consecutive funding incentives for clean energy, arguably
year as their top challenge, along with aging making it the most impactful piece of energy
infrastructure? policy ever enacted in the United States.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | INVESTMENT UNCERTAINTY | 14

One example highlighting this “power of policy”: Figure 9
Prior to the passage of the IRA, our survey queried
respondents on which types of projects they
Which factors drive the highest
would prioritize if the legislation was approved.
uncertainty in your investment decisions?
Resoundingly, two of the project types featured
(Select all that apply)
Source: Black & Veatch
most prominently in the bill — electric vehicle
(EV) charging infrastructure (63 percent of
respondents) and batteries or long-duration
storage (56 percent) — topped the list (Figure 8).
75.7%
Even though our survey was completed prior to the
IRA’s enactment, it’s clear this landmark legislation
60%
will have an even greater influence and impact. 48.6%
Yet despite nearly a half-trillion dollars across both
bills in total funding intended to further catalyze
the energy transition, uncertainty among decision 20%
makers still abounds. Affordability, shifting public 11.4%
perceptions, political instability, stranded asset
risks, regulatory jurisdictional differences and

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What are the top three priorities for your
organization, if IIJA funding is granted?
Source: Black & Veatch
To wit, three-quarters of respondents said the
inability to predict future policy and regulatory
63% changes makes investment decisions difficult.
EV charging
infrastructure 55.6%
Batteries and long-
Six in 10 cited concerns about the readiness or
longevity of certain technologies as a challenge,
duration storage and nearly one-half cited lack of clarity around
funding sources as problematic (Figure 9).

29.6%
Grid resiliency to
As one respondent noted, these days it can
sometimes feel like 20-year utility resource plans
climate impacts need to be updated every two years.

Nevertheless, some broad patterns are emerging.

Grid cybersecurity 22.2%

Microgrids and distribution infrastructure 22.2%
Improved DER integration 18.5%
Other 18.5%
Reliability for underserved communities 14.8%
Fiber network communications technology 11.1%
Enhance grid physical security measures 3.7%
Digital transformation for resiliency 3.7%
Non-wired alternatives 3.7%

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | INVESTMENT UNCERTAINTY | 15

 Figure 10
Which technologies do you intend to make investments in in the near term
(one to five years), as well as beyond five years? (Select all that apply)
Source: Black & Veatch

Near term Long term

Solar 64.0% 64.2%
Wind 40.0% 46.3%
Transportation fleet electrification and/or charging infrastructure 38.7% 44.8%
Distributed energy storage 33.3% 40.3%
Conventional generation 33.3% 28.4%
Distributed energy resources management system (DERMS) 29.3% 23.9%
Hydrogen 22.7% 23.9%
Distributed generation 21.3% 22.4%
Small modular reactors 20.0% 20.9%
Advanced distribution management system (ADMS) 18.7% 17.9%
Microgrids 17.3% 17.9%
Hydrogen-fueled combustion turbines 17.3% 14.9%
Central plant efficiency or environmental upgrades 16.0% 14.9%
Fault Location Isolation and Service Restoration (FLISR) 13.3% 14.9%
Volt/VAR 9.3% 14.9%
Dynamic line ratings 8.0% 13.4%
Flexible alternating current transmission system (FACTS) 8.0% 9.0%

Over the near term — the next five years — in it in the long term. Similarly, only 9 percent
respondents are particularly bullish about solar of respondents plan to invest in small modular
and wind projects, as well as fleet electrification. reactors in the short term, but more than 22
Sixty-four percent expect to invest in solar percent expect to allocate dollars on that energy
projects, and roughly 40 percent plan to earmark source beyond five years from now.
funds for wind and/or EVs (Figure 10). These
findings appear to validate predictions by the Balanced Planning, Decisions
U.S. Energy Information Administration that Essential
solar power generation will outstrip wind power
generation by a factor of two by 2040. As the sector transforms at such a dizzying rate,
mandates and ambitious decarbonization targets
Solar, wind and EVs remain popular priorities for have brought clean energy forces to the forefront
respondents when asked to look further out into as a solution. Integrating that green energy onto
the horizon — beyond five years. But the survey the grid — and finding ways to pay for it — while
shows that other technologies not presently hardening infrastructure assets against extreme
commercially viable stand to garner more weather and other threats present some of the
investments as time passes. industry’s most-pressing challenges.
For instance, while only 13 percent of respondents Now more than ever, utilities again must balance
intend to invest in hydrogen over the next five long-term investments with an open eye on short-
years, more than 22 percent expect to invest term, emerging needs as a continuous process,
unlike previous decades of resource planning
in this industry. Perhaps by leveraging Black &
Veatch’s expertise, utilities should embrace the
importance of an early, integrated and executable
strategy that combines strategic, financial,
regulatory, technical and digital considerations.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | INVESTMENT UNCERTAINTY | 16

Decarbonization
Accelerating Decarbonization:
Investments, Trade-offs and
Technology Alternatives

Viewed a half century ago as the energy Figure 11

source of the future, hydrogen applications are
From which of the following does your
emerging as a critical and viable solution to help
organization feel the greatest pressure
companies across many sectors achieve their
to be committed to decarbonization?
decarbonization goals.
(Select one)
Source: Black & Veatch
Some proof: The world’s largest hydrogen energy
hub is under construction in Utah, with Black
& Veatch supplying its key expertise. The U.S.
Department of Energy has guaranteed a half-
Policy
makers 37.7%
billion-dollar conditional loan guarantee for that
planned green hydrogen hub meant to convert Customers
24.5%
renewable power to hydrogen, store it underground
and use it to generate power. The first customer of
that Advanced Clean Energy Storage project will
Regulators
18.9%
be the Intermountain Power Agency (IPA) —
the power supplier to Utah and Los Angeles.
Also underway at IPA is the first power plant
Investors
18.9%
conversion to 100 percent hydrogen by 2045.
and the answers may be different depending on
With that as context, we examine the role that portfolio, risk appetite and geography. But what’s
hydrogen — as well as wind, solar, natural gas and undeniable is that the industry finally has reached
batteries for storage — will play as the industry a consensus understanding that decarbonization
continues to sharpen its focus on achieving must happen — and soon.
decarbonization at scale.
Our survey of some 250 U.S. power sector
What about other sources? Where does nuclear stakeholders for Black & Veatch’s 2022-2023
fit in? And what about carbon capture? Utilities, Electric Report shows that now more than ever,
asset owners and companies across sectors are utilities are feeling significant pressure from
undertaking concerted efforts to analyze which multiple external sources — including policy
technologies and low-carbon fuels will allow them makers, customers, regulators, and investors
to achieve their emissions reduction goals, (in that order) — to get it done. (Figure 11).

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | DECARBONIZATION | 18

With the “Inflation Reduction Act” — signed into Figure 12
law Aug. 16 by President Joe Biden — and its
Do you view non-electric means of
clean energy provisions now a matter of policy,
decarbonization (e.g., low-carbon fuels,
additional funding and tax credits to allow firms to
CCUS, etc.) as complementary to your
further accelerate the pursuit of lower-carbon fuels
current electrification efforts? (Select one)
and technologies have been formalized. Source: Black & Veatch

The Biden administration’s goals are ambitious:

Get the United States to 100 percent clean
electricity by 2035, with net zero emissions by Yes No

61.1%
2050. But how do we get there?

Outlook: Renewables Rule, 38.9%

With Hydrogen the Rising Star
Electrification increasingly has been a focus to
deliver power from a range of renewable energy investment returns (Figure 12). Promisingly, that
resources and low-carbon fuel sources. That’s number has decreased from past surveys.
particularly true when considering transitioning
fleet and passenger vehicles away from the Hydrogen, as previously mentioned, is one
combustion of fossil fuels. However, substantial alternative fuel that will be an important
reforms are required to address challenges consideration as companies look across their
such as aging infrastructure and onerous portfolio, assets and trade-offs. As a leader in
interconnection queues. the hydrogen power generation industry, Black
& Veatch is bullish on its potential but also
Survey respondents view the role of electrification recognizes that adoption of the technology has
as complementary to other low-carbon fuels and not yet been demonstrated to be advantageous
technologies. However, the timeline and runway to on technical and economic bases across a wide
transition to low-carbon fuels and carbon capture spectrum of geographies. Perhaps unsurprisingly,
solutions, while under review by most companies, many survey respondents are continuing to take a
vary across different planning horizons. Roughly wait-and-see approach, with more than 41 percent
40 percent of survey respondents currently saying that hydrogen “might or might not” be a
are not incorporating non-electric means of viable means of long-duration energy storage
decarbonization as complementary to their compared to more traditional technologies. That
electrification, due to commercial viability and said, survey respondents also shared their growing

The Biden administration’s goals

are ambitious: Get the United States
to 100 percent clean electricity by
2035, with net zero emissions by
2050. But how do we get there?

