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2022 Black&Veatch Asia Electric Report BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|ABOUT THIS REPORT|2About This Reportwelcome to our Black&Veatch 2022 Asia Electric Report.As we continue to face the COVID-19 pandemic and emerge from major political moments such as COP26,Asias electricity providers continue to grapple with implementing an affordable and reliable energy transition.This report illustrates the many hurdles we face while expressing an optimistic view of where the industry is heading.Our report features data from two surveys one,an in-depth survey of 57 senior electric industry professionals;and the other,a poll of 33 commercial and industrial electricity customers who identify as readers of our media partner,Eco-Business.We are grateful for the insights provided by respondents who represent views from throughout East Asia,South Asia and Southeast Asia We believe in sharing these insights with the market as we see a need for more integrated thinking and solutions across generation,transmission and distribution even as large commercial and industrial electricity consumers play a growing role in influencing our industrys future.We welcome your questions and comments regarding this report and Black&Veatch services.You can reach us at MediaI.BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|AT A GLANCE|3Pressure from governments,shareholders,and commercial and industrial customers are 3 of the top 4 drivers of investment in renewable energy35%of the industry believe renewable integration is the biggest challenge they face1.Integration Is the Challenge Decarbonization calls for increased systems-thinking paired with a focus on generation alongside transmission and distribution,with consideration of increasing variable demand3.Take the long-viewAs technologies like coal decline and others like battery storage and hydrogen emerge,the industry alongside governments and large customers needs to plan further ahead to create a financially and environmentally sustainable pathway to decarbonization2.Its a Bigger World Future operations and investments are being increasingly influenced by a broader set of stakeholders customers and shareholders are gaining a stronger voice alongside governments and financiersMore than 50%of industry respondents either do not have effective decarbonization roadmaps in place beyond 5 years or have none at allAt a GlanceBLACK&VEATCH 2022 ASIA ELECTRIC REPORT|CONTENTS|4C O N T E N T SC O N T E N T S2At a Glance 05 I Integration is Critical to Asias Decarbonization 12 I Expanding Trans-mission Systems Key to Asias Renewable Integration 16 I Stakehold-ers Lead Push for Low-Carbon Invest-ments 23 I The Road to Net Zero for Intensive Energy UsersBLACK&VEATCH 2022 ASIA ELECTRIC REPORT|INTEGRATION IS CRITICAL TO ASIAS DECARBONIZATION|5Integration is Critical to Asias Decarbonization by Narsingh Chaudhary,Executive Vice President&Managing Director Power AsiaThe focus on decarbonization is greater than ever,bringing new challenges for governments,regulators and developers across Asia.Fortunately,this attention is accompanied by a push to identify and execute the most efficient strategies for meeting new and increasingly aggressive decarbonization commitments.However,there is no simple answer to solve this transition,particularly in Asia,a region still very much dependent on coal to meet its base load energy demand.Having a clear sense of how existing and emerging technologies could work together while embracing a 360-degree view of the energy mix and necessary grid infrastructure assets will be critical in achieving net-zero strategies and will underpin the power markets efforts to decouple fossil fuels from the provision of affordable,reliable and resilient power supply.BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|INTEGRATION IS CRITICAL TO ASIAS DECARBONIZATION|6A growing awareness of the importance of integration is the most prominent finding to emerge from the Black&Veatch 2022 Asia Electric Report.Specifically,integrating intermittent renewable energy into traditional grid structures was identified as the single biggest challenge the industry facing,according to respondents(Figure 1).Growing acceptance of renewable technology and cost parity have been achieved.Now,integration is the challenge.Paving the Way for More Distributed and Connected Regional GridsAs the world adjusts to the consequences of the COVID-19 pandemic,systems integration surpasses last years top concern around investment uncertainties.It also reflects an acceptance of the electric grids shifting complexities:the structure will no longer center around a few large baseload facilities,but instead will embrace a more distributed,digitalized array of generation sources equipped to accommodate the electrification of everything.What will not change is the goal of any electricity provider reliable and resilient grid operations and service.The survey shows this core business is threatened most by government policies that continue to evolve and,in the wake of Novembers COP26,have pushed decarbonization goals sharply over the past 12 months.Figure 1From your perspective,what are the most challenging issues facing the electric industry in your region today?(Select the top three)Source:Black&VeatchRenewable integration35.1onomic regulation(i.e.,rates)24.6%Uncertainty of investment24.6%Market uncertainty due to the pandemic(i.e.COVID-19)24.6%Energy storage21.1%Planning/forecasting uncertainty21.1%Environmental regulations17.5%Aging infrastructure14.0%Distributed energy resources(DERs)integration14.0%Distribution system upgrades and modernization14.0cess to capital investment14.0%Market structure12.3%Lack of skilled work force8.8%BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|INTEGRATION IS CRITICAL TO ASIAS DECARBONIZATION|7These policy challenges are compounded by an underinvestment in transmission systems and insufficient energy storage capacity,systems that help mitigating renewable intermittency while traditional conventional generation capacity is reduced(Figure 2).These are tough realities that the industry faces.Alongside critical grid management and technical issues explored later in Expanding Transmission Systems Key to Asias Renewable Integration,where the sun shines and the wind blows are also obvious integration factors.The location of new solar and wind facilities often is distant from existing baseload plants,transmission lines and,indeed,from where major demand centers exist.Most of the renewable resources in India,for example,are in western and southern states,while other locations like Singapore will have to rely on importing renewable and clean energy supply from overseas.To that point,Singapore announced in October 2021 that it plans to import 30 percent of its electricity from low-carbon sources beyond its borders,and progress has been made in recent months on the Laos-Thailand-Malaysia-Singapore Power Integration Project.Similarly,Laos and Vietnam recently reached a trading agreement for the purchasing of wind energy as part of progress on the integration of the Greater Mekong Subregion,a program involving five Southeast Asian nations and China.Planning for and Integrating Emerging TechnologiesSuch practicalities have coincided with increased interest in and debate about the use of hydrogen as an energy carrier.Hydrogen can be used as an exportable,seasonal energy storage method to respond to the variability of wind and solar,and as a fuel for existing gas turbine facilities.While the production of hydrogen via electrolysis scales and corresponding Figure 2What are the biggest threats to reliable grid operations and performance in your region?(Select up to three)Source:Black&Veatch43.9%Government policies36.8%Underinvestment in more reliable transmission networks31.6%Not enough energy storage capacity26.3%Aging infrastructure 24.6%Investment in network capacity not keeping pace with demand growth19.3%Introduction of too much variable renewable energy15.8%Cybersecurity threats14.0%Introduction of other distributed energy resources14.0%Climate threats12.3%Lack of adequately trained manpower and appropriate tools BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|INTEGRATION IS CRITICAL TO ASIAS DECARBONIZATION|8Beyond 10 yearsHydrogen73.0%Retiring traditional fossil-fueled generation sites 51.4ttery energy storage43.2%Combined cycle27.0%Wind27.0%Natural gas24.3%Making traditional fossil-fueled generation more efficient18.9%Power purchase agreements(PPAs)18.9%Solar18.9%cost barriers decrease adoption can be encouraged through gateway approaches that combine hydrogen production from fossil fuels with carbon capture.In parallel with incentivized investment in green hydrogen production,these approaches together can bring scale to a hydrogen economy and help lower the cost per kilogram over time of green hydrogen.The industry is clearly optimistic,with three out of four respondents believing that,beyond 10 years,hydrogen will help meet emissions reduction and clean energy goals.This is significantly more than any other technology over the mid-term(Figure 3).Figure 3Which 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)Source:Black&VeatchBLACK&VEATCH 2022 ASIA ELECTRIC REPORT|INTEGRATION IS CRITICAL TO ASIAS DECARBONIZATION|9Figure 4When do you think hydrogen generation will take off in your region of business as a clean and affordable alternative to existing gas generation?(Select one)Source:Black&Veatch9.6%By 202546.2%By 203026.9%By 20405.8%By 20503.8yond 2050 7.7%Hydrogen generation does not have a feasible futureFurthermore,only 8 percent of respondents believe there is no future for hydrogen as a feasible,clean and affordable alternative to natural gas(Figure 4).Despite these and other emerging challenges that lie ahead,industry respondents are overwhelmingly positive,recognizing the importance of the regions energy transition.A mere 2 percent of respondents disagree that investments are being channeled to clean energy(Figure 5).Another critical shift observed in this years findings is the change in investment influences.While government policy continues to be critical for electric utilities,were seeing a rise in shareholders and large customers influence on investment,as explored in more Stakeholders Leading Push for Low-Carbon Investments.For the first time,we also have included the energy and sustainability perspectives of large commercial and industrial customers as featured in The Road to Net Zero for Intensive Energy Users by our media partner,Eco-Business.The Energy Transition Calls for Integrated Decarbonization PlanningCompared with last year,while remaining robust and significant,data points to the potential long-term softening of natural gas as part of generation portfolio development.Forty-six percent of industry respondents see a role for gas beyond 2035,which falls from about two out of three respondents in last years survey(Figure 6).Figure 5To what extent do you agree or disagree with the following statement:We are directing our capital towards clean energy.Source:Black&Veatch50.0%Strongly Agree32.0%Somewhat agree2.0%Somewhat disagree16.0%Neither agree nor disagreeBLACK&VEATCH 2022 ASIA ELECTRIC REPORT|INTEGRATION IS CRITICAL TO ASIAS DECARBONIZATION|10Notably,views appear to have shifted to investment in existing gas-fired facilities,signaling interest in energy transition solutions that include upgrading to more efficient and advanced turbines,integrating battery energy storage systems,and planning for the eventual use of hydrogen in lieu of natural gas.The energy transition will require the development of prioritized decarbonization roadmaps,essentially the detailed,yet flexible plans that electricity providers will use to maximize returns on their asset investments and realize their sustainability goals.What is concerning is that one in three do not have decarbonization roadmaps in place today,highlighting a significant financial risk.Such technology and investment blueprints help electricity providers plan out capital investment over 10 years or longer horizons.Only 15 percent of respondents claim to have such robust investment roadmaps in place,indicating there is much room to prioritize and optimize ongoing clean energy investments in the years ahead(Figure 7).Figure 6Is there a future for fossil fuel generation(utility-scale coal and gas generation)in your region(s)of operation beyond 2035?(Select the scenario that best applies)Source:Black&Veatch20202021Yes,both coal and gas will remain important components of the grid beyond 2035 18.2.4%Yes,investment in gas will remain long term,however,coal will be gradually phased out with little new development 48.50.8%We will see limited investment in coal and gas investment will focus mostly on upgrading existing facilities only12.1%.0%No,we will see limited investment in both gas and coal9.1%3.8%No,we will see limited investment in gas and we will also start seeing increased decommissioning of coal facilities12.1#.1%No,we will see increased decommissioning of both gas and coal facilities0.0%1.9%BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|INTEGRATION IS CRITICAL TO ASIAS DECARBONIZATION|11Figure 7Do you have a decarbonization roadmap in place?If so,what timeframe(s)for investment decisions are included?Source:Black&Veatch35.4%No,we do not have a decarbonization roadmap33.3%Yes,for the next 10 years18.8%Yes,for the next five years14.6%Yes,extends beyond 10 years ConclusionThis combination of challenges facing the power industry highlights the importance of integration on a number of levels from planning to technologies,and across industry,government and customers.To help realize an affordable and successful energy transition,the industry must align with all stakeholders and embrace holistic planning and design of generation,transmission and distribution systems.BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|EXPANDING TRANSMISSION SYSTEMS KEY TO ASIAS RENEWABLE INTEGRATION|12Expanding Transmission Systems Key to Asias Renewable IntegrationBy Jerin Raj,Director,Asia Power Transmission&DistributionR obust transmission and distribution networks are a critical part of Asias transition to a renewables-based,decentralized grid.Rather than simply the deployment of renewable generation,the integration of these assets is the single biggest concern facing the industry across Asia,according to this years Black&Veatch 2022 Asia Electric Report.The rapid growth of solar power in Vietnam between 2019 and 2020,for example,holds important lessons for the rest of Asia.Installed solar capacity leapt from hundreds of megawatts to 16.8 gigawatts,representing approximately a quarter of the nations grid capacity.However,without supportive enhancements to the grid and transmission network,Vietnam Electricity(EVN)reportedly restricted power by BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|EXPANDING TRANSMISSION SYSTEMS KEY TO ASIAS RENEWABLE INTEGRATION|13Figure 8What are the biggest threats to reliable grid operations and performance in your region?(Select up to three)Source:Black&Veatch43.9%Government policies36.8%Underinvestment in more reliable transmission networks31.6%Not enough energy storage capacity26.3%Aging infrastructure24.6%Investment in network capacity not keeping pace with demand growth19.3%Introduction of too much variable renewable energy15.8%Cybersecurity threats14.0%Introduction of other distributed energy resources 14.0%Climate threats12.3%Lack of adequately trained manpower and appropriate toolsa total of 365 million kilowatt hours after grids in the central provinces of Ninh Thuan and Binh Thuan were overloaded in 2020 with further curtailments occurring in 20211.With wind and solar resources often located far from existing transmission lines,alongside other factors such as the expansion of distributed energy resources(DERs)and increasing bi-directional flows,Asias transmission and grid systems need more investment to manage a successful energy transition.Renewable Integration A PriorityIn the eyes of our 2022 survey respondents,underinvestment in transmission is one of the top three threats to reliable grid operations and performance(Figure 8).This is joined by insufficient energy storage capacity,which can play a critical role in stabilizing a grid with intermittent renewable energy generation;and government policies,an answer which could be attributed to the considerable policy debates around decarbonization,which occurred in the lead up to COP 26,coinciding with the timing of the survey.In addition,one in four respondents admit they were not confident in the performance and resilience of their transmission and distribution systems.