As the U.S. electric industry navigates the demands of a decarbonizing world, Black & Veatch’s 2024 Electric Report highlights significant opportunities in renewable energy and sustainable infrastructure, while addressing key challenges like grid modernization and cybersecurity threats.
Now in its 18th year, the report illustrates a sector vastly different from 2006. The rising frequency of climate events, more sophisticated cyberattacks, and increasing demand from data centers are placing new pressures on power providers. Federal funding and new regulations have created opportunities for modernization and sustainability, though 54% of respondents still cite regulation as a challenge.
Jim Doull, Executive Vice President of the Power Providers sector, explains, “The 2024 Electric Report provides utilities with insights into how peers are navigating modern challenges. While regulations and funding move forward, each utility is taking its own approach to modernization, and this report offers valuable foresight into the future of U.S. energy.”
The report identifies four major challenges facing utilities:
- Cybersecurity Concerns: With increasing technological complexity in utility networks, the risk of cyberattacks grows. Although 70% of respondents express some confidence in their utility’s ability to recover from attacks, the findings suggest that utilities are more reactive than proactive in cybersecurity planning.
- Grid Modernization Urgency: As utilities strive to expand and modernize the grid, they are challenged by aging infrastructure, interconnection issues, and the need to maintain safe, reliable energy. Renewable energy penetration is seen as the most significant driver of grid modernization (57%), followed by low-probability, high-impact events like extreme weather (43%).
- AI and Data Center Demand: The rapid growth of data centers has created unprecedented demand for power, with load requests far exceeding previous standards. Nearly 45% of respondents report a lack of confidence in their ability to forecast data center loads, reflecting the uncertainty around these large-scale power demands.
- Impact of Climate Events: Severe weather events continue to cause widespread disruptions, damaging infrastructure and leading to outages. Around 80% of respondents acknowledge that resiliency is now a higher priority in utility investment decisions.
Doull adds, “Tracking the electric industry annually helps us identify trends and challenges. The rise of AI is driving increased demand for data centers, putting further strain on the grid and amplifying the need for robust cybersecurity. Today’s challenges look much different than they did when we first published this report nearly 20 years ago.”
As the industry evolves, utilities are preparing for new threats while addressing ongoing challenges. With emerging regulations and new funding, leaders like Black & Veatch are helping the U.S. power sector embrace technological advancements and prepare for the future, whether through energy transition efforts or the assessment of software and systems.