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | DECARBONIZATION | 19

Figure 13
Do you view hydrogen as a
viable means of long-duration
41.3%
Might or might not
26.6%
Probably yes
energy storage in your service
territory to more traditional
technologies (e.g., batteries,
pumped hydroelectric, etc.) 1.8% 15.6%
(Select one)
Definitely not
14.7% Probably not

Source: Black & Veatch Definitely yes

excitement around hydrogen as an alternative fuel to facilitate low-carbon energy storage

and power generation, with another 41 percent saying that hydrogen will “definitely” or
“probably” become a viable alternative (Figure 13).

Respondents expect that solar (83 percent), natural gas (77 percent) and making traditional
fossil-fueled generation more efficient (69 percent) will be the top three methods for
meeting clean energy goals over the next decade. Looking further into the future beyond
10 years, however, respondents predict that batteries (51 percent), long-duration energy
storage (64 percent), hydrogen (59 percent) and renewable natural gas (31 percent) will
emerge as the leading preferred sources.

Another alternative — nuclear energy resources — represents about one-fifth of the United
States’ baseline power — and half of its current low-carbon-emissions energy strategy.
When asked which technologies they intend to invest in over the next five years, just 9
percent cited small modular reactors, well below the top choices of solar (64 percent),
wind (40 percent) and fleet electrification (39 percent). But looking beyond five years, those
modular reactors were picked by one in five respondents.

“The whole world has to lean into getting to net zero and addressing climate change,”
Energy Department Secretary Jennifer Granholm told The Associated Press in August.
“Nuclear is such a clear part of that. I meet with my counterparts from all over the world,
and everywhere people are looking to us to help them reach their goals with nuclear.”

Despite the momentum associated with the Inflation Reduction Act, significant obstacles
exist. Chief among them — in addition to the obvious cost-based concerns, cited by 28
percent of respondents — is a lack of infrastructure. In fact, more than 43 percent of
respondents see these infrastructure inadequacies as a primary barrier.

Indeed, for hydrogen to actually emerge as a scalable energy source, there must be
many places to produce, blend and store it. The same, of course, applies to renewable
natural gas.

While meaningful inertia continues to build around next-generation, low-carbon alternatives,

the timing of the deployment of these technologies is inextricably limited by the currently
slow pace of the development of the infrastructure that allows that technology to be
deployed and monetized.

These kinds of technologies are critical for meeting our aggressive decarbonization
targets. We are hopeful that new policy enacted by way of the Inflation Reduction Act and
other measures will fast-track many of these much-needed infrastructure projects.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | DECARBONIZATION | 20

 Unrelenting Climate Change Presses
Need for Grid Modernization, Resilience

Already grappling with wildfires in the West, the 28 percent — point to heat as the climatological
unceasing threat of hurricanes along the eastern event posing the biggest risk for delivering reliable
seaboard and ravaging drought in between, U.S. system operations in the next three to five years.
electric utilities seeing climate change test their Cold and ice drew 19 percent of the responses,
grids can’t escape the drumbeat of news warning followed by wildfires (14 percent) and hurricanes
that the headwinds may only worsen. (11 percent).

That latest harbinger came in August, when the But what are utilities doing long-term to harden
nonprofit First Street Foundation research group their systems against climate change? The
unveiled a peer-reviewed report suggesting an findings may be surprising, given the warnings.
“extreme heat belt” is forming, stretching from
Texas, Louisiana and the Southeast north to ‘No Silver Bullet’
Wisconsin. The corridor covering one-quarter of
the country’s land mass reportedly would affect Noting that U.S. power outages from extreme
107 million people over the next three decades, weather have doubled over the past two decades,
bringing upticks in the number of days with the the U.S. Department of Energy warned in July that
heat index — the combination of air temperature “as much of the U.S. now braces for hurricane
and humidity — above 100 degrees, challenging season, soaring temperatures and wildfires,
the electric infrastructure’s ability to keep air climate change is threatening the reliability of
conditioners running, much less withstand the our current power system. Business-as-usual
heat itself on an aging grid. planning and operations are insufficient to produce
resiliency against these threats.”
On the heels of a July that the National
Oceanographic and Atmospheric Administration “There is no silver bullet technology to guarantee a
said was the country’s third-hottest since reliable system, and every resource and system is
record-keeping began nearly 130 years ago, the at risk for failure: coal or natural gas fuel supplies
foundation’s report adds grist to the call for the can freeze, extended periods of low wind resource
U.S. power sector to ramp up their resiliency can occur, and transmission lines can fail,” the
against escalating effects of a warming climate. DOE added. “Reliability and resilience of the
system stems from a portfolio of technologies and
None of that appears lost on the U.S. electric strategies that limits exposure to common risks
industry, Black & Veatch’s 2022-2023 Electric and includes forward planning that considers the
Report finds. evolving threats from climate change, extreme
weather and other unknown sources.”
Among roughly 250 power sector stakeholders
surveyed, roughly three in 10 respondents —

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | CLIMATE CHANGE | 21

Such look-ahead approaches could and should Figure 14
start with infusing extreme climatological event
What are the top three strategies or
mitigation into long-term system strategies;
risk mitigation that you are using to
however, just one-third of survey respondents
address the impacts of climate change?
confirm they’re doing this. Twenty-eight percent
(Select top three strategies)
say they’re not including it, while four in 10 say Source: Black & Veatch
they simply don’t know. Parsing those results
shows that those who either are or are not using
climatological event mitigation as part of their
planning are close to parity — perhaps reflecting a 52.6% Add system redundancy/
alternate sources
lack of regulatory certainty about how such plans
might be received.

U.S. power utilities are keenly aware of the impact 34.7% Implement demand response
and energy efficient programs
that weather and the environment can have on
their system operations, with many even having
onsite meteorologists who prove crucial in helping
stage crews at infrastructure vulnerabilities in 31.6% Perform more aggressive
vegetation management
advance of the storm, hastening response time
when disruptions happen.
Implement freeze protection/
winterization upgrades ....................................... 27.4%
Climate Mitigation: An Abundance Invest in generation sources that
of Options are less dependent on water supply.................... 23.2%
Advanced grid control systems........................... 22.1%
Yet not planning appropriately — even aggressively Enhanced transmission and distribution
— for weather scenarios can exact a steep price. planning to the feeder level ................................ 22.1%

Case in point: The powerful, deadly winter storm in Harden distribution by increasing sectionalizing /
automation schemes .......................................... 14.7%
February 2021 that blanketed much of Texas with
Harden distribution by undergrounding
snow, ice and record low temperatures, disrupting of overhead circuits............................................ 13.7%
power to 5 million people while wreaking havoc on Harden distribution by strengthening / insulating
water service. overhead circuits ................................................ 12.6%
Encourage / develop distributed energy
Such disasters prove to be eye-openers for resources as non-wired alternatives ................... 12.6%
utilities, awakening them to extreme weather’s
consequences, the prudency of hardening their planning to prepare for potential disruptive events.
systems against it and the need to commit to the An additional 23 percent acknowledge they don’t
sizable investment to make it happen. — perhaps given that storms seldom are the same,
and it’s impossible to account for anything and
While the possible scenarios are numbingly
everything that might transpire when it comes to
countless, half of the survey’s respondents say
climate, which itself can be acutely abstract.
their utility does climate-related disaster scenario
Strategies or risk-mitigating techniques being
used to address climate change run the gamut,
according to the survey. More than half of
respondents (53 percent) report adding system
redundancy and alternate sources, followed by
those who are adopting demand response and
energy-efficient programs (35 percent), those
doing more aggressive vegetative management
(32 percent), and utilities winterizing their assets
against freezing (27 percent) (Figure 14).