(Figure 9)Expanding and investing in higher quality transmission and distribution systems will be required to improve the efficiency,resiliency and reliability of supply and balance the variability of renewable sources.Reliable grids that can support the growth of decentralized power will help to optimize generation and enhance grid stability.Key transmission expansion strategies will include deploying interconnection lines,interconnection substations,and switching facilities in areas with high potential for renewable generation to allow seamless connection to the grid.1Electricity oversupply forces authorities to cut solar output,Vietnam Express International,February 24th,2021BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|EXPANDING TRANSMISSION SYSTEMS KEY TO ASIAS RENEWABLE INTEGRATION|14Figure 9Given increasing levels of renewables integration,rising populations and demands and threats of the impact of climate change,how confident are you in the performance and resilience of your transmission and distribution systems?(Select one)Source:Black&Veatch42.9%Somewhat confident9.6%Very confident19.2%Neutral23.1%Somewhat unconfident1.9%Very unconfident When appropriately deployed,these facilities will help to manage some of the challenges with renewable generation related to lower inertia and lack of dynamic reactive power capability while also facilitating integration with the collector substations that accompany each large-scale renewable development.Upgrading Transmission Presents Challenges Expanding transmission networks,however,is complex.Our 2022 survey respondents identified land acquisition and right-of-way(ROW)access as the biggest challenge to improving transmission(Figure 10).While a typical solar farm may take six to nine months to develop,high-voltage transmission lines often take years to deploy and can be severely delayed by land issues.Technologies such as composite core conductors or advanced tower designs can help mitigate and address potential land issues.An example of an advanced tower design technology includes Breakthrough Overhead Line Design(BOLD),which can maximize power transfer on existing ROW by replacing old transmission lines with smaller-footprint,higher-capacity BOLD lines.BOLD technology is ideal for long distance and intercountry connections where high-voltage AC interconnections are viable.Noteworthy also from the findings is that poor understanding of transmissions integral and rising role in balancing the electric system comes in second ahead of policy,permitting and financing concerns.There is a clear need to increase awareness among government and other public stakeholders around the role of transmission in improving the effectiveness of renewable integration and achieving a successful energy transition.Where are Transmission Investments Going?Figure 10What is the biggest challenge facing transmission improvements and development today in your region?(Select one)Source:Black&Veatch37.3%Land acquisition and right-of-way access25.5%Poor understanding of its integral and rising role in the electric system19.6%Government policy support9.8%Permitting processes7.8cess to investment capitalBLACK&VEATCH 2022 ASIA ELECTRIC REPORT|EXPANDING TRANSMISSION SYSTEMS KEY TO ASIAS RENEWABLE INTEGRATION|15Regional electric industry leaders shared that over the next five years,their top investment focus will be in advanced system control devices that improve grid stability and operations such as Flexible Alternating Current Transmission Systems(FACTS).FACTS enable better control of power flow from congested parts of the grid to less-congested portions.FACTS devices such as static compensators(STATCOMs)are also critical to furnish the dynamic reactive power needs with integration of large blocks of renewable injections.This is especially true with the onshore interconnect facilities associated with offshore wind projects.Load control devices that better balance generation and revamping existing substations were other high priority investment areas identified by Asian electricity leaders(Figure 11).Next StepsAs Asia,like many other regions of the world,repowers its power industry,better planned and designed transmission systems are key to the decarbonization journey.Addressing voltage and frequency variability and grid code requirements effectively across the grid will reduce system losses,conserve energy and manage peak demand.Operational complexities of grids are shifting from large power plants near the point of power consumption to more distributed and intermittent renewable plants and DERs.These dynamics call for Asias electricity industry to re-evaluate transmission and distribution systems and conduct more advanced and interconnected planning and design across these systems.Partnering with industry leaders experienced with every aspect in the lifecycle of projects from early financing through to commercial operation will be key to expanding Asias transmission networks for renewable integration success.Figure 11When looking to improve transmission systems in the region,what are the top three priority investment areas over the next five years?(Select up to three)Source:Black&Veatch51.0vanced system control devices(FACTS,SVC,Sync Condensers)to improve grid38.8%Load control devices to better balance generation28.6%Revamp existing substations(expanding,retrofitting,revamping existing stations)28.6%New transmission line technologies(higher ampacity conductors,multi-circuit towers,low footprint structures,BOLD design)26.5%Revamp existing transmission lines(reconductoring,revamping existing lines)26.5%New high-voltage transmission lines22.4%New high-voltage substations(hybrid or GIS)6.1%New high-voltage substations(AIS)6.1%Underground transmission lines(including transferring existing lines to underground)BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|STAKEHOLDERS LEADING PUSH FOR LOW CARBON INVESTMENTS|16Stakeholders Leading Push for Low-Carbon Investmentsby Harry Harji,Associate Vice President for Black&Veatchs management consulting business in AsiaW hen it comes to financing Asias electricity generation and transmission infrastructure,sentiment is broadly positive.Given the challenges facing the power sector as Asia transitions to lower and,eventually,zero-carbon energy and electricity this is welcome news that should engender confidence in the ability to deliver decarbonization.Although respondents cited uncertainty of investment as the second most challenging issue facing the regions electricity industry,access to capital did not register as a major concern among the most perplexing issues.This suggests that although the nature of investments may require greater certainty,the availability of funds is not a major stumbling block.Another cause for overall optimism is reduced anxiety around investment.In 2020,37 percent of respondents cited investment uncertainty as among their most challenging issues,compared to 24 percent in 2021(Figure 12).Figure 12From your perspective,what are the most challenging issues facing the electric industry in your region today?(Select the top three)Source:Black&Veatch20202021Uncertainty of investment37.1$.6cess to capital investment14.3.0%BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|STAKEHOLDERS LEADING PUSH FOR LOW CARBON INVESTMENTS|17 Sentiment around access to capital remained virtually unchanged over the same period,indicating welcome stability during a turbulent 12 months.With the case for decarbonization proven,a further cause for optimism is that the vast majority of respondents,80 percent,believe capital is being directed towards clean,renewable energy(Figure 13).Levelized Cost of Energy Isnt the Only Game in TownIncreased government influence/pressure is now the biggest driver for investments in renewables,followed closely by increased shareholder pressure and sustainability goals.Although these were both among the top drivers in 2020,what has changed is the role of lower levelized cost of energy(LCoE),which in 2020 was seen as the biggest factor behind renewables investment,by a significant 61 percent of respondents.In 2021,this fell to 40 percent,with lower LCoE being eclipsed by government and shareholder pressure.So,overall,stakeholders expectations generally have overtaken acceptance that the technology is more cost effective as the most prominent driver of renewables investments.This sentiment is echoed in a significant drop,25 percent during the past year,in the level of respondents citing improved competitiveness and efficiencies of new technologies as factors driving renewable energy investments.The motive force behind renewables investments is switching from economics to the demands of governments and investors although the two remain linked inextricably(Figure 14).Figure 13To what extent do you agree or disagree with the following statement:We are directing our capital towards clean energy.Source:Black&Veatch50.0%Strongly Agree32.0%Somewhat agree2.0%Somewhat disagree16.0%Neither agree nor disagreeBattery storage is making it easier to manage and reduce lossesIncreased demand from residential customersIncreased demand from commercial and industrial clientsFewer options to finance traditional solutions/easier to finance renewablesAttractive government incentives and/or policiesLower development risks and risks of delays compared to traditional solutionsImproved competitiveness and efficiencies from new technologiesConvenience and lower risk of using PPAs to source new renewables projectsLower levelized cost of energyIncreased shareholder pressure and drive for sustainability goalsIncreased pressure/influence from governmentsFigure 14What factors are driving renewable energy investments in your region?(Select all that apply)Source:Black&Veatch6%Increase in 2021 22crease over responses from 20222020 38.7 21 44.6 20 42.9 21 51.6 20 61.3 21 39.3 20 33.9 21 12.9 20 32.1 21 38.7 20 28.6 21 35.5 20 48.4 21 23.2 20 16.1 21 12.9 20 14.3 21 n/a2020 8.9 21 6.5 20 8.9 21 19.4%BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|STAKEHOLDERS LEADING PUSH FOR LOW CARBON INVESTMENTS|18BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|STAKEHOLDERS LEADING PUSH FOR LOW CARBON INVESTMENTS|19There is also a shift in the nature of the funding.Analysis by SparkSpread indicates renewable projects in Asia are relying less on private equity.Renewable energy equity deals dropped by about 30 percent in the first two quarters of 2021.Against a backdrop of increasing overall project financing,this suggests that instead of relying on partnerships with private equity firms and infrastructure funds,renewables owners and developers are funding more projects themselves,using their own equity or debt along with bank financing.Wheres The Money Going?During the next five years,respondents anticipate solar power will attract the lions share of funding,with investments growing probably significantly from current levels.Hand-in-glove with the growth of solar infrastructure is predicted growth,again likely to be significant,in energy storage.Wrapped up in this is the increased investment forecast in microgrids/distributed energy resources(DERs).It is almost certain that there is a significant overlap here with solar-powered DER projects incorporating battery storage.Figure 15For each of the following categories,how do you expect new generation capacity investments to change over the next five years in your region?(Select one for each row)Source:Black&VeatchMuch more investment than todaySomewhat more investment than todayEnergy storage48.17.0%Solar(ground or roof)58.5$.5%Microgrids and other DER26.4P.9%Solar(floating)31.49.2%Hydrogen34.05.8%Wind(near/offshore)34.0&.4%Wind(onshore)24.54.0%Gas-fired/LNG to Power with CCUS9.6.4%Gas-fired/LNG to power13.20.2%Biomass7.74.6%BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|STAKEHOLDERS LEADING PUSH FOR LOW CARBON INVESTMENTS|20Respondents foresee a relatively small de-emphasis in wind investments,while hydrogen remains high in terms of expectation for increased investment(Figure 15).The big loser is coal.In 2020,18 percent of respondents anticipated an increased level of coal investment.By 2021,this had fallen to just 4 percent,while 59 percent said they felt coal investments during the next five years will be much less compared to current levels(Figure 16a-b).Emblematic of this change and the trend for investors driving decarbonization is an initiative coordinated by the Asia Investor Group on Climate Change.A group of 13 institutional investors including the asset management arms of BlackRock,JP Morgan,Fidelity,BNP Paribas,and Sumitomo Mitsui Financial Group announced plans to engage with five Asian coal-burning utilities to urge greenhouse gas emissions reductions and climate-risk accountability.Gas:Short-Term Confidence,Medium-Term UncertaintyThe picture for gas investments is more nuanced.Investment during the coming five years is expected to be robust for both gas-fired/liquefied natural gas(LNG)-to-power projects with and without carbon capture utilisation and storage;only about 20 percent of respondents envisage investment dipping below current levels with the majority anticipating the same or increased levels of investment(Figure 17).Driving gas-plant prospects across Southeast Asia is the desire to reduce reliance on coal while meeting growing power demand;something intermittent renewables alone cannot achieve.Analysis by Bloomberg New Energy Finance(BNEF)suggests government plans across the region call for 37 gigawatts(GW)of new gas-fired capacity during the next decade.As the level of renewables grows generators will need smaller,fast-reacting and Somewhat less investment than todayMuch less investment than todayCoal-fired with CCUS25.00.8%Coal-fired25.9Y.3%Figure 16aFor each of the following categories,how do you expect new generation capacity investments to change over the next five years in your region?(Select one for each row)Source:Black&Veatch2020:More investment than today2021:More investment than today Coal-fired with CCUSN/A21.2%Coal-fired17.6%3.7%Figure 16bFor each of the following categories,how do you expect new generation capacity investments to change over the next five years in your region?(Select one for each row)Source:Black&VeatchBLACK&VEATCH 2022 ASIA ELECTRIC REPORT|STAKEHOLDERS LEADING PUSH FOR LOW CARBON INVESTMENTS|21flexible gas generation.Consequently,gas spend is likely to focus more on simple rather than combined cycle plants and aero-derivative or F-,as opposed to H-,class turbines.BNEF also forecasts that Indonesia,Malaysia,Philippines,Thailand,Vietnam and Taiwan are expected to grow LNG import capacity in the first half of the 2020s,to help fuel more than 25 GW of proposed LNG-to-power projects.That said,there is less optimism about the role of gas-fired generation beyond 2035.In 2021 nearly one in two respondents see gas role falling beyond 2035,compared to about two out of three who responded in 2020.And it is anticipated that the gas investments which go ahead will become increasingly focused on upgrading existing facilities(Figure 18).Given respondents belief in hydrogens potential to take off as an affordable alternative to existing gas generation,46 percent anticipate this will happen by 2030(see Integration is the Key to Asias Decarbonization),it seems likely that full or partial fuel conversion to hydrogen will figure significantly in the upgrades.Regardless of the source,getting the electricity to the customer remains a challenge.Somewhat less investment than todayMuch less investment than todayGas-fired/LNG to Power with CCUS15.4%9.6%Gas-fired/LNG to power17.0%3.8%Figure 17For each of the following categories,how do you expect new generation capacity investments to change over the next five years in your region?(Select one for each row)Source:Black&VeatchFigure 18Is there a future for fossil fuel generation(utility-scale coal and gas generation)in your region(s)of operation beyond 2035?