Highlights from PowerXchange: Impact of the Pandemic on Electric Industry Transitions
One of the more thought provoking sessions I attended at this year’s NRECA PowerXchange conference focused on how the events of 2020 will likely accelerate transformation for the U.S. electricity industry. Industry mega-trends such as digitalization, decarbonization and decentralization have now sped up, according to the program’s panelists, either directly out of pandemic necessity or indirectly in response to altered consumer behavior. The key take-away is that the disruption associated COVID-19 and the high frequency of climate disasters over the past year have fundamentally lowered barriers to change, underscoring the importance of adaptability for electric cooperatives.
Focusing on digitalization, the NRECA panel moderator, Venkat Banunarayanan, referred to a recent McKinsey survey indicating that executives believe their companies have digitized many activities 20 to 25 times faster as a result of the pandemic. With social distancing and other safety precautions put in place over the past year, the vast majority of normal public interactions have had to take place virtually, forcing an accelerated path toward digitalization. For the power industry, that has meant a number of electric cooperatives made significant progress toward digital transformation over the past year. Yet, even with advanced emergency planning (admittedly, more geared toward natural rather than pandemic disasters), this has been no easy feat because of the high-contact nature of this essential work.
Day-to-day operations of the U.S. bulk power system is highly dependent on a uniquely trained and specialized workforce, who are often required to work collaboratively and within close proximity. Yet, as the proverb goes, necessity is the mother of invention. With new engineering and administrative controls required to limit COVID-19 transmission, electric cooperatives quickly embraced these new digital solutions, as office staff worked from home and field operators adopted safer protocols.
As a result, a number of important nascent digital trends accelerated, including remote work arrangements, a greater digitization of customer service and a more generalized shift from manual to automated processes. Now, a faster digital transition — to operational solutions performed by a connected workforce using a combination of remote asset tracking, monitoring, analytics, and real-time insights to keep the grid reliable and resilient — continues to unfold. Echoing these workplace modifications was the recent RE-Magazine article, “G&T COVID-19 Response: The Grid Kept Humming” detailed the implementation plans of a few of the electric cooperatives, such as the separate control rooms at Sunflower Electric Power Corp. or scaling digital communication capabilities for Arkansas Electric Cooperative Corp. According to McKinsey, utilities that jump-started these digital programs before the crisis have proved more resilient over the past year, possibly encouraging even greater progress for the industry.
Daniel Brooks from Electric Power Research Institute emphasized how the industry’s pandemic resilience would enhance the clean energy transition. While climate change and COVID-19 are two very different challenges, they do have some key things in common. Both are global, they do not respect national boundaries and both require countries to work together to find solutions. Toward that end, Daniel highlighted how global economic recovery plans had aligned with advancing energy transition. European counties announced plans mid-year 2020 to dedicate a large portion of recovery funds to energy transition. In the U.S., the possibility of moving beyond the $1.9 trillion COVID relief package opens the door for Congress to discuss the Biden administration’s “Build Back Better” recovery plan. While the White House has been quiet on details of this plan, there is an expectation that the program will likely mirror the $2 trillion infrastructure and climate proposal laid out in the campaign.
Just how prepared are rural electric cooperatives to fast-track energy transition? CoBank’s Tamra Reynolds emphasized that the unique alignment with cooperative members will enable the sort of agility required not only adapt to the rapid transition, but to thrive. In particular, rural communities likely stand to benefit from the increase in distributed energy resource (DER) development. Electric cooperatives have a successful track record with consumer alignment and behind-the-meter innovations. They could utilize these resources to further insulate their communities against escalating future delivery costs. A future of change brings greater optimism for rural electric cooperatives that have a successful track record with member engagement — a critical element for thriving in this evolution.
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