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | CLIMATE CHANGE | 22

Figure 15
What are the biggest hurdles to obtaininginvestment in climate-related mitigation
measures? (Select all that apply)
Source: Black & Veatch

44.3%
32% 30.9% 30.9% 28.9%

16.5%
12.4%

Regulatory Priorities / Difficulty in Technology Supply Equipment Construction

scrutiny / internal modeling advancement chain labor
rate case buy-in future resources
approval weather
events

Making the Case for Funding,

Investment
While many electric utilities see merit in bolstering
their infrastructures’ climate resilience, getting
regulatory signoff for the often-steep price tag —
and recovering that cost from ratepayers likely to
object — keeps such projects from being viable,
no matter the utility’s commitment to it.

More than four in 10 — 44 percent — of

respondents cited regulatory scrutiny or rate
case approval as the biggest hurdle to obtaining
investment in climate-related mitigation measures, case studies and the precedence of peer utilities,
with priorities and internal buy-ins, the difficulty in though citing what others have done may hold less
modeling future weather events, and technology sway with regulators or other stakeholders in light
advancements tightly grouped around 31 percent of each utility’s varying and sometimes unique
(Figure 15). local and regional operational nuances.

When it comes to best justifying the expense Uncle Sam Steps In: A Time for
of climate change and resilience projects, it Optimism, Action
appears to be all about data. Roughly one-third
of respondents cited modeling and risk analysis The U.S. electric sector, long having wrestled
— or cost tracking to show cost recovery or with ever-aging infrastructure without adequate
system operational improvements — as the top funding to modernize it, is getting some help from
two effective ways to make a case for such federal taxpayers.
undertakings (Figure 13). One in five pointed to

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | CLIMATE CHANGE | 23

Figure 16
What are some effective ways to justify the expense of climate change/resilience
projects? (Select one)
Source: Black & Veatch

Modeling/risk analysis
32%
Cost tracking to show cost
recovery/system operational
improvements
32%
20.6%
Application of case
studies and precedence
from other owners

Demonstration of how
projects are prioritized 8.2%
Changes in insurability
2.1%
Other
5.2%
Signed into law by President Joe Biden in All of it is rooted in the premise that climate
November 2021, the $1.2-billion, bipartisan change is real, and the time to act is now.
Infrastructure Investment and Jobs Act (IIJA) Forward-thinking utilities can and should embed
earmarks $73 billion for grid upgrades, including climatic modeling into their road-mapping now,
the buildout of thousands of miles of new, resilient appreciating the mantra that “if you can’t measure
transmission lines to help expand renewable it, you can’t manage it.”
energy ostensibly meant to mitigate climate
With a myriad of climate-mitigation approaches
change. That single biggest federal investment in
at their disposal, utilities also would be wise to
power transmission in U.S. history comes at a time
rethink their old planning approaches to avoid risk,
of runaway expansion of renewables.
ensure greater resilience and prioritize
Then in August, the “Inflation Reduction Act” such projects.
became the single biggest climate investment
Granted, climate models still hold uncertainties.
commitment in U.S. history, with $369 billion over
The only thing that is clear is that weather stops
10 years devoted to climate and clean energy
for nothing and no one.
provisions. That includes some $30 billion in
grant and loan programs for electric utilities and
states to advance the transition to cleaner,
greener energy.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | CLIMATE CHANGE | 24

Amid Decarbonization Momentum,
Renewables Help Drive Electric
Utility Sustainability Plans
Second only to transportation as the biggest Left to question, at least for now, is sustainability
source of U.S. greenhouse gas emissions, the of the energy transition and what combination
nation’s electric utilities are aligning around energy of technologies will support reliable delivery of
mix adjustments sought by regulators, consumers electricity to consumers.
and shareholders to get greener by infusing more
renewables into today’s energy ecosystem. Out with the Old, In With the
Re(New)ables
In modern lexicon, that’s decarbonization. By
extension, it’s sustainability, a noble pursuit Without question, sustainability pursuits through
requiring thoughtful roadmaps of how to lower decarbonization remain top of mind in the
carbon footprints while still meeting shifting industry. More than three-quarters of respondents
customer demands, keeping costs in check and to Black & Veatch’s survey have goals involving
embracing innovation. adopting more clean energy and renewables — or
reducing carbon or greenhouse gas emissions,
Black & Veatch’s 2022-2023 Electric Report
with roughly half of them saying such aspirations
and its survey of about 250 U.S. power sector
are separate from any regulatory mandate. In other
stakeholders bring such sustainability challenges
words, they’re commendably proactive.
into focus. A glaring takeaway: as the industry
continues to wean itself of fossil fuels largely in So what energy options do they deem most
the form of coal and natural gas — accounting favored in achieving such goals over the next
for roughly 60 percent of U.S. electricity in 2020 decade, then beyond? At least until 2032,
— low-carbon energy from the wind and the sun 83 percent of respondents cited solar power,
is helping fill the void. All the while, hydrogen and 77 percent pointed to natural gas and 70 percent
battery storage are enjoying a wider spotlight for said wind energy as their top methods, followed
their promise in tomorrow’s energy mix. closely by battery energy storage (66 percent),
and combined cycle at 64 percent.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | SUSTAINABILITY | 25

 Figure 17
Which of the following methods do you expect will be included specifically to
help meet your carbon/emissions reduction and/or clean energy goals?
(Select all that apply for each timeframe)
Source: Black & Veatch

Making traditional fossil-fueled generation more efficient 68.6% 16.0%

Retiring traditional fossil-fueled generation sites 59.8% 39.5%

Hydrogen 48.0% 59.3%
Wind 69.6% 28.4%
Solar 83.3% 28.4%
Natural gas 76.5% 23.5%
Renewable natural gas 55.9% 30.9%
Combined cycle 63.7% 23.5%
Battery energy storage 65.7% 50.6%
Power purchase agreements (PPAs) 63.7% 27.2%
Long duration energy storage (LEDS) 32.4% 64.2%
Other 12.7% 18.5%
Next 10 Beyond 10

Looking past a decade from now, according to

the survey, fossil fuels are expected to continue
falling out of favor. While 69 percent said they
look to make traditional fossil-fuel generation
more efficient over the next 10 years, that number
plummets to just 16 percent after that. Natural gas
also shows a 53-point plunge during that span.
Six of 10 respondents say their game plan over
the next decade includes mothballing traditional
fossil-fueled sites (Figure 17).

Enter hydrogen and long-duration energy storage,

both evolving but rapidly trending upward.

Hydrogen, Long-Duration Storage:

Jury Still Out – For Now
Underscoring optimism about tomorrow’s cleaner
energy mix, 47 percent of respondents cited
around-the-clock firm dispatchable electricity from
renewable resources and storage — essential,
given the intermittency of solar and wind power —
as the trend they consider most exciting.
Forty percent pointed to long-term energy storage

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | SUSTAINABILITY | 26

 Figure 18 in the form of hydrogen, followed closely by
funding availability for long-term energy storage
Do you view hydrogen as a viable
projects (39 percent) and expansion of fuel cell
means of long-duration energy storage
use — e.g. hydrogen fuel cells — at 36 percent.
in your service territory to more
traditional technologies (e.g., batteries, Like hydrogen, long-duration energy storage
pumped hydroelectric, etc.) (Select one) remains unproven, tamping down commitments
Source: Black & Veatch
to either for now (Figure 18).

But in the western United States, an ambitious

effort now underway could sort it all out, offering

41.3%
Might or might not
26.6%
Probably yes
a peek at what tomorrow’s energy picture may
look like.

Earlier this year, Black & Veatch announced it

has been chosen by Mitsubishi Power Americas
1.8% 15.6% and Magnum Development — co-developers
Definitely not
14.7% Probably not of what will be the world’s largest industrial
green hydrogen production and storage facility
Definitely yes
— to provide engineering, procurement and
construction (EPC) services for that Advanced
Clean Energy Storage project in Delta, Utah.

That new hydrogen hub initially will be designed

to convert more than 220 megawatts (MW) of
renewable energy daily to 100 metric tons of green
hydrogen that will be stored in two sprawling salt
caverns. Storing excess renewable energy as
hydrogen yields a long-term, long-duration energy
storage solution, allowing renewable energy to be
deployed in times of highest demand.