(Select the scenario that best applies.)Source:Black&Veatch20202021Yes,both coal and gas will remain important components of the grid beyond 203518.2.4%Yes,investment in gas will remain long term however coal will be gradually phased out with little new development 48.50.8%We will see limited investment in coal and gas investment will focus mostly on upgrading existing facilities only12.1%.0%No,we will see limited investment in both gas and coal9.1%3.8%No,we will see limited investment in gas and we will also start seeing increased decommissioning of coal facilities12.1#.1%No,we will see increased decommissioning of both gas and coal facilities0.0%1.9%BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|STAKEHOLDERS LEADING PUSH FOR LOW CARBON INVESTMENTS|22Underinvestment in more reliable transmission networks,in both 2020 and 2021,is seen as the second biggest challenge to reliable grid performance(Figure 19).Investment priorities to address this center upon grid management equipment,rather than transmission lines,with more than half of respondents citing the need for advanced system control devices.This was followed,in terms of investment priorities,by load control devices to better balance generation;and upgrading existing substations.Digitization of grid management equipment is seen as a necessity(Figure 20).So decarbonization and digitization are where respondents believe investments will focus in the short to medium term.The organizations best positioned for success in this context will be those developing their initial strategic decarbonization roadmaps,the quality of which will significantly impact the return on their investments and ability to thrive in a decarbonized future.Figure 19What are the biggest threats to reliable grid operations and performance in your region?(Select up to three)Source:Black&Veatch20202021Government incentives and/or policies16.1C.9%Underinvestment in more reliable transmission networks38.76.8%Not enough energy storage capacity29.01.6%Aging infrastructure25.8&.3%Investment in network capacity not keeping pace with demand growth41.9$.6%Figure 20When looking to improve transmission systems in the region,what are the top three priority investment areas over the next five years?(Select up to three)Source:Black&Veatch51.0vanced system control devices(FACTS,SVC,Sync Condensers)to improve grid38.8%Load control devices to better balance generation28.6%Revamp existing substations(expanding,retrofitting,revamping existing stations)28.6%New transmission line technologies(higher ampacity conductors,multi-circuit towers,low footprint structures,BOLD design)26.5%Revamp existing transmission lines(reconductoring,revamping existing lines)BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|THE ROAD TO NET-ZERO FOR INTENSIVE ENERGY USERS|23The Road to Net Zero for Intensive Energy Users By Gillian Parker,assistant editor,Eco-BusinessThis year,the demand for coal set a new record,pushing prices to record-highs.While many industrialized countries have been shutting down coal plants for years to reduce carbon emissions,in Asia which houses half of global manufacturing coal use is growing rather than shrinking.This is especially so as rapidly developing countries in the region still look to fossil fuels to meet a booming demand for power,even as investment in coal is expected to wane,according to this years Asia Electric Report(Figure 21).BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|THE ROAD TO NET-ZERO FOR INTENSIVE ENERGY USERS|24Taken together with an increasing appetite and pressure to lower industrial carbon emissions,this points to significant change on the horizon for hard-to-abate industries in Asia that rely on huge volumes of energy.Today,most of their power needs are met through fossil fuels,but this remains their biggest hurdle to achieve net-zero goals.Industry leaders,therefore,say that they must work closer with the electric power industry,either collaborating and influencing the development of more renewable and sustainable energy,or directly financing and building the solution.Renewables and Market ForcesIn a survey conducted by Eco-Business and Black&Veatch,half of the respondents said that they will target Scope-2 indirect emissions from the energy they purchase in their carbon-reduction strategies.The data center industry in particular is looking for ways to procure renewable energy to reduce their operational carbon emissions.Reducing Scope-2 emissions,industry leaders say,has to be a key focus of future energy roadmaps.If a center can secure 100-percent locally generated renewable power,it would reduce its carbon footprint by 90 percent.Data centers guzzle huge amounts of energy to keep their operations going around-the-clock.Somewhat less investment than today:Much less investment than today:Coal-fired25.9Y.3%Figure 21How do you expect new coal-fired generation capacity investments to change over the next five years in your region?Source:Black&VeatchWhile technology to bring about efficiencies in operating data centers to help cut carbon emissions is improving,changing where these centers get their energy from is the most impactful,says Darren Webb,co-founder and chief executive of Evolution Data Centres.“Other factors are important.But in terms of materiality,the Evolution view is that they dont compare at all with having a renewable power story,”says Webb.Nevertheless,efforts by intensive energy users to decarbonize will be curtailed if electricity transmission grids are not modernized and instead remain powered by coal and natural gas power plants.“You have to be transparent and honest.You have to be able to show auditability and traceability,to be able to say,we will show you exactly where the power was generated,we will show you exactly how it got to us,we have taken into account that the power was transmitted through a coal-based grid,”Webb said.Webb is banking on geothermal power generated in Indonesia and the Philippines to help sustain his energy-hungry data centers.Straddling the seismically active Pacific Ring of Fire,Indonesia is home to 40 percent of the worlds geothermal resources,with 300 sites identified by the government that could potentially generate 24 gigawatts of energy,although development cost challenges exist compared to other technologies.Cementing the relationship with power generators and exploring ways to reduce or share in development costs is one approach for intensive users like data centers to access geothermal energy sources.“You will see data centers and power generators coming much closer together.You will see some data center operators becoming power generators.You will see power generators becoming data center operators,because there is such a natural alignment between the generation of renewable power and that off-taker who can take it at scale,on a continuous 24-hour basis,”Webb said.BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|THE ROAD TO NET-ZERO FOR INTENSIVE ENERGY USERS|25Webb believes that sourcing for renewable power independently,while using an existing grid structure for distribution,will trigger change in how utilities are managed and force transmission companies to cut their dependency on fossil fuels.“When someone says I am taking 30,50 or 100 megawatts and I am only using you for transmission,not for generation,this is a clear message from the market to transmission companies:you need to move from coal-based into renewables where you can,”Webb concluded.Betting on Technological Solutions New technologies that have yet to be commercialized will play an increasingly important role in meeting long-term ambitions for net-zero emissions and decarbonization.Over one-third of survey respondents said that aggressive greenhouse gas reduction goals and energy goals will be met by advances in technologies(Figure 22).They believe that these technologies can pave the way for improving energy efficiency and enable a switch to lower-carbon energy carriers.Green hydrogen and the deployment of carbon capture,utilization and storage could be transformative.Cement is one sector that is pinning its hopes on technology to slash carbon emissions.The majority of the carbon emitted by the cement industry comes from burning coal and other fossil fuels in the production process.Among heavy industries,cement accounts for the largest share of energy consumption and carbon dioxide emissions.Its production is set to increase as populations balloon and infrastructure needs increase,particularly in emerging economies.According to Ian Riley,chief executive of the World Cement Association,grid energy supply,which represents less than 10 percent of the sectors total energy supply,is not the primary focus for its decarbonization plans.However,some plants have moved to wind energy,Riley said.“A few cement companies are using directly contracted or their own renewables for power,but most use grid energy,”Riley said.Most companies today take the view that the grid will be decarbonized anyway and that electricity represents a small portion of emissions so Figure 22In terms of your GHG reduction and energy goals,what best characterizes your organizations ability to meet those goals?Source:Black&Veatch43.8%We set conservative goals with full knowledge of how we will achieve them34.4%We set somewhat aggressive goals and believe technology advances and cost reductions will help us meet them within our timeframe21.9%We set aggressive goals and do not yet know exactly how we will meet themBLACK&VEATCH 2022 ASIA ELECTRIC REPORT|THE ROAD TO NET-ZERO FOR INTENSIVE ENERGY USERS|26this is not going to be a priority unless there is potential to cut power costs,which is starting to be the case.Companies also see electrifying their current vehicle fleets as part of their sustainability strategies.More than 60 percent of survey respondents said they either are already doing so or have such plans in place(Figure 23).Electric vehicle(EV)sales are set to nearly double the number purchased last year,according to BloombergNEF.China is spearheading this trend,with government subsidies and the mass development of infrastructure underpinning growth.Indonesian GoTo Group,which includes ride-hailing start up Gojek,announced in April that it plans to make every car and motorcycle on its platform an EV by 2030 through partnerships with manufacturers and favorable leasing arrangements.The Jakarta-based firm works with the Indonesian government to support the development of the countrys EV industry,explains Tanah Sullivan,Group Head of Sustainability for GoTo.The company regularly Yes,we are currently electrifying our fleet25.0%Yes,we are planning to explore electrification within the next three years35.7%Yes,we will explore electrification option over the long-term28.6%No,but we are exploring the conversion of our fleet to hydrogen fuel cell vehicles3.6%No,we are not exploring electrification or hydrogen fuel cell vehicle conversion7.1%Figure 23Is the electrification of a vehicle fleet a part of your sustainability strategy?(Select one)Source:Black&Veatchengages in dialogue sessions with partners from across the public and private sector,as well as Government ministries responsible for developing Indonesias roadmap to a low carbon economy,says Sullivan.The company joins multilateral focus-group discussions held by the government and the state-owned enterprises ministry which is tasked with crafting a net-zero roadmap.Harnessing renewable energy to generate electricity for EVs will be critical to curbing CO2 emissions.Governments and state-owned enterprises are not as agile as some private companies.This is and will continue to be a barrier to progress.With intensive energy users looking to technology to help reach their targets,they should be incorporating research and development into their roadmaps.GoTo,for instance,is screening and testing some technologies that could help drive efficiencies and spur the uptake of renewables at an industry level.It plans to share its findings on the green technologies that it is testing.These include solar panels and their capability to charge EV batteries.Options that are viable in the local context can hopefully be considered by the government.“Whether providers want to scale,for example their solar solution,or sell the technology to private or public sector firms,both require a multi-stakeholder approach so we can accelerate our countrys energy transition journey,”Sullivan says.BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|THE ROAD TO NET-ZERO FOR INTENSIVE ENERGY USERS|27Sullivan also noted that while the Indonesian government is working on a plan to transition away from fossil fuels,firms should try to align their roadmaps with government targets and programmes.“We are trying to align with the Science Based Targets initiative and the Carbon Disclosure Project(CDP)because we want to best assess what these are going to look like,”Sullivan said.“In our context,its relatively new.We are also operating in an emerging market.”“It is still a balancing act between economic progress and the right for the country to have access to electricity that is affordable.”Peer Pressure,Consumer Demand and DisclosurePressure from consumers and investors is driving companies to find ways to slash emissions and this is expected to exert more Figure 24What factors are driving renewable energy investments in your region?(Select all that apply)Source:Black&VeatchIncreased pressure/influence from governments44.6%Increased shareholder pressure and drive for sustainability goals42.9%Lower levelized cost of energy39.3%Increased demand from commercial and industrial customers33.9%Attractive government incentives and/or policies32.1wer options to finance traditional solutions/easier to finance renewables28.6%Improved competitiveness and efficiencies from new technologies23.2%Lower development risks and risks of delays compared to traditional solutions16.1%Convenience and lower risk of using PPAs to source new renewables projects14.3%Increased demand from residential customers8.9ttery storage is making it easier to manage and reduce losses8.9%pressure on energy providers and transmission networks(Figure 24).“It is going to become a mandate from our customers,”Webb said.Cloud providers in the United States such as Google,Microsoft and Amazon Web Services have set aggressive sustainability targets,creating a ripple effect further down the supply chain onto data centers like Webbs.“While theres an option for where you source your power today and how sustainable you can be as an operator,I feel that the option is going to disappear in less than two years time,”Webb says.For most intensive users,changes are being enacted in anticipation of tighter regulations on emissions in the future.Less nimble operations could be left with stranded assets that become obsolete amid changing consumer demands.BLACK&VEATCH 2022 ASIA ELECTRIC REPORT|THE ROAD TO NET-ZERO FOR INTENSIVE ENERGY USERS|28Investors and asset managers also are looking for transparency and better disclosure about how large a companys carbon footprint really is.An increasing focus on declaring Scope-3 emissions the indirect emissions that occur in a companys value chain is likely to see large energy consumers press providers to drive down their emissions.According to the survey,most Asian organizations are measuring direct emissions,with 80 percent of the respondents citing measurement of Scope 1 emissions.About one in two organizations are measuring indirect emissions or emissions in their supply chains,represented by Scope-2(53 percent)and Scope-3 emission sources(50 percent)(Figure 25).Roadmap is KeyAlthough many organizations have made decarbonization pledges,they lack the strategic roadmap that will guide them to the goal.The most important and productive first step that any organization can take is to create a decarbonization roadmap,Black&Veatch stresses.According to its 2021 Corporate Sustainability,Goal Setting and Measurement Report,more than 80 percent of companies surveyed with revenues greater than US$250 million have set decarbonization goals,yet 25 percent have set goals at such a level that they are unsure how they will meet them.Over 40 percent of respondents to our survey said that they do not have a decarbonization roadmap,with about one third with a roadmap in place for only the next five years(Figure 25).Generally,effective roadmaps should be plans that look beyond 10 years,Black&Veatch advices.This roadmap blind-spot is perhaps symptomatic of a region still figuring out how to wean itself off fossil fuels.For some companies operating in fossil-fuel dependent countries,the challenges seem insurmountable.Accept the uncertainty and be adaptable,Black&Veatch urges in its report.“This approach avoids analysis paralysis in the face of demanding decarbonization targets.”Figure 25What elements are being included in your carbon reduction,renewable or emissions goals?