That hub will be adjacent to the Intermountain

Power Agency’s (IPA) IPP Renewed Project and
support that 840-MW, hydrogen-capable gas
turbine combined cycle power plant being built.
That plant initially will run on a blend of 30 percent
green hydrogen and 70 percent natural gas
starting in 2025, then incrementally expand
to using 100 percent hydrogen by 2045.

Sustainability Help, from Uncle Sam

Long having lamented the lack of funding for
infrastructure upgrades that would bolster
sustainability, U.S. utilities are getting welcomed
help from federal taxpayers. The “Inflation
Reduction Act” — the most sweeping climate
measure in U.S. history — includes $369 billion in
climate- and energy-related funding over 10 years,
with huge incentives to ramp up carbon-capture

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | SUSTAINABILITY | 27

Under the IIJA, $73 billion — the
single biggest federal investment
in electricity grids in U.S. history
— would be committed to grid
upgrades, including thousands
of miles of new, resilient
transmission lines to help
expand renewable energy.

sites, urge green hydrogen production and boost

U.S. production of solar panels, wind turbines and
next-generation batteries.

This spending measure follows the bipartisan,

$1.2-trillion infrastructure plan signed into law
in November 2020, channeling tens of billions
of tax dollars into what the White House called
“our aging electric grid (that) needs urgent
modernization,” with wider adoption of renewable
energy at its core. Under that legislation, $73
billion — the single biggest federal investment
in electricity grids in U.S. history — would be
committed to grid upgrades, including thousands
of miles of new, resilient transmission lines to
help expand renewable energy. The measure
also will invest in research and development for
advanced transmission and electricity distribution
technologies while promoting smart grid solutions
that deliver flexibility and resilience — along with
sustainability.

Electric utilities would be well-served pursuing any

of that funding independently — or by enlisting
guidance from a critical human infrastructure
expert such as Black & Veatch — to further
demonstrate that their understanding that
decarbonization and sustainability is critical
to them. Sitting idle means tragically missing
out on a generational opportunity in a rapidly
transforming energy landscape propelled by
renewables and battery storage unimaginable
just a decade ago.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | SUSTAINABILITY | 28

 Clean Energy Trends:
Renewables, Battery
Storage Lead the Way

As decarbonizing takes a deepening root around Figure 19

the globe, clean energy solutions such as wind
What are the top three most challenging
and solar power complemented by battery storage
issues facing the electric industry in your
quickly are becoming more of a fixture in today’s
region today? (Select up to three)
energy ecosystem. That landscape cannot Source: Black & Veatch
continue to evolve without the help of utilities,
and it’s crucial for them and their stakeholders to
understand clean energy trends to reach a 28.7% Renewable integration
net-zero future.

Decarbonization will require integrating more

renewable energy onto the grid, which has recently 28.7% Aging infrastructure
become a significant concern for utilities. In
fact, in our 2021 Electric Report, utilities ranked
renewable integration as their top challenge —
above aging infrastructure — for the first time ever. 25.3% Environmental regulations

Again, that parity remains this year. In our survey Lack of skilled workforce.................................... 21.9%
of about 250 electric industry stakeholders for Aging workforce ................................................. 21.1%
Black & Veatch’s 2022-2023 Electric Report, Reliability ........................................................... 20.7%
Planning / forecasting uncertainty...................... 19.4%
roughly one in three respondents (29 percent) Cybersecurity..................................................... 17.7%
ranked renewable energy integration as their top Distribution system upgrades
challenge, tied with aging infrastructure. While and modernization.............................................. 16.9%
Economic regulation (i.e., rates) ......................... 15.6%
renewable integration remains in the No. 1 spot,
Distributed Energy Resources
fewer respondents are concerned about it than in (DER) integration ................................................ 13.1%
last year’s report, where a whopping 34 percent Resiliency........................................................... 13.1%
voted for it (Figure 19). Energy Storage ................................................... 12.2%
Grid Stability ...................................................... 11.0%
Uncertainty of investment .................................. 10.1%
The lowered percentage from last year may
Grid congestion .................................................. 5.9%
indicate that there is an increasing migration to an Market structure................................................. 5.5%
Access to capital investment .............................. 3.0%

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | CLEAN ENERGY TRENDS | 29

awareness of renewables among utilities — Upgrading the Power Grid
a promising sign for the future of green energy.
While the future of renewable energy continues to
However, it should be mentioned that last year, gain more acceptance among utilities, the power
the 2021 Electric Report survey was released grid needs a major upgrade to accommodate the
last November around the time of hope — albeit energy transition. And such grid modernization
waning — that the massive “Build Back Better” certainly will present its own challenges.
spending plan targeting physical infrastructure
improvements would get through Congress, and According to survey respondents, the top two
responses may have reflected optimism. At that concerns for future grid development over the
time, renewables were top of mind for utilities. By next three to five years are supply chain issues
comparison, this year’s report survey was released (54 percent) and generation mix (53 percent).
before a far narrower version of Build Back Better These concerns aren’t minor, considering that their
was hammered out and eventually signed into percentages nearly double any other option on the
law by President Joe Biden in August, perhaps list. With the supply chain crisis ongoing at the
negatively skewing survey responses slightly. time of this report, that number isn’t too surprising.

Nevertheless, the numbers still show utilities’ Planning for Decarbonization

growing emphasis on renewable generation
capacity. Across the country, utilities must start strategizing
about their decarbonization goals. According to
our respondents across the Northeast, Midwest,
South and West regions of the United States, the
percentage of utilities with a carbon reduction
goal apart from any mandate was on average
56 percent. Among respondents with a carbon-
reducing blueprint, 41 percent consider it well-
defined to meet their goals.

When it comes to mapping out investment in

new generation capacity over the next five years,

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | CLEAN ENERGY TRENDS | 30

solar, microgrids and energy storage are leading
the charge in what respondents say they’ll spend
much more or somewhat more on. These results
aren’t too shocking considering how well solar
and battery energy storage work together. Some
60 percent of respondents expect some increase
in hydrogen-related investment over the next five
years. (Figure 20).

Investing in Clean Energy

When respondents were asked which technologies
they intend to invest in the near-term (one to five
years) and the long-term (more than five years),
solar and wind both remained atop the heap in
both categories — unsurprising, given their status
as relatively established technologies. Looking
ahead, hydrogen climbed significantly from just

Figure 20
For each of the following categories, how do you expect new energy generation
capacity investments to change over the next five years in your region?
Source: Black & Veatch

1.5%
Coal-fired 0.5 %
15.9% 22.9% 59.2%

Gas-fired / LNG to power 8.9% 32.7% 38.1% 15.3% 5%

Solar (ground mount or rooftop) 37.4% 38.8% 19.4% 2.4% 1.9%

Solar (floating) 5.1% 29.7% 47.7% 8.7% 8.7%

Wind (onshore) 16.4% 35.3% 35.8% 7.5% 5%

Wind (offshore) 16.2% 25.9% 38.6% 7.6% 11.7%

Energy storage 54.1% 34.1% 9.3% 2% .5%

Microgrids and other DERs 20.3% 50.3% 24.9% 2.5% 2%

Nuclear 11.6% 22.6% 47.2% 9% 9.5%

Geothermal 4.7% 17.1% 60.6% 7.8% 9.8%

Hydrogen 19.2% 40.9% 31.3% 5.1% 3.5%

Coal-fired with CCUS 2.5% 13.9% 32.2% 18.3% 33.2%

Gas-fired/LNG to Power with CCUS 10.9% 31.3% 41.8% 9% 7%

Much more Somewhat more About the same Somewhat less Much less investment
investment than today investment than today investment as today investment than today than today

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | CLEAN ENERGY TRENDS | 31

 14 percent in the short term and 22 percent past Energy Storage in Power
five years, while distributed energy storage rose to
40 percent, from 33 percent. (Figure 21). As renewable solar and wind developments
continue their rapid growth across the country,
Longer term — looking out the next five years energy storage increasingly is viewed as a critical
to a decade in actual investment spending component to decarbonization, given that the
— respondents appear to be prioritizing big intermittency of renewables means there are times
investments (those of more than $10 million) in — days or even weeks — when there won’t be the
conventional generation while increasingly aligning appropriate amount of generation throughout the
behind energy from wind, the sun, hydrogen and day to satisfy load needs. While at first glance
small modular nuclear reactors. it may appear that the two key energy storage
As is the case for many technologies, they often technologies — battery energy storage systems
start out slow and pick up momentum at the drop (BESS) and hydrogen — are in competition, the
of a hat. A few decades ago, light-emitting diodes two technologies in important respects are
(LED) took a room full of equipment and tens of complementary to each other, particularly suited to
thousands of dollars to get a fraction of a lumen of addressing hourly and daily shifting versus longer
light. Now people can buy a string of 100 for a dollar duration and seasonal shifting of energy supplies,
during Christmas time. respectively. The two can be used in tandem to
maximize the value of electrons from green energy.
The same can be said for clean energy technology,
where there’s a consistent positivity surrounding The investment tax credits and production tax
renewables that wasn’t there just 20 years ago. That credits made available to BESS and clean hydrogen
appears true about hydrogen, a technology prone to in the Inflation Reduction Act would be significant
skepticism today but poised to become the next big as it would materially reduce the cost of both
trend a decade or 15 years from now. energy storage technologies and resultingly improve
the resiliency of the grid. Investment spending in
The fact of the matter is, decarbonization is on the both technologies could continue to increase in
minds of nearly every utility right now. And while utilities’ planning budget.
utilities may be adopting new technologies at
different rates, the enthusiasm towards renewable
energy is ever-present — and building.

Figure 21
Which technologies do you intend to make investments in in the near term (one to five
years), as well as beyond five years? (Select all that apply)
Source: Black & Veatch
Near term Long term
Solar 64.0% 64.2%
Wind 40.0% 46.3%
Transportation fleet electrification and/or charging infrastructure 38.7% 44.8%
Distributed energy storage 33.3% 40.3%
Conventional generation 33.3% 28.4%
Distributed energy resources management system (DERMS) 29.3% 23.9%
Hydrogen 22.7% 23.9%
Distributed generation 21.3% 22.4%
Small modular reactors 20.0% 20.9%
Advanced distribution management system (ADMS) 18.7% 17.9%
Microgrids 17.3% 17.9%
Hydrogen-fueled combustion turbines 17.3% 14.9%
Central plant efficiency or environmental upgrades 16.0% 14.9%
Fault Location Isolation and Service Restoration (FLISR) 13.3% 14.9%
Volt/VAR 9.3% 14.9%
Dynamic line ratings 8.0% 13.4%
Flexible alternating current transmission system (FACTS) 8.0% 9.0%

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | CLEAN ENERGY TRENDS | 32

 With Momentum from
Federal Funding,
Vehicle Electrification
Must Stoke Utility
Planning, Investments

It’s no secret that transportation is the leading source of greenhouse

gases (GHG) in the United States. Burning fossil fuels such as
gasoline and diesel releases carbon dioxide, trapping heat in
the atmosphere and causing global warming. From increases in
everything from the frequency and severity of wildfires, droughts and
other severe weather events, the fallout is inescapable and alarming.

As the world pushes to decarbonize, electric vehicles (EVs) are

As the world pushes to proving ever more crucial in helping mitigate climate change. And
utilities must answer the call in delivering the energy needed for that
decarbonize, electric evolving transportation mix turning cleaner and greener by the day.
vehicles are proving
More electric vehicles are on the road, and companies such as
ever more crucial Amazon and FedEx are taking action by electrifying their large
in helping mitigate vehicle fleets. On the funding side, the Infrastructure Investment
and Jobs Act (IIJA) included significant funding to support and
climate change. And incentivize the buildout of electric vehicle charging infrastructure,
utilities must answer and the newly passed “Inflation Reduction Act” expands tax credits
for the purchase of new electric vehicles.
the call in delivering
the energy needed Black & Veatch’s 2022-2023 Electric Report — based on expert
analysis of a survey of about 250 U.S. electric sector stakeholders
for that evolving — illustrates that vehicle and fleet electrification is top of mind.
transportation mix However, more education among utilities and clarity around
budgeting and planning are necessary pieces to the puzzle that,
turning cleaner and when complete, potentially can make significant advances to
greener by the day. the industry.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | VEHICLE ELECTRIFICATION | 33

New Funds Pave the Way for The United States is at a tipping point of EV
Lasting Change adoption, meaning there’s a huge opportunity for
utilities to be the Swiss army knife the country
Utilities understand that loads are shifting away needs to meet the Biden Administration’s goal
from fossil fuels towards cleaner forms of energy, that half of all new U.S. vehicle sales be zero-
and the move to electric vehicles isn’t just a trend emission by 2030. Electric vehicle and fleet
or a key part of climate change mitigation; it’s a charging infrastructure is imperative to achieving
durable market that must be prioritized to remain that goal, and with billions of dollars in available
relevant and competitive. funding, utilities want their fair share.

Figure 22 When asked about the top three priorities for

What are the top three priorities for your their organization if IIJA funding is granted, EV
organization, if IIJA funding is granted? charging infrastructure received the highest
(Select three options) marks, with 63 percent of respondents noting
Source: Black & Veatch that it would be a top priority (Figure 22). Couple
that sentiment with the fact that 39 percent

63% of respondents intend to make investments

55.6%
in transportation fleet electrification and/or
EV charging
infrastructure charging infrastructure in the next one to five
Batteries and long-
duration storage
years, and it’s clear this issue is top of mind for
utilities, and planning is underway.

When asked how much money their organization

29.6 %
Grid resiliency to
is planning to invest in transportation and fleet
electrification and/or charging infrastructure
climate impacts
over the next one to five years, 16 percent said
they expect to spend more than $10 million.
Other investment amounts range from less than
$500,000 (24 percent), $500,000 to $1 million
(20 percent), $1 million to $5 million (16 percent),
and $5 million to $10 million (4 percent). One in
five respondents reported they aren’t sure how
Grid cybersecurity 22.2%
Microgrids and distribution infrastructure 22.2% much money they’ll devote to that.
Improved DER integration 18.5%
Other 18.5% While the funds are available and money is
Reliability for underserved communities 14.8% earmarked for electrification and charging
Fiber network communications technology 11.1% infrastructure, questions remain about how best
Enhance grid physical security measures 3.7%
to budget that money as well as to accurately
Digital transformation for resiliency 3.7%
Non-wired alternatives 3.7% forecast the load requirements coming down
the pike.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | VEHICLE ELECTRIFICATION | 34

The Need for Education, Effective This begs the question: if utilities are planning
Forecasting to invest in this area, as the survey results
clearly illustrate, why aren’t they planning
While the survey demonstrates robust plans for to accommodate the increased demand for
investment in vehicle and fleet electrification electricity that these investments in EV charging
and required charging infrastructure, the data buildout will inevitably require? What might
turns murky when respondents weighed in about explain this disconnect?
how much of their forecasting for future load
is integrated into the expectation for vehicle One answer is that it’s hard to predict the
electrification. More than four in 10 respondents — future. Load forecasters have a difficult job, and
44 percent — replied that at least some of their predictions can drive billions of dollars in
their forecasting included vehicle electrification investments and real changes to electricity rates.
and fleets, while 22 percent said none of Estimate too high, and a utility has stranded
their forecasting involves vehicle and assets and unnecessarily high rates. Estimate too
fleet electrification. Twenty-four percent said low, and the utility risks not having enough power
they don’t know (Figure 23). to serve its customers. Since the 2008 financial
crisis, the usual link between growth in the gross
domestic product (GDP) and electricity demand
Figure 23 has decoupled. This means that even though the
How much has your forecasting for future economy is growing, a utility shouldn’t necessarily
load integrated the expectation for the assume that this will result in higher electricity
vehicle electrification, including fleet? demand as our economy has de-industrialized and
(Select one) things have become more efficient. The period of
Source: Black & Veatch flat load growth has made load forecasters more
cautious when forecasting future load.