(Select all that apply)Source:Black&Veatch80.0%Scope 1:What your companys facilities,plants and vehicles directly emit 53.3%Scope 2:Indirect emissions from energy you purchase50.0%Scope 3:Indirect emissions from upstream and downstream activities related to goods and services consumed or producedFigure 26Do you have a decarbonization roadmap in place?If so,what timeframe(s)for investment decisions are included?Source:Black&Veatch41.9%No,we do not have a decarbonization roadmap35.5%Yes,we have a decarbonization roadmap for the next 5 years9.7%Yes,we have a decarbonization roadmap that extends beyond 10 years16.1%Yes,we have a decarbonization roadmap for the next 10 yearsP 1 913 458 2000 E MediaI W Black&Veatch Corporation,2021.All Rights Reserved.The Black&Veatch name and logo are registered trademarks of Black&Veatch Holding Company.REV 2021-11LEGAL NOTICE Please be advised,this report was compiled primarily based on information Black&Veatch received from third parties,and Black&Veatch was not requested to independently verify any of this information.Thus,Black&Veatchs reports accuracy 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Black&Veatch2022-2023 Electric ReportRethinking theModern GridBLACK&VEATCH 2022-2023 ELECTRIC REPORT|ABOUT THIS REPORT|2About This ReportBased on a survey of roughly 250 U.S.power industry stakeholders,Black&Veatchs 2022-2023 Electric Report explores a sector transforming itself at an undeniably transformative time.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 industrys 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 industrys 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 industrys 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 MediaInfobv.ContentsExecutive Summary 4Money&Politics 1011Federal Funding and the Grid:Infusion of Investment Stirs Opportunity14Despite New Federal Funding for the Electric Sector,Investment Uncertainty LingersDecarbonization 1718Accelerating Decarbonization:Investments,Trade-offs and Technology Alternatives21Unrelenting Climate Change Presses Need for Grid Modernization,Resilience25Amid Decarbonization Momentum,Renewables Help Drive Electric Utility Sustainability Plans29Clean Energy Trends:Renewables,Battery Storage Lead the Way33With Momentum from Federal Funding,Vehicle Electrification Must Stoke Utility Planning,Investments37Energy Storage,Now(But Not Necessarily Here)40The State of Cybersecurity Technology in the Electric SectorAbout the Authors 43BLACK&VEATCH 2022-2023 ELECTRIC REPORT|CONTENTS|3Executive SummaryU.S.Electric Sectors Repowering Hinges on Grid Modernization,Renewable Energy Sources and StorageBy Laszlo von LazarSince its humble roots in the late 1800s,the U.S.electric grid has evolved,dutifully moving the electrons that did everything from powering the nations industrialization and wartime machines to being the lifeblood of todays 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 todays complex,diverse and unyielding challenges.Droughts,floods,wildfires,hurricanes and other extreme weather events attributed to climate change increasingly are straining the grid,stoking questions about its resilience.In May,Reuters reported that power outages have more than doubled in the past six years compared to the previous six,according to the media outlets examination of federal data.As the global push for decarbonization intensifies,the U.S.clean energy business power from the sun and the wind,both on land and offshore is booming,forcing utilities to sort out the strategy and investment needed to accommodate those green sources of power.Pressure to make that happen is coming from the top of the U.S.political establishment,with President Joe Bidens administration ambitiously wanting a decarbonized grid by 2035 and zero emissions economywide 15 years after that.The electrification of the nations transportation sector is accelerating,prompting the power sector to accommodate the ever-increasing charging demands now rivaling aging infrastructure as a chief concern of electric utilities.Regulations continue to shift in fueling uncertainties,and cyber threats havent abated,exposing grid vulnerabilities.All the while,new technologies such as hydrogen widely viewed as an ascending star in tomorrows energy ecosystem and wider use of battery storage and distributed energy sources are enjoying greater attention,giving utilities even more to think about as pressures mount for them to reimagine tomorrows diversified,balanced energy portfolios.ABOUT THE AUTHORLaszlo von Lazar is president of Black&Veatchs Energy&Process Industries(E&PI)business and serves on the companys board of directors and leadership team.Before being named to head E&PI,he was president of BV Operations and was a key architect in successfully establishing the group as part of a companywide transformation.Von Lazar joined Black&Veatch in 2019 to guide global projects for the companys previous power organization,for which he led engineering,procurement,construction,project controls,quality and business excellence.His 33 years of experience,including global project leadership for GE and Bechtel,comprises work in conventional power generation,solar and wind generation,transmission and distribution,oil and gas,and industrial markets.BLACK&VEATCH 2022-2023 ELECTRIC REPORT|EXECUTIVE SUMMARY|5Despite the headache-inducing headwinds,opportunity knocks,most notably in the infusion of hundreds of billions of dollars in available federal funding meant to modernize the grid to lower the United States carbon footprint.The Black&Veatch 2022-2023 Electric Report based on survey data from roughly 250 U.S.electric sector stakeholders details it all,shining a light on the power sector repowering itself to bolster its reliability,resilience and responsiveness.Grid Integration of Renewables,Aging Infrastructure Top ChallengesWith ever-widening adoption of renewable energy,it stood to reason that integrating green energy onto the grid last year surpassed aging infrastructure as the industrys top challenge for the first time in our reports in more than a decade.And it was no fluke.Renewable integration tied aging infrastructure atop the list this year,with roughly three in 10 survey responses citing either as their foremost challenge.Staffing issues continue to be a headwind,with a combined 43 percent either citing the lack of a skilled workforce(22 percent)or the industrys aging workforce(21 percent)as challenging.Environmental regulations drew one-quarter of the responses in rounding out the top five.Cybersecurity sixth in 2020 before rising to second last year fell to eighth this year at 18 percent,giving way to tightly grouped concerns about reliability(21 percent)and planning and forecasting uncertainty(19 percent)(Figure 1).By virtually any metric,the growth of renewable energy remains robust.In August,the U.S.Energy Information Administration(EIA)reported that renewable sources such as wind,solar and hydropower are expected to account for 22 percent of U.S.electrical generation,up from 20 percent each of the past two years.The EIA anticipates that figure will rise to 24 percent next year as other generation sources such as coal and nuclear are retired in some parts of the United States.BLACK&VEATCH 2022-2023 ELECTRIC REPORT|EXECUTIVE SUMMARY|628.7(.7%.3%RenewableintegrationAginginfrastructureEnvironmentalregulationsLack of skilled workforce.21.9%Aging workforce.21.1%Reliability.20.7%Planning/forecasting uncertainty.19.4%Cybersecurity.17.7%Distribution system upgradesand modernization.16.9onomic 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%Market structure.5.5cess to capital investment.3.0%Figure 1What are the top three most challenging issues facing the electric industry in your region today?(Select up to three)Source:Black&Veatch 53.6R.7%.4%Generation mix,with fewer traditionalbase load units and more utility scalerenewable sourcesTie:1.Lack of qualified workers to engineer,maintain andoperate the more complex system2.Regulatory lag in meeting the needs for system changesTalent availability.23.7ility 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%Supply chain issues for equipmentBLACK&VEATCH 2022-2023 ELECTRIC REPORT|EXECUTIVE SUMMARY|7Longer term,the EIA forecasts in its 2022 Annual Energy Outlook widely considered the gold standard of U.S.energy projections that the share of renewables in the U.S.electricity generation mix will more than double from last year to 2050.This comes as state and federal policies continue to incentivize investment in green energy resources for power generation and transportation fuels.New technologies are expected to continue driving down the cost of wind and solar generators,stoking their competitiveness in the electricity market.More than ever,given the robust projections for renewables,utilities will feel added pressure to bolster the flexibility and resilience of their grids,adding battery storage and advanced inverters to accommodate the rapid transition to a greener energy ecosystem.Promisingly,thats something clearly on the sectors radar.When asked about their top concerns for grid development over the next three to five years,more than half of respondents 53 percent pointed to the generation mix,with fewer traditional baseload units and more utility-scale renewable sources.Thats narrowly second only to supply chain issues for equipment(54 percent),a lingering headache from the global COVID-19 pandemic.Workforce issues again are worrisome to the survey takers.The lack of qualified workers to engineer,maintain and operate the more complex system came in a distant third at 25 percent tied with the regulatory lag in meeting the needs for system changes.Questions about the availability of talent made more acute by a tight job market and an ever-thinning pool of recruits who enjoy more career options and greater leverage for various reasons drew 24 percent,followed by the ability to invest in and maintain a more resilient grid(21 percent)(Figure 2).Yet when it comes to funding,at this crucial moment,theres reason for optimism,courtesy of federal taxpayers.Figure 2What are the top three biggest concerns for future grid development over the next three to five years?(Select up to three)Source:Black&Veatch Energy storageSolar(ground or roof)Microgrids and other DERsWind(onshore)HydrogenWind(offshore)Solar(floating)Gas-fired/LNG to powerNuclearGeothermalCoal-fired%Selecting More Investment Than Today0.5%4.7.6%8.9%5.1.2.2.4 .37.4T.1%Figure 3How do you expect new generation capacity investments to change over the next five years in your region?Source:Black&Veatch BLACK&VEATCH 2022-2023 ELECTRIC REPORT|EXECUTIVE SUMMARY|8Uncle Sams Help Spurs OpportunityDeep worries about the resilience of the U.S.grid,and the imperative to dramatically modernize it to bring about climate-resilient infrastructure while accommodating ever-growing charging needs of electric vehicles,have become a Capitol Hill priority.Federal lawmakers are aware of the enormous price tag that such long-overdue grid upgrades carry,and they have responded with a generational influx of funding and,by extension,optimism.With taxpayer help already in the pipeline through the$1.2-trillion Infrastructure Investment and Jobs Act(IIJA)signed into law by President Joe Biden in late 2021,the Inflation Reduction Act(IRA)enacted in August commits an additional$369 billion over the next decade to energy security and climate change efforts.The goal:reduce carbon emissions by 40 percent by 2030,though current investment in electric infrastructure to get there still doesnt match the need.Even so,survey respondents appeared forward-looking and receptive to greener energy sources when asked where theyll be investing more in generation capacity over the next five years in their regions.More than half 54 percent cited energy storage,outdistancing solar(37 percent),microgrids and other distributed energy resources(20 percent),onshore wind(16 percent)and hydrogen(19 percent),which has emerged as a rising star in tomorrows energy ecosystem.Nuclear power now accounting for one-fifth of the nations electricity supply drew 12 percent of responses amid renewed attention for its potential in helping reduce greenhouse gas emissions blamed for global warming and extreme weather events such as floods and wildfires(Figure 3).The Promise of HydrogenWhen it comes to what methods utilities expect to include in helping meet their clean energy and emissions reduction goals over the next decade and beyond,our survey showed a profound intention to migrate to a cleaner,greener energy landscape.Over the next 10 years,nearly 70 percent of respondents said they planned to make traditional fossil-fuel generation more efficient,though that approach drew only 16 percent of responses beyond that timeframe.Natural gas,favored by three-quarters of respondents for the next 10 years,slumped to 24 percent longer term.Sixty percent said they looked to retire fossil-fueled generation sites by 2032.Over the next decade,the energy sector expects solar(83 percent)and wind(70 percent)to help meet its clean energy goals or cut their emissions and carbon output,presumably because those options have established,matured technology and competitive costs.Those numbers drop to below 30 percent beyond 10 years,giving way to more deployments of hydrogen(60 percent)and battery energy storage at 64 percent,the most-cited option beyond the next decade amid expectations that the costs of those technologies at scale will continue to decline,widening adoption.At least for now,while utilities envision hydrogen as tomorrows transcendent energy source,the technology remains unproven.Still,ambitious projects underway hope to eliminate the uncertainty.A shining example:Black&Veatch announced earlier this year that it has been chosen by Mitsubishi Power Americas and Magnum Development to provide engineering,procurement and construction(EPC)services for what will be the worlds largest industrial green hydrogen production and storage facility.As the keystone of the Advanced Clean Energy Storage project in Delta,Utah,the hub will be adjacent to the Intermountain Power Agencys(IPA)IPP Renewal 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 before incrementally expanding to using 100 percent hydrogen two decades later.With a$504-million commitment from the U.S.Department of Energy,the 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,helping balance load and generation across time and space.While the Utah project illustrates the promise of tomorrows energy ecosystem,utilities,regulators and other industry stakeholders must commit to and collaborate on forward-thinking approaches that virtually are certain to be based on cleaner,greener options,using new strategies,access to technology,proactive investments and aggressive planning.BLACK&VEATCH 2022-2023 ELECTRIC REPORT|EXECUTIVE SUMMARY|9Black&Veatch announced earlier this year that it has been chosen by Mitsubishi Power Americas and Magnum Development to provide engineering,procurement and construction services for what will be the worlds largest industrial green hydrogen production and storage facility.BLACK&VEATCH 2022-2023 ELECTRIC REPORT|FEDERAL FUNDING|10Money&PoliticsBLACK&VEATCH 2022-2023 ELECTRIC REPORT|FEDERAL FUNDING|11Timing is everything,and the political whipsaw that was the summer of 2022 highlighted this in Technicolor.Each year,as we consider the topics and questions to be addressed in our annual Black&Veatch Electric Report,we understand were capturing a moment in time in the perspectives of our survey respondents.For a section focused on the potential impact of government funding including the Infrastructure Investment and Jobs Act(IIJA)on the future of the grid,our timing arguably couldnt be worse.How so?After weeks of careful planning,imagine our surprise as our survey launched to reports that the remaining clean energy elements of the“Build Back Better”framework were dead in the water,only to close it out a few weeks later with late-breaking word the Manchin-Schumer“Inflation Reduction Act”was alive and well,ultimately making its way through Congress and being signed into law.With that backdrop in mind,we were struck by several themes emerging in 2022,including that government funding though the IIJA is expected to play a role in underpinning investment decisions for nearly 60 percent of respondents.This includes nearly two-thirds of those serving less than 2 million customers,demonstrating a favorable outlook on the role of federal funding in their planning.Optimistically,given the broad financial incentives targeting clean energy in the Inflation Reduction Act,and its passage through budget reconciliation,we expect these figures would reflect even greater optimism in a follow-up survey(Figures 4&5).Federal Funding and the Grid:Infusion of Investment Stirs OpportunityFigure 4To what extent are you counting on IIJA(or Bipartisan Infrastructure Legislation)grant funding to drive or underpin your investment decisions?