44.2% Another answer may be that work is needed to

educate the utility sector on effective planning
and budgeting as the adoption of EVs continues
to pick up speed. Consider this: Just 5 percent of
all new car sales today in the United States are
electric; in five years, that number is only expected
22.1% 24% to increase, especially considering the expanded
tax credits for EVs now available through the
recently passed “Inflation Reduction Act.” Similarly,
the number of electric fleets also is expected to
9.6% rise, as is the electrification of heavy machinery
such as forklifts and other equipment. According
to the survey, three-quarters of respondents
reported an increase in EV charging site requests,
spanning both Level 2 (38 percent increase)
Some None Majority Don’t and Level 3 (38 percent increase) charging
know
sites requests.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | VEHICLE ELECTRIFICATION | 35

Black & Veatch recently has completed an important project
for the strategic planning group at San Diego Gas & Electric
(SDG&E). SDG&E set out to establish the most viable
pathways for economy-wide decarbonization, with Black &
Veatch providing technical advising, subject matter expertise
and economic and power market modelling services to the
utility. This work was published in “The Path to Net-Zero: A
Decarbonization Roadmap for California,” a comprehensive
decarbonization blueprint to meet the state’s goal of
achieving carbon neutrality by 2045. The work showed that
electric consumption is expected to double as the economy
decarbonizes, and the majority of that additional demand
will come from electric vehicles. The industry can’t ignore
the increase in demand in the very near term, which is only
expected to grow. Growth in electrification also means
increases of the load on the grid, making it imperative that
utilities properly forecast the load requirements of those
vehicles. The inescapable fact is that that the rising number
of EVs and fleets expected to be on the road in coming years
won’t be sustainable without proper charging infrastructure.

No Time to be Passive
With President Joe Biden having signed an executive order
calling for EVs to account for half of all U.S. auto sales by the
end of this decade — and automakers making EVs a bigger
part of their inventories in a world increasingly embracing
decarbonization — it’s incumbent on electric utilities to
respond. Many are, reflected in the survey findings showing
attentiveness to the need to invest in and prioritize the
required infrastructure.

But more education around the need for effective planning

and investment remains essential, especially considering that
only half of respondents to Black & Veatch’s survey say they’re
ready to enable new EV loads over the next year. Breaking that
down further, 22 percent say they’re ready now, 15 percent say
they’ll be good to go in less than six months, and 14 percent
saying they’ll be ready in six months to a year.

When utilities meld that confidence in readiness with more

education and effective, thoughtful planning, the vehicle and
fleet electrification sector will be on track to make lasting,
sustainable change.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | VEHICLE ELECTRIFICATION | 36

Energy Storage, Now
(But Not Necessarily Here)
In what is a first in the more than 15-year history of cannot be maintained without more energy
Black & Veatch’s annual electric report, we begin storage on the power grid. In fact, more than eight
this preview section with a disclaimer: How were in 10 respondents — 84 percent — anticipate a
we supposed to know that the most significant greater risk of load shedding, a last resort for grid
energy policy legislation in generations would go operators, as renewable, variable resources play a
from “not happening” to “let’s wrap it up before the larger role in power production (Figure 24).
August recess” by Congress, right in the midst of
The IRA’s $369 billion will accelerate the clean
our survey period?
energy transition with billions in dedicated funds
Besides the obvious “it’s not our fault” elements, for energy storage research and development.
we note this for a specific purpose: While many
of this year’s responses regarding energy storage Figure 24
reflect a positive sector outlook, we feel our data
likely reflects some negative bias later mitigated
As the system becomes more reliant on
by the August signing of the Inflation Reduction
renewable, variable resources, do you see
Act (IRA).
increasing risk of more load shedding?
(Select one)
The IRA package is critical as electric grids Source: Black & Veatch

across the United States creak under the strain of

excessive heat, droughts, aging infrastructure and
the challenges of renewable integration. Across 54.7% Definitely yes

respondent groups, energy storage is viewed as

having a critical role in supporting decarbonization 29.2% Probably yes

plans by boosting grid flexibility and reliability,

particularly as service providers work to address 11.3 % Might or might not
the issue of renewable generation variability.
With greater amounts of generation that varies 4.7 % Probably not
as its resource varies, and with fewer traditional
baseload assets that have a predictable resource
supply, a consensus is emerging that reliability

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | ENERGY STORAGE | 37

Figure 25 Yes, but no more than 1 week 24.8%
Do you see a need for
medium- and long-term
Yes, but no more than 1 day 21.1%
energy storage? Yes, for longer than 1 week 17.4%
(Select one)
Source: Black & Veatch Yes, but no more than 12 hours 13.8%
Yes, but no more than 8 hours 11.9%
Not sure 9.2%
No 1.8%

This is key, given that 89 percent of respondents methods to be deployed over the time horizon, it
indicate a need for medium- and long-term energy seems only logical that responses to the question
storage, though some disagreement remains on would have reflected more optimism for storage
the definition of medium- and long-term storage. had the IRA been passed earlier (Figure 26).
With eight hours as the current benchmark for
Black & Veatch’s experts did find it interesting that
long-term storage, more than 40 percent see a
optimism for long-duration energy storage was
need for capacity of up to — or longer than —
the leading method to achieve carbon reductions
one week (Figure 25).
beyond 10 years. This likely reflects the impact of
To address clean energy pledges within the next the technology curve at work as storage is both
10 years, electricity service providers ranked solar a mature technology for electrochemical battery
generation No. 1, with new natural gas generation technology and one in the early stages of its
a close second and retirements of traditional development for thermal/mechanical/chemical
fossil assets also among the top four. While the storage technologies. For example, just 10 years
respondents view storage among the most critical ago, the 2013 EPRI Energy Storage handbook did

Figure 26
Which of the following methods do you expect will be included specifically to help
meet your carbon/emissions reduction and/or clean energy goals? (Select all that apply
for each timeframe, by year)
Source: Black & Veatch

Top 5 in Next 10 Years 2022 2021

83.3% 86.2
%

75.2% 76.5%
68.6 % 72.5% 69.6% 67.9%
65.7% 68.8%

Solar Retiring Battery Natural gas Wind

traditional energy storage
fossil-fueled
generation sites

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | ENERGY STORAGE | 38

not include lithium-ion battery technologies as Figure 27
(then yet) capable of providing utility scale storage
What trends are you most excited about?
solutions; today, gigawatts of battery storage have
(Select all that apply)
been deployed nationwide, with the vast majority Source: Black & Veatch
utilizing lithium ion battery technology.

47.1 %
Further reflecting the overall optimism for 24/7/365 firm dispatchable
power from renewable
battery storage is the growing trend in “solar resources and storage
plus” — hybrid solar projects that incorporate
energy storage from the outset of their design. In
2021, these projects surpassed pure play solar
generation development in terms of the number of
40.4% Long-term energy storage
in the form of hydrogen

interconnection queue requests, a trend likely to

continue in 2022 and beyond.
38.5%
Funding availability for
long-term energy storage projects
We also note that supply chain woes have not
hit the battery storage field as badly as that for
certain components of the energy value chain, 35.6% Expansion of fuel cell use
(e.g. hydrogen fuel cells)
in particular solar panels and transformers.
While no technology combining commodities
and semiconductors can emerge unscathed in a 26% Commercialization of carbon capture,
utilization and storage
period of high inflation, batteries have been fairly
insulated to this point. From Black & Veatch’s
16.3%
Commercialization of bi-facial
perspective, nearly one-half of the price increases
solar collectors
that our experts have observed are tied to
increases in the cost of shipping versus other
cost factors in the supply chain. the load varying, so are the generation sources,
thereby creating levels of complexity unmatched
Without question, the disruption shaping the
in the industry’s history.
future of the electric sector is accelerating, and
management of the grid increasingly mirrors Yet it is also an exciting time to be participating
the delicate balancing act of circus high-wire in the operation of the world’s most complex
performers. For a century, the traditional grid machine. When asked to identify the trends survey
operated like one performer walking the wire, or participants were most excited about, 24/7/365
at most two performers that cross by each other. dispatchable power from renewable resources
Yet as renewable generation expands, not only is with storage was selected by nearly half. Inherent
in this response is the belief that storage meeting
the requirements for both scale and capacity will
be available to help balance and shift electricity
generation and load (Figure 27).

As we look ahead, we see a bright future for the

energy storage market for the power grid and
new opportunities to leverage technology to
decarbonize the U.S. economy in commercial
and the industrial, manufacturing and process
industries sectors.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | ENERGY STORAGE | 39

The State of
Cybersecurity
Technology in the
Electric Sector

Because of the highly dynamic technology and Figure 28

threat environment, cybersecurity has its tentacles
Which cyber threats is your organization
in nearly every aspect of the electric industry,
most concerned about?
from assessing ongoing threats to identifying and
(Select all that apply)
mitigating system vulnerabilities, commissioning Source: Black & Veatch
new devices that monitor air quality, and securing
weather stations. Phishing 78.6%
Ransomware
As if that weren’t enough, cybersecurity experts in
Hacking
67.1%
the electric sphere are responsible for maintaining
Data leakage 64.3%
compliance with the North American Electric
Supply chain 38.6%
Reliability Corporation Critical Infrastructure
Protection (NERC-CIP) standards.
vulnerabilities 32.9%
DDoS (Distributed
25.7%
Denial of Service)
Long story short, the industry’s cybersecurity
Insider threats
18.6%
professionals have their hands full. But Black
Account takeover 14.3%
& Veatch’s 2022-2023 Electric Report — expert
analysis of a survey of about 250 U.S. electric
ACH Fraud 12.9%
sector stakeholders — illustrates that these
professionals are rising to the occasion, the last cybersecurity assessment was done in
performing regular cybersecurity assessments, 2022 or is currently being conducted.
showing awareness of the latest threats, and
Cybersecurity assessments are not a one-size-
exploring new technologies and platforms to
fits-all endeavor. But this high number of positive
modernize their organizations.
responses — coupled with that 46 percent of
respondents are in the implementation phase
Responding to the threat landscape
of their security plans — demonstrates that
When asked about the top challenges facing the cybersecurity professionals are cognizant of and
electric industry today, a relatively low number responding to the current threat landscape.
(18 percent) of respondents selected
Phishing (79 percent) and ransomware
cybersecurity — a promising sign that the majority
(67 percent) took the top two spots as the
of respondents feel they could have cybersecurity
cyber threats drawing the most concern among
under control. This might be due in part to the high
respondents (Figure 28).
number (45 percent) of respondents stating that
BLACK & VEATCH 2022-2023 ELECTRIC REPORT | CYBERSECURITY | 40
Figure 29
Data Acquisition (SCADA) in the cloud, as well as
How confident are you in your utility’s using the cloud for operational technology (OT)
ability to recover from a cybersecurity environments.
attack? (Select one)
Source: Black & Veatch When it comes to modernization, electric sector
cybersecurity professionals also have their
46.6% sights on the adoption of emerging technologies.
One-third — 32 percent — reported that they are
considering the use of the internet of things
(IoT) — a somewhat high number considering
27.4% IoT technologies are vastly different from the
24.7 %
traditional, regimented structure of the electric
utility. On a similar note, 47 percent are considering
the adoption of software-based platforms for
protection equipment. Additionally, the Department
1.4% of Energy recently published the National Cyber-
Somewhat Neither Extremely Somewhat Informed Engineering (CIE) Strategy to develop
confident confident confident unconfident reference architecture for electric energy OT, which
nor
unconfident

When asked to assess their confidence in Figure 30

recovering from a cyberattack, just one-quarter
reported they were “extremely confident,” with
What technologies are you considering
47 percent “somewhat confident.” (Figure 29).
to modernize your organization?
Low confidence levels may point back to maturing
(Select all that apply)
Source: Black & Veatch
incident response plans using a variety of
incidents, including the top cited concerns about
58.3%
Cloud environments
phishing and ransomware. for applicable services

58.3%
Utilization of asset
Embracing digital transformation management platforms

It’s no secret that cloud computing is here to Software-based platforms

for protection equipment 46.7%
stay. Organizations of all sizes now understand
that cloud technology allows for increased Utilization of grid
agility, collaboration and ability to scale, among management systems 41.7%
a host of other advantages. The electric industry
Utilization of IoT
has taken note; 58 percent of respondents are (Internet of Things) devices 31.7%
considering the adoption of cloud environments to
modernize their organization (Figure 30). However, Utilization of geospatial
information systems 30%
questions remain about Supervisory Control and

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | CYBERSECURITY | 41

has the potential to be a game changer With new technology comes new
for industrial control system cybersecurity in
the electric sector. vulnerabilities, and while the sector
While it’s clear that utilities are making moves to has security plans and regular
modernize, 72 percent of respondents don’t know assessments in place to mitigate
if their utility is aware of and considering a Zero
Trust architecture. Given that Zero Trust is still those threats, confidence in
an emerging security framework, the uncertainty
surmounting attacks remains low.
here may point to the fact that 21 percent of
respondents listed an aging workforce as one of
their top concerns. Many utility professionals who
have been in the industry for decades and are
nearing retirement simply may not know what
Zero Trust is or how to implement it, illustrating
the potential for Zero Trust architecture to be
adopted more broadly as the sector continues
its modernization.

Looking ahead
As a traditionally regimented industry, the electric
sector is showing signs of a digital transformation.
Cloud adoption and emerging technologies such
as IoT are entering the industry at high rates. With
new technology comes new vulnerabilities, and
while the sector has security plans and regular
assessments in place to mitigate those threats,
confidence in surmounting attacks remains low.

Questions remain about SCADA in the cloud,

Zero Trust adoption and the regulatory
environment. But opportunity abounds for
those who continue to embrace technology
in safeguarding their systems and ultimately
transforming the electric sector.

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | CYBERSECURITY | 42

About the Authors
Alex Bettencourt is a member of Black & Jonathan Cristiani is a Black & Veatch
Veatch Global Advisory Consulting group technology manager and clean fuels specialist
and leads the advanced transportation and with nearly two decades of experience in
decarbonization practices globally for the a host of renewable and alternative energy
company. He and his team are working with technologies. His duties include low-carbon
many leading organizations around the world fuel technology expertise, front-end project
looking to meet their decarbonization goals, development/consulting, and engineering/
including through the electrification of their project management support. Cristiani has
transportation fleets. Before coming to Black significant experience with the conversion of
& Veatch, he led grid-modernization efforts of bio-based feedstocks into energy products
leading utilities around North America. as well as with the production, storage, and
utilization of hydrogen for numerous end
Shibu Cherian is the global chief information use applications.
security officer at Black & Veatch. He leads
all aspects of the cybersecurity management Kristie Deiuliis is a managing director at Black
program and strategy aligned to industry- & Veatch, leading decarbonization strategy
leading controls and regulatory best practices and planning initiatives. With more than 25
to ensure that confidentiality, integrity years in the energy industry, Deiuliis leads
and availability of critical systems are strategic initiatives, driving the development of
implemented and maintained to enable the all economic, policy, technology, and feasibility
business to deliver secure solutions to build assessments for a broad range of global
and protect critical human infrastructure. top-tier clients. Her experience spans energy
The cybersecurity program aims to provide industry domains, including wholesale and
standardized procedures and capabilities retail (regulated and competitive) markets,
that address enterprise security needs with distributed energy resources, market entry and
sustainable cybersecurity controls to detect expansion business cases, and investment
and defend the infrastructure and business strategies for companies seeking to pivot or
operations against cyber-attack. Cherian has accelerate specific goals.
more than 20 years of global experience in
Nigam Desai is a managing director and
cybersecurity strategy and risk management
project management professional in
and has led in the areas of cybersecurity
cybersecurity at Black & Veatch, working
program management, security architecture,
with utility companies on performance
security engineering, cloud enablement, cyber
improvement, project and program
operations and risk management in various
management, IT software integration and
industries, including financial services, retail
solution architecture projects. Desai has
and ecommerce, consulting, healthcare and
a very good understanding of the entire
telecommunication.
transmission and distribution ecosystem