(Select one)Source:Black&Veatch Figure 5What are the main reasons your organization has not taken advantage of some of the Infrastructure Investment and Jobs Act(IIJA)?(Select one)Source:Black&Veatch Administrativelytoo burdensomeToo complicatedPrograms aretoo restrictiveWe dontneed theseprogramsLack of awarenessof those programs322 $.4%We do not expect funding to driveany of our investment decisions4.3%We expect funding to drive themajority of our investment decisionsWe expect funding to drive someof our investment decisions55.3%BLACK&VEATCH 2022-2023 ELECTRIC REPORT|FEDERAL FUNDING|12For as much as the electric sector seeks to decide its own fate,policy and regulatory uncertainty represent the greatest factors impacting decisions to invest in electric sector infrastructure,followed closely by concerns over technology time horizons.Simply put,political decisions being made to drive decarbonization and evolve the regulatory compact reshape how service providers can look at a range of capital and operational expense planning scenarios.For example,in California,the state acknowledges its need to deploy large-scale natural gas technologies to 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).Timing aside,when it comes to expectations of how and where IIJA funding for grid-related projects will be prioritized,two areas EV charging infrastructure and energy storage were clear winners.This is consistent with the considerable efforts of the Biden Administration 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 EVs entering service and provide a significant business opportunity to a market that experienced years of flat load growth is not lost on industry stakeholders.Similarly,awareness of the critical role energy storage will play in providing grid-balancing support comes as the pace of renewable energy deployment accelerates.Grid resilience to climate impacts,cybersecurity and a series of interconnected elements round out a range of choices reflecting the competing priorities within the broader grid modernization effort(Figure 6).Figure 6What are the top three priorities for your organization,if IIJA funding is granted?Source:Black&Veatch Figure 7Which factors drive the highest uncertainty in your investment decisions?(Select all that apply)Source:Black&Veatch Grid cybersecurityMicrogrids and distribution infrastructureImproved DER integrationOtherReliability for underserved communitiesFiber network communications technologyEnhance grid physical security measuresDigital transformation for resiliencyNon-wired alternatives22.2.2.5.5.8.1%3.7%3.7%3.7%EV charginginfrastructureBatteries and long-duration storageGrid resiliency toclimate impacts63U.6).6u.7 .4H.6%Policy or regulatoryuncertaintyTechnology readinessor longevityFundingavailabilityClimate riskimpactsUndepreciatedexisting assetsBLACK&VEATCH 2022-2023 ELECTRIC REPORT|FEDERAL FUNDING|13One area where respondents are shedding significant insight relates to the ongoing challenges the Department of Energy(DOE)faces in streamlining the complex process of securing government funding for energy projects.Fully 35 percent of survey participants indicated their organization would not pursue funding due to factors ranging from lack of awareness to overly restrictive conditions or administratively burdensome applications.With the passage of the Inflation Reduction Act,the DOE now has roughly$110 billion in loan authority to support innovative clean energy,advanced transportation and tribal energy projects.But to receive funding,the DOE must be comfortable with a project plan that addresses everything from design through commercial operation.The DOEs commitment of$504 million for the Advanced Clean Energy Storage green hydrogen production and storage project in Delta,Utah,reflected their confidence in the comprehensive framework the development partners and engineering,procurement and construction(EPC)provider developed to meet their standards.Working with stakeholders who understand the DOEs approval processes will 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 COVID-19 pandemic,are top of mind for more than three-quarters of 2022 respondents.This reflects the industrys effort to ensure that breakthroughs in clean energy will be deployed and benefit low-income communities in both urban and rural parts of the nation.From a funding perspective,which cannot be overlooked as typically the most challenging aspect in developing next-generation infrastructure programs,billions of dollars in investment will be fueled by tax credits,loan programs and direct investment from the American taxpayer.This effort to modernize our grid reflects the type of transformative,Hoover Dam-like project that will reimagine countless sectors and decarbonize the U.S.economy.This effort to modernize our grid reflects the type of transformative,Hoover Dam-like project that will reimagine countless sectors and decarbonize the U.S.economy.BLACK&VEATCH 2022-2023 ELECTRIC REPORT|INVESTMENT UNCERTAINTY|14With most capital investments in the power sector typically measured in multi-decade terms,how do service providers balance the necessity for long-term planning and the need to achieve near-term goals associated with changing policies,decarbonization objectives and an increasing need for resilience?And with the relentless surge of renewables,how do U.S.electric utilities find ways to integrate it all onto the grid a task that our survey of about 250 power sector stakeholders cite for the second consecutive year as their top challenge,along with aging infrastructure?Funding from the Infrastructure Investment and Jobs Act(IIJA),also known as the Bipartisan Infrastructure Law and signed into law in November 2021,certainly helped impact at least some of this investment decision-making by virtue of the$107 billion it ultimately will provide in funding and incentives for clean energy,power and electricity grid reliability projects.The more recently enacted Inflation Reduction Act(IRA)approved by Congress and signed into law in August provides another$369 billion in funding incentives for clean energy,arguably making it the most impactful piece of energy policy ever enacted in the United States.Despite New Federal Funding for the Electric Sector,Investment Uncertainty LingersBLACK&VEATCH 2022-2023 ELECTRIC REPORT|INVESTMENT UNCERTAINTY|15One example highlighting this“power of policy”:Prior to the passage of the IRA,our survey queried respondents on which types of projects they would prioritize if the legislation was approved.Resoundingly,two of the project types featured 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).Even though our survey was completed prior to the IRAs enactment,its clear this landmark legislation will have an even greater influence and impact.Yet despite nearly a half-trillion dollars across both bills in total funding intended to further catalyze the energy transition,uncertainty among decision makers still abounds.Affordability,shifting public perceptions,political instability,stranded asset risks,regulatory jurisdictional differences and technology uncertainty all factor into play.To wit,three-quarters of respondents said the inability to predict future policy and regulatory changes makes investment decisions difficult.Six in 10 cited concerns about the readiness or longevity of certain technologies as a challenge,and nearly one-half cited lack of clarity around funding sources as problematic(Figure 9).As one respondent noted,these days it can sometimes feel like 20-year utility resource plans need to be updated every two years.Nevertheless,some broad patterns are emerging.Figure 8What are the top three priorities for your organization,if IIJA funding is granted?Source:Black&Veatch Figure 9Which factors drive the highest uncertainty in your investment decisions?(Select all that apply)Source:Black&Veatch Grid cybersecurityMicrogrids and distribution infrastructureImproved DER integrationOtherReliability for underserved communitiesFiber network communications technologyEnhance grid physical security measuresDigital transformation for resiliencyNon-wired alternatives22.2.2.5.5.8.1%3.7%3.7%3.7%EV charginginfrastructureBatteries and long-duration storageGrid resiliency toclimate impacts63U.6).6u.7 .4H.6%Policy or regulatoryuncertaintyTechnology readinessor longevityFundingavailabilityClimate riskimpactsUndepreciatedexisting assetsBLACK&VEATCH 2022-2023 ELECTRIC REPORT|INVESTMENT UNCERTAINTY|16Over the near term the next five years respondents are particularly bullish about solar and wind projects,as well as fleet electrification.Sixty-four percent expect to invest in solar projects,and roughly 40 percent plan to earmark funds for wind and/or EVs(Figure 10).These findings appear to validate predictions by the U.S.Energy Information Administration that solar power generation will outstrip wind power generation by a factor of two by 2040.Solar,wind and EVs remain popular priorities for respondents when asked to look further out into the horizon beyond five years.But the survey shows that other technologies not presently commercially viable stand to garner more investments as time passes.For instance,while only 13 percent of respondents intend to invest in hydrogen over the next five years,more than 22 percent expect to invest in it in the long term.Similarly,only 9 percent of respondents plan to invest in small modular reactors in the short term,but more than 22 percent expect to allocate dollars on that energy source beyond five years from now.Balanced Planning,Decisions EssentialAs the sector transforms at such a dizzying rate,mandates and ambitious decarbonization targets have brought clean energy forces to the forefront as a solution.Integrating that green energy onto the grid and finding ways to pay for it while hardening infrastructure assets against extreme weather and other threats present some of the industrys most-pressing challenges.Now more than ever,utilities again must balance long-term investments with an open eye on short-term,emerging needs as a continuous process,unlike previous decades of resource planning in this industry.Perhaps by leveraging Black&Veatchs expertise,utilities should embrace the importance of an early,integrated and executable strategy that combines strategic,financial,regulatory,technical and digital considerations.Figure 10Which 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 64.0.08.73.3).33.3.3.3%9.3.7.3%8.0.7!.3 %8.0d.2F.3D.8.3(.4#.9.4.4 .9.9.9.9.9.9.9.4%9.0%SolarWindTransportation fleet electrification and/or charging infrastructureDistributed energy storageConventional generationDistributed energy resources management system(DERMS)HydrogenDistributed generationSmall modular reactorsAdvanced distribution management system(ADMS)MicrogridsHydrogen-fueled combustion turbinesCentral plant efficiency or environmental upgradesFault Location Isolation and Service Restoration(FLISR)Volt/VARDynamic line ratingsFlexible alternating current transmission system(FACTS)Near termLong termDecarbonizationViewed a half century ago as the energy source of the future,hydrogen applications are emerging as a critical and viable solution to help companies across many sectors achieve their decarbonization goals.Some proof:The worlds 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-billion-dollar conditional loan guarantee for that planned green hydrogen hub meant to convert renewable power to hydrogen,store it underground and use it to generate power.The first customer of that Advanced Clean Energy Storage project will be the Intermountain Power Agency(IPA)the power supplier to Utah and Los Angeles.Also underway at IPA is the first power plant conversion to 100 percent hydrogen by 2045.With that as context,we examine the role that hydrogen as well as wind,solar,natural gas and batteries for storage will play as the industry continues to sharpen its focus on achieving decarbonization at scale.What about other sources?Where does nuclear fit in?And what about carbon capture?Utilities,asset owners and companies across sectors are undertaking concerted efforts to analyze which technologies and low-carbon fuels will allow them to achieve their emissions reduction goals,and the answers may be different depending on portfolio,risk appetite and geography.But whats undeniable is that the industry finally has reached a consensus understanding that decarbonization must happen and soon.Our survey of some 250 U.S.power sector stakeholders for Black&Veatchs 2022-2023 Electric Report shows that now more than ever,utilities are feeling significant pressure from multiple external sources including policy makers,customers,regulators,and investors(in that order)to get it done.(Figure 11).BLACK&VEATCH 2022-2023 ELECTRIC REPORT|DECARBONIZATION|18Accelerating Decarbonization:Investments,Trade-offs and Technology Alternatives37.7$.5.9.9%PolicymakersCustomersRegulatorsInvestorsFigure 11From which of the following does your organization feel the greatest pressure to be committed to decarbonization?(Select one)Source:Black&Veatch investment returns(Figure 12).Promisingly,that number has decreased from past surveys.Hydrogen,as previously mentioned,is one alternative fuel that will be an important consideration as companies look across their portfolio,assets and trade-offs.As a leader in the hydrogen power generation industry,Black&Veatch is bullish on its potential but also recognizes that adoption of the technology has not yet been demonstrated to be advantageous on technical and economic bases across a wide spectrum of geographies.Perhaps unsurprisingly,many survey respondents are continuing to take a wait-and-see approach,with more than 41 percent saying that hydrogen“might or might not”be a viable means of long-duration energy storage compared to more traditional technologies.That said,survey respondents also shared their growing YesNo61.18.9%BLACK&VEATCH 2022-2023 ELECTRIC REPORT|DECARBONIZATION|19With the“Inflation Reduction Act”signed into law Aug.16 by President Joe Biden and its clean energy provisions now a matter of policy,additional funding and tax credits to allow firms to further accelerate the pursuit of lower-carbon fuels and technologies have been formalized.The Biden administrations 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?Outlook:Renewables Rule,With Hydrogen the Rising StarElectrification increasingly has been a focus to deliver power from a range of renewable energy resources and low-carbon fuel sources.Thats particularly true when considering transitioning fleet and passenger vehicles away from the combustion of fossil fuels.However,substantial reforms are required to address challenges such as aging infrastructure and onerous interconnection queues.Survey respondents view the role of electrification as complementary to other low-carbon fuels and technologies.However,the timeline and runway to transition to low-carbon fuels and carbon capture solutions,while under review by most companies,vary across different planning horizons.Roughly 40 percent of survey respondents currently are not incorporating non-electric means of decarbonization as complementary to their electrification,due to commercial viability and Figure 12Do you view non-electric means of decarbonization(e.g.,low-carbon fuels,CCUS,etc.)as complementary to your current electrification efforts?(Select one)Source:Black&Veatch The Biden administrations 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|20excitement 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.Figure 13Do you view hydrogen as a viable means of long-duration energy storage in your service territory to more traditional technologies(e.g.,batteries,pumped hydroelectric,etc.)