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | ABOUT THE AUTHORS | 43

in the utilities space and provides his a comprehensive long-term projection of
expertise in a myriad of projects. He has North America’s energy market outlook that
worked on successful implementations of incorporates technology and policy trends
advanced metering infrastructure (AMI), grid across the energy industry.
modernization (grid mod), product integrations
David Hulinsky is the private networks leader
and implementations, and implementing
in Black & Veatch’s energy and process
cyber guidelines for transmission lines.
industries business. He previously served
He has 30 years working on IT projects in
as the company’s director and business
India and the United States and has been in
unit lead for telecom, automation and
the utilities space for 24 years working for
distribution services for electric utilities.
meter manufacturing and consulting firms.
Hulinsky has more than 20 years of experience
He has knowledge and experience in meter
successfully developing and leading some
installations and field operations, integration
of Black & Veatch’s largest utility turnkey
of AMI, grid mod and related applications,
communications and smart grid EPC projects
business and IT SDLC projects, cybersecurity,
for leading utilities.
consulting and leading teams across various
challenging and modern utility projects. Frank Jakob is the director for advanced
energy storage solutions within the Black &
Heather Donaldson is managing director of
Veatch’s energy and process industry business
Black & Veatch Management Consulting,
line. Jakob focuses on storage solutions for
where she is responsible for supporting clients
renewable and conventional power generation
through grid modernization, transportation
in both distributed energy and utility sectors.
electrification, DER integration and other
He also focuses on decarbonized thermal and
transformations. A recognized expert in the
electrical solutions for process industries.
energy industry, Donaldson has served as a
With more than 40 years of experience, Jakob
special advisor to the California Public Utilities
advises industry, utility, developer, owner
Commission, as a principal with Southern
operator and government clients, as well
California Edison, and as a director with
as the internal Black & Veatch engineering,
California ISO.
procurement and construction (EPC) teams
Hua Fang is a managing director, co-leading regarding the application, design and uses of
Black & Veatch’s strategy and planning energy storage systems (ESS) for stationary
practice and technical and commercial due power generation applications and industrial
diligence practice. As a Ph.D. economist with thermal storage applications.
more than 20 years of experience in integrated
Kyle Kuhn is an engineering manager and
energy market modeling and forecasting,
grid integration portfolio manager at Black
asset valuation and commercial strategy,
& Veatch. With nearly 10 years of industry
Fang has led several recent projects advising
experience, Kuhn has been heavily involved
utility clients on economic assessments,
with business development and technological
investment strategies and customer impacts
solutions for renewable collector and
to meet their decarbonization objectives.
interconnect substations as well as EPC
She also leads Black & Veatch’s economic
project execution.
and market assessments for emerging zero-
carbon technologies such as clean hydrogen
and green ammonia. She also oversees Black
& Veatch’s Energy Market Perspective (EMP),

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | ABOUT THE AUTHORS | 44

Arron Lewis is a vice president and the energy infrastructure as they pursue goals around
utility West Region leader at Black & Veatch. sustainability, growth and resilience.
With more than 29 years of experience,
Leslie Ponder is the technology portfolio
Lewis previously served as Black & Veatch’s
director for global distributed energy at
global power distribution business, heading
Black & Veatch, where she is responsible for
the global deployment of services for power
evaluating and delivering technology solutions
distribution infrastructure. His focus is on
within distribution, asset management and
the delivery of solutions to client’s needs
distributed generation. Ponder has more than
for the energy transition, digitization and
30 years of experience and has led systems
grid modernization, as well as infrastructure
strategy and planning for communications,
construction and upgrades required to meet
grid analytics, and grid control and security
the evolving needs of utility clients that deliver
systems.
energy to customers.
Craig Preuss is a system architect for utility
Kevin Ludwig is a vice president and grid
automation at Black & Veatch. Preuss, who
solutions leader at Black & Veatch. With more
is a professional engineer in the states of
than 20 years of experience in the power
Illinois and Washington, performs many
industry, Ludwig serves as the solution leader
different tasks since he works in utility
for Black & Veatch’s offerings in transmission,
integration and automation. Preuss is a
distribution and private networks across all
senior IEEE member who chairs of the Power
markets and industries.
System Communications and Cybersecurity
Ryan Pletka is a vice president of innovation Committee (PSCCC), providing strategic
and strategy at Black & Veatch. Pletka electric industry direction in the PSCCC for
also helped found the company’s growth cybersecurity standards and supporting the
accelerator, for which he leads investments development of those standards as well
in internal and external startups, incubation as implementing cybersecurity designs on
and mentoring of new businesses, advising various projects for electric and gas utilities.
on corporate strategy, and scouting for new
Algert Prifti leads the carbon capture,
technologies and trends.
sequestration and utilization (CCUS) efforts
Deepa Poduval is a senior vice president, at Black & Veatch. He focuses on exploring
leading the global advisory practice within existing and emerging decarbonization
Black & Veatch. In this role, she provides technology solutions that contribute directly to
executive leadership for Black & Veatch’s new and traditional industry clients seeking to
strategic and digital advisory services, manage their carbon emissions and generate
including expertise related to transaction value-add opportunities. Prifti has experience
due diligence, regulations, business strategy, assessing and implementing CCUS solutions
energy market planning, asset and risk across the value chain, including point-source,
management, operational technologies and carbon capture and sequestration (CCS), CO2
infrastructure modernization needs. Poduval dehydration and compression, CO2 pipeline
and her team partner with a wide variety of and storage, and CO2 utilization technologies.
clients spanning governments, and electric, In addition to point-source CCS, he also is
water, oil and gas, commercial, industrial leading the direct air capture (DAC) technology
and financial sectors across the Americas, scale-up and project development efforts at
Europe and Asia who seek strategic, digital Black & Veatch. He has experience working
and technical expertise related to their critical directly with diverse industry stakeholders and

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | ABOUT THE AUTHORS | 45

utility owners to develop and navigate custom expertise to meet current and future client
decarbonization roadmaps that pave the way needs. Tilley leverages more than 20 years of
to a low-carbon footprint future. As part of global experience on more than 100 renewable
the New Energy Solutions team at Black & energy projects ranging from 1 MW to 3 GW in
Veatch, Prifti also is involved with projects capacity. His experience across the lifecycle
focused on implementation of other advanced of projects includes portfolio planning,
decarbonization technologies. project development, technology selection,
detailed design engineering, major equipment
Ralph Romero is senior managing director procurement and construction contracting,
at Black & Veatch Management Consulting project execution and repowering for a wide
LLC, leading the independent assessment of range of clients. His experience also extends
novel technologies practice. Romero joined into strategy development, marketing and
Black & Veatch Management Consulting in business development, technology innovation
2010 and has been the principal investigator and process improvement.
in more than 180 technology assessments
in the areas of hydrogen, chemical and Rob Wilhite is a senior vice president and
mechanical energy storage, power conversion leader of the strategic advisory business line
systems, photovoltaic cells and modules, at Black & Veatch. He and his team provide
mechanical tracking systems and advanced advisory services on the topics of zero-
water technologies. He advises domestic emission transportation, distribution grid
and international manufacturers, developers planning, decarbonization, strategic planning,
and financial institutions in the areas of clean fuels strategies, transaction services,
technology, manufacturing, product and and rates and regulatory services. With
process design, among others. 37 years of experience in energy business
strategy and utility operations, Wilhite serves
Paul Stith is associate vice president of global as a board director and executive committee
transportation initiatives for Black & Veatch member for GridWise Alliance, is chairman
Strategic Growth. He focusses on building for the city of Belmont’s Environmental
the ecosystems needed to plan, finance, Sustainability Board and is co-chair of the
deploy and operate sustainable transportation technology & innovation pillar for Dentons’
and distributed clean energy infrastructure Smart Cities & Community Think Tank. In
at scale. Stith’s projects support investors, 2009, he was recognized as one of the top 25
utilities, fleets, energy and transportation consultants in the United States by Consulting
providers in electrifying, decarbonizing and Magazine in 2009.
automating their ground, aviation and marine
fleets. With more than a decade of zero-
emission vehicle infrastructure experience he
is a member of numerous industry advisory
and working groups and serves on the Forth
and NACFE boards of directors.

Sean Tilley is the emerging renewable energy

solutions leader within Black & Veatch’s
Energy & Process Industries’ power business.
He is responsible for the optimization
and growth of the company’s portfolio of
renewable energy project solutions, with the

BLACK & VEATCH 2022-2023 ELECTRIC REPORT | ABOUT THE AUTHORS | 46

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BLACK & VEATCH 2022-2023 ELECTRIC REPORT | 47