(Select one)Source:Black&Veatch 41.3%Might or might not26.6%Probably yes15.6%Probably not14.7finitely yes1.8finitely notAlready grappling with wildfires in the West,the unceasing threat of hurricanes along the eastern seaboard and ravaging drought in between,U.S.electric utilities seeing climate change test their grids cant escape the drumbeat of news warning that the headwinds may only worsen.That latest harbinger came in August,when the nonprofit First Street Foundation research group unveiled a peer-reviewed report suggesting an“extreme heat belt”is forming,stretching from Texas,Louisiana and the Southeast north to Wisconsin.The corridor covering one-quarter of the countrys land mass reportedly would affect 107 million people over the next three decades,bringing upticks in the number of days with the heat index the combination of air temperature and humidity above 100 degrees,challenging the electric infrastructures ability to keep air conditioners running,much less withstand the heat itself on an aging grid.On the heels of a July that the National Oceanographic and Atmospheric Administration said was the countrys third-hottest since record-keeping began nearly 130 years ago,the foundations report adds grist to the call for the U.S.power sector to ramp up their resiliency against escalating effects of a warming climate.None of that appears lost on the U.S.electric industry,Black&Veatchs 2022-2023 Electric Report finds.Among roughly 250 power sector stakeholders surveyed,roughly three in 10 respondents 28 percent point to heat as the climatological event posing the biggest risk for delivering reliable system operations in the next three to five years.Cold and ice drew 19 percent of the responses,followed by wildfires(14 percent)and hurricanes(11 percent).But what are utilities doing long-term to harden their systems against climate change?The findings may be surprising,given the warnings.No Silver BulletNoting that U.S.power outages from extreme weather have doubled over the past two decades,the U.S.Department of Energy warned in July that“as much of the U.S.now braces for hurricane season,soaring temperatures and wildfires,climate change is threatening the reliability of our current power system.Business-as-usual planning and operations are insufficient to produce resiliency against these threats.”“There is no silver bullet technology to guarantee a reliable system,and every resource and system is at risk for failure:coal or natural gas fuel supplies can freeze,extended periods of low wind resource can occur,and transmission lines can fail,”the DOE added.“Reliability and resilience of the system stems from a portfolio of technologies and strategies that limits exposure to common risks and includes forward planning that considers the evolving threats from climate change,extreme weather and other unknown sources.”BLACK&VEATCH 2022-2023 ELECTRIC REPORT|CLIMATE CHANGE|21Unrelenting Climate Change Presses Need for Grid Modernization,ResilienceBLACK&VEATCH 2022-2023 ELECTRIC REPORT|CLIMATE CHANGE|22Such look-ahead approaches could and should start with infusing extreme climatological event mitigation into long-term system strategies;however,just one-third of survey respondents confirm theyre doing this.Twenty-eight percent say theyre not including it,while four in 10 say they simply dont 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 lack of regulatory certainty about how such plans might be received.U.S.power utilities are keenly aware of the impact 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 advance of the storm,hastening response time when disruptions happen.Climate Mitigation:An Abundance of Options Yet not planning appropriately even aggressively for weather scenarios can exact a steep price.Case in point:The powerful,deadly winter storm in February 2021 that blanketed much of Texas with snow,ice and record low temperatures,disrupting power to 5 million people while wreaking havoc on water service.Such disasters prove to be eye-openers for utilities,awakening them to extreme weathers consequences,the prudency of hardening their systems against it and the need to commit to the sizable investment to make it happen.While the possible scenarios are numbingly countless,half of the surveys respondents say their utility does climate-related disaster scenario planning to prepare for potential disruptive events.An additional 23 percent acknowledge they dont perhaps given that storms seldom are the same,and its impossible to account for anything and everything that might transpire when it comes to climate,which itself can be acutely abstract.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).52.64.71.6d system redundancy/alternate sourcesImplement demand responseand energy efficient programsPerform more aggressivevegetation managementImplement freeze protection/winterization upgrades.27.4%Invest in generation sources thatare less dependent on water supply.23.2vanced grid control systems.22.1%Enhanced transmission and distributionplanning to the feeder level.22.1%Harden distribution by increasing sectionalizing/automation schemes.14.7%Harden distribution by undergroundingof overhead circuits.13.7%Harden distribution by strengthening/insulating overhead circuits.12.6%Encourage/develop distributed energyresources as non-wired alternatives.12.6%Figure 14What are the top three strategies or risk mitigation that you are using to address the impacts of climate change?(Select top three strategies)Source:Black&Veatch BLACK&VEATCH 2022-2023 ELECTRIC REPORT|CLIMATE CHANGE|23Making the Case for Funding,InvestmentWhile 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 utilitys 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,with priorities and internal buy-ins,the difficulty in modeling future weather events,and technology advancements tightly grouped around 31 percent(Figure 15).When it comes to best justifying the expense of climate change and resilience projects,it appears to be all about data.Roughly one-third of respondents cited modeling and risk analysis or cost tracking to show cost recovery or system operational improvements as the top two effective ways to make a case for such undertakings(Figure 13).One in five pointed to case studies and the precedence of peer utilities,though citing what others have done may hold less sway with regulators or other stakeholders in light of each utilitys varying and sometimes unique local and regional operational nuances.Uncle Sam Steps In:A Time for Optimism,ActionThe U.S.electric sector,long having wrestled with ever-aging infrastructure without adequate funding to modernize it,is getting some help from federal taxpayers.Figure 15What are the biggest hurdles to obtaining investment in climate-related mitigation measures?(Select all that apply)Source:Black&Veatch Regulatoryscrutiny/rate caseapprovalPriorities/internalbuy-inDifficulty inmodelingfutureweathereventsTechnologyadvancementSupplychainEquipmentConstructionlaborresources44.320.90.9(.9.5.4%BLACK&VEATCH 2022-2023 ELECTRIC REPORT|CLIMATE CHANGE|24Signed into law by President Joe Biden in November 2021,the$1.2-billion,bipartisan Infrastructure Investment and Jobs Act(IIJA)earmarks$73 billion for grid upgrades,including the buildout of thousands of miles of new,resilient transmission lines to help expand renewable energy ostensibly meant to mitigate climate change.That single biggest federal investment in power transmission in U.S.history comes at a time of runaway expansion of renewables.Then in August,the“Inflation Reduction Act”became the single biggest climate investment commitment in U.S.history,with$369 billion over 10 years devoted to climate and clean energy provisions.That includes some$30 billion in grant and loan programs for electric utilities and states to advance the transition to cleaner,greener energy.All of it is rooted in the premise that climate change is real,and the time to act is now.Forward-thinking utilities can and should embed climatic modeling into their road-mapping now,appreciating the mantra that“if you cant measure it,you cant manage it.”With a myriad of climate-mitigation approaches at their disposal,utilities also would be wise to rethink their old planning approaches to avoid risk,ensure greater resilience and prioritize such projects.Granted,climate models still hold uncertainties.The only thing that is clear is that weather stops for nothing and no one.322 .6%8.2%5.2%2.1%Modeling/risk analysisCost tracking to show cost recovery/system operational improvementsApplication of case studies and precedence from other ownersDemonstration of how projects are prioritizedChanges in insurabilityOtherFigure 16What are some effective ways to justify the expense of climate change/resilience projects?(Select one)Source:Black&Veatch BLACK&VEATCH 2022-2023 ELECTRIC REPORT|SUSTAINABILITY|25Amid Decarbonization Momentum,Renewables Help Drive Electric Utility Sustainability PlansSecond only to transportation as the biggest source of U.S.greenhouse gas emissions,the nations electric utilities are aligning around energy mix adjustments sought by regulators,consumers and shareholders to get greener by infusing more renewables into todays energy ecosystem.In modern lexicon,thats decarbonization.By extension,its sustainability,a noble pursuit requiring thoughtful roadmaps of how to lower carbon footprints while still meeting shifting customer demands,keeping costs in check and embracing innovation.Black&Veatchs 2022-2023 Electric Report and its survey of about 250 U.S.power sector stakeholders bring such sustainability challenges into focus.A glaring takeaway:as the industry continues to wean itself of fossil fuels largely in the form of coal and natural gas accounting for roughly 60 percent of U.S.electricity in 2020 low-carbon energy from the wind and the sun is helping fill the void.All the while,hydrogen and battery storage are enjoying a wider spotlight for their promise in tomorrows energy mix.Left to question,at least for now,is sustainability of the energy transition and what combination of technologies will support reliable delivery of electricity to consumers.Out with the Old,In With the Re(New)ablesWithout question,sustainability pursuits through decarbonization remain top of mind in the industry.More than three-quarters of respondents to Black&Veatchs survey have goals involving adopting more clean energy and renewables or reducing carbon or greenhouse gas emissions,with roughly half of them saying such aspirations are separate from any regulatory mandate.In other words,theyre commendably proactive.So what energy options do they deem most favored in achieving such goals over the next decade,then beyond?At least until 2032,83 percent of respondents cited solar power,77 percent pointed to natural gas and 70 percent said wind energy as their top methods,followed closely by battery energy storage(66 percent),and combined cycle at 64 percent.BLACK&VEATCH 2022-2023 ELECTRIC REPORT|SUSTAINABILITY|26Looking 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 NowUnderscoring optimism about tomorrows 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 Making traditional fossil-fueled generation more efficientRetiring traditional fossil-fueled generation sitesHydrogenWindSolarNatural gasRenewable natural gasCombined cycleBattery energy storagePower purchase agreements(PPAs)Long duration energy storage(LEDS)Other68.6Y.8H.0i.6.3v.5U.9c.7e.7c.72.4.7.09.5Y.3(.4(.4#.50.9#.5P.6.2d.2.5%Next 10Beyond 10Figure 17Which 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 BLACK&VEATCH 2022-2023 ELECTRIC REPORT|SUSTAINABILITY|27in the form of hydrogen,followed closely by funding availability for long-term energy storage projects(39 percent)and expansion of fuel cell use e.g.hydrogen fuel cells at 36 percent.Like hydrogen,long-duration energy storage remains unproven,tamping down commitments to either for now(Figure 18).But in the western United States,an ambitious effort now underway could sort it all out,offering a peek at what tomorrows energy picture may look like.Earlier this year,Black&Veatch announced it has been chosen by Mitsubishi Power Americas and Magnum Development co-developers of what will be the worlds largest industrial green hydrogen production and storage facility 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 Agencys(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 SamLong 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 Figure 18Do you view hydrogen as a viable means of long-duration energy storage in your service territory to more traditional technologies(e.g.,batteries,pumped hydroelectric,etc.)(Select one)Source:Black&Veatch 41.3%Might or might not26.6%Probably yes15.6%Probably not14.7finitely yes1.8finitely notBLACK&VEATCH 2022-2023 ELECTRIC REPORT|SUSTAINABILITY|28sites,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.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.BLACK&VEATCH 2022-2023 ELECTRIC REPORT|CLEAN ENERGY TRENDS|29As decarbonizing takes a deepening root around the globe,clean energy solutions such as wind and solar power complemented by battery storage quickly are becoming more of a fixture in todays energy ecosystem.That landscape cannot continue to evolve without the help of utilities,and its crucial for them and their stakeholders to understand clean energy trends to reach a net-zero future.Decarbonization will require integrating more renewable energy onto the grid,which has recently 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.Again,that parity remains this year.In our survey of about 250 electric industry stakeholders for Black&Veatchs 2022-2023 Electric Report,roughly one in three respondents(29 percent)ranked renewable energy integration as their top challenge,tied with aging infrastructure.While renewable integration remains in the No.1 spot,fewer respondents are concerned about it than in last years report,where a whopping 34 percent voted for it(Figure 19).The lowered percentage from last year may indicate that there is an increasing migration to an Clean Energy Trends:Renewables,Battery Storage Lead the Way28.7(.7%.3%Renewable integrationAging infrastructureEnvironmental regulationsLack of skilled workforce.21.9%Aging workforce.21.1%Reliability.20.7%Planning/forecasting uncertainty.19.4%Cybersecurity.17.7%Distribution system upgradesand modernization.16.9onomic 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%Market structure.5.5cess to capital investment.3.0%Figure 19What are the top three most challenging issues facing the electric industry in your region today?(Select up to three)Source:Black&Veatch BLACK&VEATCH 2022-2023 ELECTRIC REPORT|CLEAN ENERGY TRENDS|30awareness of renewables among utilities a promising sign for the future of green energy.However,it should be mentioned that last year,the 2021 Electric Report survey was released last November around the time of hope albeit waning that the massive“Build Back Better”spending plan targeting physical infrastructure improvements would get through Congress,and responses may have reflected optimism.At that time,renewables were top of mind for utilities.By comparison,this years report survey was released before a far narrower version of Build Back Better was hammered out and eventually signed into law by President Joe Biden in August,perhaps negatively skewing survey responses slightly.Nevertheless,the numbers still show utilities growing emphasis on renewable generation capacity.Upgrading the Power GridWhile the future of renewable energy continues to gain more acceptance among utilities,the power grid needs a major upgrade to accommodate the energy transition.And such grid modernization certainly will present its own challenges.According to survey respondents,the top two concerns for future grid development over the next three to five years are supply chain issues(54 percent)and generation mix(53 percent).These concerns arent minor,considering that their percentages nearly double any other option on the list.With the supply chain crisis ongoing at the time of this report,that number isnt too surprising.Planning for Decarbonization 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|31solar,microgrids and energy storage are leading the charge in what respondents say theyll spend much more or somewhat more on.These results arent 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 EnergyWhen 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 Coal-firedGas-fired/LNG to powerSolar(ground mount or rooftop)Solar(floating)Wind(onshore)Wind(offshore)Energy storageMicrogrids and other DERsNuclearGeothermalHydrogenCoal-fired with CCUSGas-fired/LNG to Power with CCUSMuch moreinvestment than todaySomewhat more investment than todayAbout the same investment as todaySomewhat less investment than todayMuch less investment than today 1.5%0.5.9.9Y.2%8.92.7.38.1%5%2T.14.1%9.3%.51.3.9%7%9A.82.2.33.2.9%2.5%3.5%5.11.3.9.2%9.8%7.8.1.6%4.7%9%9.5G.2.6.6%5.45.35.8%7.5.28.6%.9%7.6.77.48.8%1.9.4%2.4).7%5.1G.7%8.7%8.7%2$.9 .3P.3%2.5%Figure 20For 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 14 percent in the short term and 22 percent past five years,while distributed energy storage rose to 40 percent,from 33 percent.(Figure 21).Longer term looking out the next five years to a decade in actual investment spending respondents appear to be prioritizing big investments(those of more than$10 million)in conventional generation while increasingly aligning behind energy from wind,the sun,hydrogen and small modular nuclear reactors.As is the case for many technologies,they often start out slow and pick up momentum at the drop of a hat.A few decades ago,light-emitting diodes(LED)took a room full of equipment and tens of thousands of dollars to get a fraction of a lumen of light.Now people can buy a string of 100 for a dollar during Christmas time.The same can be said for clean energy technology,where theres a consistent positivity surrounding renewables that wasnt there just 20 years ago.That appears true about hydrogen,a technology prone to skepticism today but poised to become the next big trend a decade or 15 years from now.The fact of the matter is,decarbonization is on the minds of nearly every utility right now.And while utilities may be adopting new technologies at different rates,the enthusiasm towards renewable energy is ever-present and building.Energy Storage in PowerAs renewable solar and wind developments continue their rapid growth across the country,energy storage increasingly is viewed as a critical component to decarbonization,given that the intermittency of renewables means there are times days or even weeks when there wont be the appropriate amount of generation throughout the day to satisfy load needs.While at first glance it may appear that the two key energy storage technologies battery energy storage systems(BESS)and hydrogen are in competition,the two technologies in important respects are complementary to each other,particularly suited to addressing hourly and daily shifting versus longer duration and seasonal shifting of energy supplies,respectively.The two can be used in tandem to maximize the value of electrons from green energy.The investment tax credits and production tax credits made available to BESS and clean hydrogen in the Inflation Reduction Act would be significant as it would materially reduce the cost of both energy storage technologies and resultingly improve the resiliency of the grid.Investment spending in both technologies could continue to increase in utilities planning budget.BLACK&VEATCH 2022-2023 ELECTRIC REPORT|CLEAN ENERGY TRENDS|32Figure 21Which 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 64.0.08.73.3).33.3.3.3%9.3.7.3%8.0.7!.3 %8.0d.2F.3D.8.3(.4#.9.4.4 .9.9.9.9.9.9.9.4%9.0%SolarWindTransportation fleet electrification and/or charging infrastructureDistributed energy storageConventional generationDistributed energy resources management system(DERMS)HydrogenDistributed generationSmall modular reactorsAdvanced distribution management system(ADMS)MicrogridsHydrogen-fueled combustion turbinesCentral plant efficiency or environmental upgradesFault Location Isolation and Service Restoration(FLISR)Volt/VARDynamic line ratingsFlexible alternating current transmission system(FACTS)Near termLong termBLACK&VEATCH 2022-2023 ELECTRIC REPORT|VEHICLE ELECTRIFICATION|33Its 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 proving ever more crucial in helping mitigate climate change.And utilities must answer the call in delivering the energy needed for that evolving transportation mix turning cleaner and greener by the day.More electric vehicles are on the road,and companies such as Amazon and FedEx are taking action by electrifying their large vehicle fleets.On the funding side,the Infrastructure Investment and Jobs Act(IIJA)included significant funding to support and incentivize the buildout of electric vehicle charging infrastructure,and the newly passed“Inflation Reduction Act”expands tax credits for the purchase of new electric vehicles.Black&Veatchs 2022-2023 Electric Report based on expert analysis of a survey of about 250 U.S.electric sector stakeholders illustrates that vehicle and fleet electrification is top of mind.However,more education among utilities and clarity around budgeting and planning are necessary pieces to the puzzle that,when complete,potentially can make significant advances to the industry.As the world pushes to decarbonize,electric vehicles are proving ever more crucial in helping mitigate climate change.And utilities must answer the call in delivering the energy needed for that evolving transportation mix turning cleaner and greener by the day.With Momentum from Federal Funding,Vehicle Electrification Must Stoke Utility Planning,InvestmentsBLACK&VEATCH 2022-2023 ELECTRIC REPORT|VEHICLE ELECTRIFICATION|34New Funds Pave the Way for Lasting Change Utilities understand that loads are shifting away from fossil fuels towards cleaner forms of energy,and the move to electric vehicles isnt just a trend or a key part of climate change mitigation;its a durable market that must be prioritized to remain relevant and competitive.The United States is at a tipping point of EV adoption,meaning theres a huge opportunity for utilities to be the Swiss army knife the country needs to meet the Biden Administrations goal that half of all new U.S.vehicle sales be zero-emission by 2030.Electric vehicle and fleet charging infrastructure is imperative to achieving that goal,and with billions of dollars in available funding,utilities want their fair share.When asked about the top three priorities for their organization if IIJA funding is granted,EV charging infrastructure received the highest marks,with 63 percent of respondents noting that it would be a top priority(Figure 22).Couple that sentiment with the fact that 39 percent of respondents intend to make investments in transportation fleet electrification and/or charging infrastructure in the next one to five years,and its clear this issue is top of mind for utilities,and planning is underway.When asked how much money their organization is planning to invest in transportation and fleet electrification and/or charging infrastructure 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 arent sure how much money theyll devote to that.While the funds are available and money is earmarked for electrification and charging infrastructure,questions remain about how best to budget that money as well as to accurately forecast the load requirements coming down the pike.Figure 22What are the top three priorities for your organization,if IIJA funding is granted?(Select three options)Source:Black&Veatch Grid cybersecurityMicrogrids and distribution infrastructureImproved DER integrationOtherReliability for underserved communitiesFiber network communications technologyEnhance grid physical security measuresDigital transformation for resiliencyNon-wired alternatives22.2.2.5.5.8.1%3.7%3.7%3.7%EV charginginfrastructureBatteries and long-duration storageGrid resiliency toclimate impacts63U.6).6%BLACK&VEATCH 2022-2023 ELECTRIC REPORT|VEHICLE ELECTRIFICATION|35The Need for Education,Effective Forecasting While the survey demonstrates robust plans for investment in vehicle and fleet electrification and required charging infrastructure,the data turns murky when respondents weighed in about how much of their forecasting for future load is integrated into the expectation for vehicle electrification.More than four in 10 respondents 44 percent replied that at least some of their forecasting included vehicle electrification and fleets,while 22 percent said none of their forecasting involves vehicle and fleet electrification.Twenty-four percent said they dont know(Figure 23).This begs the question:if utilities are planning to invest in this area,as the survey results clearly illustrate,why arent they planning to accommodate the increased demand for electricity that these investments in EV charging buildout will inevitably require?What might explain this disconnect?One answer is that its hard to predict the future.Load forecasters have a difficult job,and their predictions can drive billions of dollars in investments and real changes to electricity rates.Estimate too high,and a utility has stranded assets and unnecessarily high rates.Estimate too low,and the utility risks not having enough power to serve its customers.Since the 2008 financial crisis,the usual link between growth in the gross domestic product(GDP)and electricity demand has decoupled.This means that even though the economy is growing,a utility shouldnt necessarily assume that this will result in higher electricity demand as our economy has de-industrialized and things have become more efficient.The period of flat load growth has made load forecasters more cautious when forecasting future load.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 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 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)and Level 3(38 percent increase)charging sites requests.Some NoneMajorityDontknow44.2.1$%9.6%Figure 23How much has your forecasting for future load integrated the expectation for the vehicle electrification,including fleet?(Select one)Source:Black&Veatch BLACK&VEATCH 2022-2023 ELECTRIC REPORT|VEHICLE ELECTRIFICATION|36Black&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 states 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 cant 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 wont be sustainable without proper charging infrastructure.No Time to be PassiveWith 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 its 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&Veatchs survey say theyre ready to enable new EV loads over the next year.Breaking that down further,22 percent say theyre ready now,15 percent say theyll be good to go in less than six months,and 14 percent saying theyll 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.Energy Storage,Now(But Not Necessarily Here)BLACK&VEATCH 2022-2023 ELECTRIC REPORT|ENERGY STORAGE|37In what is a first in the more than 15-year history of Black&Veatchs annual electric report,we begin this preview section with a disclaimer:How were we supposed to know that the most significant energy policy legislation in generations would go from“not happening”to“lets wrap it up before the August recess”by Congress,right in the midst of our survey period?Besides the obvious“its not our fault”elements,we note this for a specific purpose:While many of this years responses regarding energy storage reflect a positive sector outlook,we feel our data likely reflects some negative bias later mitigated by the August signing of the Inflation Reduction Act(IRA).The IRA package is critical as electric grids across the United States creak under the strain of excessive heat,droughts,aging infrastructure and the challenges of renewable integration.Across respondent groups,energy storage is viewed as having a critical role in supporting decarbonization plans by boosting grid flexibility and reliability,particularly as service providers work to address the issue of renewable generation variability.With greater amounts of generation that varies as its resource varies,and with fewer traditional baseload assets that have a predictable resource supply,a consensus is emerging that reliability cannot be maintained without more energy storage on the power grid.In fact,more than eight in 10 respondents 84 percent anticipate a greater risk of load shedding,a last resort for grid operators,as renewable,variable resources play a larger role in power production(Figure 24).The IRAs$369 billion will accelerate the clean energy transition with billions in dedicated funds for energy storage research and development.54.7finitely yes29.2%Probably yes11.3%Might or might not4.7%Probably notFigure 24As the system becomes more reliant on renewable,variable resources,do you see increasing risk of more load shedding?(Select one)Source:Black&Veatch This is key,given that 89 percent of respondents indicate a need for medium-and long-term energy storage,though some disagreement remains on the definition of medium-and long-term storage.With eight hours as the current benchmark for long-term storage,more than 40 percent see a need for capacity of up to or longer than one week(Figure 25).To address clean energy pledges within the next 10 years,electricity service providers ranked solar generation No.1,with new natural gas generation a close second and retirements of traditional fossil assets also among the top four.While the respondents view storage among the most critical methods to be deployed over the time horizon,it seems only logical that responses to the question would have reflected more optimism for storage had the IRA been passed earlier(Figure 26).Black&Veatchs experts did find it interesting that optimism for long-duration energy storage was the leading method to achieve carbon reductions beyond 10 years.This likely reflects the impact of the technology curve at work as storage is both a mature technology for electrochemical battery technology and one in the early stages of its development for thermal/mechanical/chemical storage technologies.For example,just 10 years ago,the 2013 EPRI Energy Storage handbook did Yes,but no more than 1 weekYes,but no more than 1 dayYes,for longer than 1 weekYes,but no more than 12 hoursYes,but no more than 8 hoursNot sureNo24.8!.1.4.8.9%9.2%1.8%Figure 25Do you see a need for medium-and long-term energy storage?(Select one)Source:Black&Veatch 20222021SolarBatteryenergy storageTop 5 in Next 10 Years83.3.2u.2h.6r.5e.7h.8v.5g.9i.6%Retiringtraditionalfossil-fueledgeneration sitesNatural gasWindFigure 26Which 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&VeatchBLACK&VEATCH 2022-2023 ELECTRIC REPORT|ENERGY STORAGE|38BLACK&VEATCH 2022-2023 ELECTRIC REPORT|ENERGY STORAGE|39not include lithium-ion battery technologies as(then yet)capable of providing utility scale storage solutions;today,gigawatts of battery storage have been deployed nationwide,with the vast majority utilizing lithium ion battery technology.Further reflecting the overall optimism for battery storage is the growing trend in“solar 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 interconnection queue requests,a trend likely to continue in 2022 and beyond.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,in particular solar panels and transformers.While no technology combining commodities and semiconductors can emerge unscathed in a period of high inflation,batteries have been fairly insulated to this point.From Black&Veatchs perspective,nearly one-half of the price increases that our experts have observed are tied to increases in the cost of shipping versus other cost factors in the supply chain.Without question,the disruption shaping the future of the electric sector is accelerating,and management of the grid increasingly mirrors the delicate balancing act of circus high-wire performers.For a century,the traditional grid operated like one performer walking the wire,or at most two performers that cross by each other.Yet as renewable generation expands,not only is the load varying,so are the generation sources,thereby creating levels of complexity unmatched in the industrys history.Yet it is also an exciting time to be participating in the operation of the worlds most complex machine.When asked to identify the trends survey participants were most excited about,24/7/365 dispatchable power from renewable resources 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.47.1$/7/365 firm dispatchablepower from renewableresources and storage40.4%Long-term energy storagein the form of hydrogen38.5%Funding availability forlong-term energy storage projects35.6%Expansion of fuel cell use(e.g.hydrogen fuel cells)26%Commercialization of carbon capture,utilization and storage16.3%Commercialization of bi-facialsolar collectorsFigure 27What trends are you most excited about?(Select all that apply)Source:Black&Veatch BLACK&VEATCH 2022-2023 ELECTRIC REPORT|CYBERSECURITY|40Because of the highly dynamic technology and threat environment,cybersecurity has its tentacles in nearly every aspect of the electric industry,from assessing ongoing threats to identifying and mitigating system vulnerabilities,commissioning new devices that monitor air quality,and securing weather stations.As if that werent enough,cybersecurity experts in the electric sphere are responsible for maintaining compliance with the North American Electric Reliability Corporation Critical Infrastructure Protection(NERC-CIP)standards.Long story short,the industrys cybersecurity professionals have their hands full.But Black&Veatchs 2022-2023 Electric Report expert analysis of a survey of about 250 U.S.electric sector stakeholders illustrates that these professionals are rising to the occasion,performing regular cybersecurity assessments,showing awareness of the latest threats,and exploring new technologies and platforms to modernize their organizations.Responding to the threat landscapeWhen asked about the top challenges facing the electric industry today,a relatively low number(18 percent)of respondents selected cybersecurity a promising sign that the majority of respondents feel they could have cybersecurity under control.This might be due in part to the high number(45 percent)of respondents stating that the last cybersecurity assessment was done in 2022 or is currently being conducted.Cybersecurity assessments are not a one-size-fits-all endeavor.But this high number of positive responses coupled with that 46 percent of respondents are in the implementation phase of their security plans demonstrates that cybersecurity professionals are cognizant of and responding to the current threat landscape.Phishing(79 percent)and ransomware(67 percent)took the top two spots as the cyber threats drawing the most concern among respondents(Figure 28).The State of Cybersecurity Technology in the Electric SectorPhishingRansomwareHackingData leakageSupply chain vulnerabilitiesDDoS(Distributed Denial of Service)Insider threatsAccount takeoverACH Fraud78.6g.1d.38.62.9%.7.6.3.9%Figure 28Which cyber threats is your organization most concerned about?(Select all that apply)Source:Black&Veatch BLACK&VEATCH 2022-2023 ELECTRIC REPORT|CYBERSECURITY|41When asked to assess their confidence in recovering from a cyberattack,just one-quarter reported they were“extremely confident,”with 47 percent“somewhat confident.”(Figure 29).Low confidence levels may point back to maturing incident response plans using a variety of incidents,including the top cited concerns about phishing and ransomware.Embracing digital transformationIts no secret that cloud computing is here to stay.Organizations of all sizes now understand that cloud technology allows for increased agility,collaboration and ability to scale,among a host of other advantages.The electric industry has taken note;58 percent of respondents are considering the adoption of cloud environments to modernize their organization(Figure 30).However,questions remain about Supervisory Control and Data Acquisition(SCADA)in the cloud,as well as using the cloud for operational technology(OT)environments.When it comes to modernization,electric sector cybersecurity professionals also have their 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 IoT technologies are vastly different from the 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 of Energy recently published the National Cyber-Informed Engineering(CIE)Strategy to develop reference architecture for electric energy OT,which 58.3%Utilization of assetmanagement platforms58.3%Cloud environmentsfor applicable services46.7%Software-based platformsfor protection equipment41.7%Utilization of gridmanagement systems31.7%Utilization of IoT(Internet of Things)devices30%Utilization of geospatialinformation systemsFigure 30What technologies are you considering to modernize your organization?(Select all that apply)Source:Black&Veatch SomewhatconfidentNeitherconfidentnorunconfidentExtremelyconfidentSomewhatunconfident46.6.4$.7%1.4%Figure 29How confident are you in your utilitys ability to recover from a cybersecurity attack?(Select one)Source:Black&VeatchBLACK&VEATCH 2022-2023 ELECTRIC REPORT|CYBERSECURITY|42has the potential to be a game changer for industrial control system cybersecurity in the electric sector.While its clear that utilities are making moves to modernize,72 percent of respondents dont know if their utility is aware of and considering a Zero Trust architecture.Given that Zero Trust is still an emerging security framework,the uncertainty 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 aheadAs 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.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.BLACK&VEATCH 2022-2023 ELECTRIC REPORT|ABOUT THE AUTHORS|43Alex Bettencourt is a member of Black&Veatch Global Advisory Consulting group and leads the advanced transportation and decarbonization practices globally for the company.He and his team are working with many leading organizations around the world looking to meet their decarbonization goals,including through the electrification of their transportation fleets.Before coming to Black&Veatch,he led grid-modernization efforts of leading utilities around North America.Shibu Cherian is the global chief information security officer at Black&Veatch.He leads all aspects of the cybersecurity management program and strategy aligned to industry-leading controls and regulatory best practices to ensure that confidentiality,integrity and availability of critical systems are implemented and maintained to enable the business to deliver secure solutions to build and protect critical human infrastructure.The cybersecurity program aims to provide standardized procedures and capabilities that address enterprise security needs with sustainable cybersecurity controls to detect and defend the infrastructure and business operations against cyber-attack.Cherian has more than 20 years of global experience in cybersecurity strategy and risk management and has led in the areas of cybersecurity program management,security architecture,security engineering,cloud enablement,cyber operations and risk management in various industries,including financial services,retail and ecommerce,consulting,healthcare and telecommunication.Jonathan Cristiani is a Black&Veatch technology manager and clean fuels specialist with nearly two decades of experience in a host of renewable and alternative energy technologies.His duties include low-carbon fuel technology expertise,front-end project development/consulting,and engineering/project management support.Cristiani has significant experience with the conversion of bio-based feedstocks into energy products as well as with the production,storage,and utilization of hydrogen for numerous end use applications.Kristie Deiuliis is a managing director at Black&Veatch,leading decarbonization strategy and planning initiatives.With more than 25 years in the energy industry,Deiuliis leads strategic initiatives,driving the development of all economic,policy,technology,and feasibility assessments for a broad range of global top-tier clients.Her experience spans energy industry domains,including wholesale and retail(regulated and competitive)markets,distributed energy resources,market entry and expansion business cases,and investment strategies for companies seeking to pivot or accelerate specific goals.Nigam Desai is a managing director and project management professional in cybersecurity at Black&Veatch,working with utility companies on performance improvement,project and program management,IT software integration and solution architecture projects.Desai has a very good understanding of the entire transmission and distribution ecosystem About the AuthorsBLACK&VEATCH 2022-2023 ELECTRIC REPORT|ABOUT THE AUTHORS|44in the utilities space and provides his expertise in a myriad of projects.He has worked on successful implementations of advanced metering infrastructure(AMI),grid modernization(grid mod),product integrations and implementations,and implementing cyber guidelines for transmission lines.He has 30 years working on IT projects in India and the United States and has been in the utilities space for 24 years working for meter manufacturing and consulting firms.He has knowledge and experience in meter installations and field operations,integration of AMI,grid mod and related applications,business and IT SDLC projects,cybersecurity,consulting and leading teams across various challenging and modern utility projects.Heather Donaldson is managing director of Black&Veatch Management Consulting,where she is responsible for supporting clients through grid modernization,transportation electrification,DER integration and other transformations.A recognized expert in the energy industry,Donaldson has served as a special advisor to the California Public Utilities Commission,as a principal with Southern California Edison,and as a director with California ISO.Hua Fang is a managing director,co-leading Black&Veatchs strategy and planning practice and technical and commercial due diligence practice.As a Ph.D.economist with more than 20 years of experience in integrated energy market modeling and forecasting,asset valuation and commercial strategy,Fang has led several recent projects advising utility clients on economic assessments,investment strategies and customer impacts to meet their decarbonization objectives.She also leads Black&Veatchs economic and market assessments for emerging zero-carbon technologies such as clean hydrogen and green ammonia.She also oversees Black&Veatchs Energy Market Perspective(EMP),a comprehensive long-term projection of North Americas energy market outlook that incorporates technology and policy trends across the energy industry.David Hulinsky is the private networks leader in Black&Veatchs energy and process industries business.He previously served as the companys director and business unit lead for telecom,automation and distribution services for electric utilities.Hulinsky has more than 20 years of experience successfully developing and leading some of Black&Veatchs largest utility turnkey communications and smart grid EPC projects for leading utilities.Frank Jakob is the director for advanced energy storage solutions within the Black&Veatchs energy and process industry business line.Jakob focuses on storage solutions for renewable and conventional power generation in both distributed energy and utility sectors.He also focuses on decarbonized thermal and electrical solutions for process industries.With more than 40 years of experience,Jakob advises industry,utility,developer,owner operator and government clients,as well as the internal Black&Veatch engineering,procurement and construction(EPC)teams regarding the application,design and uses of energy storage systems(ESS)for stationary power generation applications and industrial thermal storage applications.Kyle Kuhn is an engineering manager and grid integration portfolio manager at Black&Veatch.With nearly 10 years of industry experience,Kuhn has been heavily involved with business development and technological solutions for renewable collector and interconnect substations as well as EPC project execution.BLACK&VEATCH 2022-2023 ELECTRIC REPORT|ABOUT THE AUTHORS|45Arron Lewis is a vice president and the energy utility West Region leader at Black&Veatch.With more than 29 years of experience,Lewis previously served as Black&Veatchs global power distribution business,heading the global deployment of services for power distribution infrastructure.His focus is on the delivery of solutions to clients needs for the energy transition,digitization and grid modernization,as well as infrastructure construction and upgrades required to meet the evolving needs of utility clients that deliver energy to customers.Kevin Ludwig is a vice president and grid solutions leader at Black&Veatch.With more than 20 years of experience in the power industry,Ludwig serves as the solution leader for Black&Veatchs offerings in transmission,distribution and private networks across all markets and industries.Ryan Pletka is a vice president of innovation and strategy at Black&Veatch.Pletka also helped found the companys growth accelerator,for which he leads investments in internal and external startups,incubation and mentoring of new businesses,advising on corporate strategy,and scouting for new technologies and trends.Deepa Poduval is a senior vice president,leading the global advisory practice within Black&Veatch.In this role,she provides executive leadership for Black&Veatchs strategic and digital advisory services,including expertise related to transaction due diligence,regulations,business strategy,energy market planning,asset and risk management,operational technologies and infrastructure modernization needs.Poduval and her team partner with a wide variety of clients spanning governments,and electric,water,oil and gas,commercial,industrial and financial sectors across the Americas,Europe and Asia who seek strategic,digital and technical expertise related to their critical infrastructure as they pursue goals around sustainability,growth and resilience.Leslie Ponder is the technology portfolio director for global distributed energy at Black&Veatch,where she is responsible for evaluating and delivering technology solutions within distribution,asset management and distributed generation.Ponder has more than 30 years of experience and has led systems strategy and planning for communications,grid analytics,and grid control and security systems.Craig Preuss is a system architect for utility automation at Black&Veatch.Preuss,who is a professional engineer in the states of Illinois and Washington,performs many different tasks since he works in utility integration and automation.Preuss is a senior IEEE member who chairs of the Power System Communications and Cybersecurity Committee(PSCCC),providing strategic electric industry direction in the PSCCC for cybersecurity standards and supporting the development of those standards as well as implementing cybersecurity designs on various projects for electric and gas utilities.Algert Prifti leads the carbon capture,sequestration and utilization(CCUS)efforts at Black&Veatch.He focuses on exploring existing and emerging decarbonization technology solutions that contribute directly to new and traditional industry clients seeking to manage their carbon emissions and generate value-add opportunities.Prifti has experience assessing and implementing CCUS solutions across the value chain,including point-source,carbon capture and sequestration(CCS),CO2 dehydration and compression,CO2 pipeline and storage,and CO2 utilization technologies.In addition to point-source CCS,he also is leading the direct air capture(DAC)technology scale-up and project development efforts at Black&Veatch.He has experience working directly with diverse industry stakeholders and BLACK&VEATCH 2022-2023 ELECTRIC REPORT|ABOUT THE AUTHORS|46utility owners to develop and navigate custom decarbonization roadmaps that pave the way to a low-carbon footprint future.As part of the New Energy Solutions team at Black&Veatch,Prifti also is involved with projects focused on implementation of other advanced decarbonization technologies.Ralph Romero is senior managing director at Black&Veatch Management Consulting LLC,leading the independent assessment of novel technologies practice.Romero joined Black&Veatch Management Consulting in 2010 and has been the principal investigator in more than 180 technology assessments in the areas of hydrogen,chemical and mechanical energy storage,power conversion systems,photovoltaic cells and modules,mechanical tracking systems and advanced water technologies.He advises domestic and international manufacturers,developers and financial institutions in the areas of technology,manufacturing,product and process design,among others.Paul Stith is associate vice president of global transportation initiatives for Black&Veatch Strategic Growth.He focusses on building the ecosystems needed to plan,finance,deploy and operate sustainable transportation and distributed clean energy infrastructure at scale.Stiths projects support investors,utilities,fleets,energy and transportation providers in electrifying,decarbonizing and 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&Veatchs Energy&Process Industries power business.He is responsible for the optimization and growth of the companys portfolio of renewable energy project solutions,with the expertise to meet current and future client needs.Tilley leverages more than 20 years of global experience on more than 100 renewable energy projects ranging from 1 MW to 3 GW in capacity.His experience across the lifecycle of projects includes portfolio planning,project development,technology selection,detailed design engineering,major equipment procurement and construction contracting,projec
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2022 Megatrends in Power Sponsored by Black&Veatch and Clarion Energy2022 MEGATRENDS IN POWER|ABOUT THIS REPORT|2About This ReportMario AzarPresident,Energy&Process Industries,Black&VeatchSponsored by Black&Veatch,a global leader in sustainable engineering,procurement and construction,and Clarion Energy,a media leader covering power generation,transmission and distribution,the 2022 Megatrends in Power report explores the sweeping forces driving a complete repowering of the American power industry.Todays electric grid is in a tenuous position.The accelerating impacts of climate change are being felt nationwide as extreme weather events from wildfires to deep freezes tornadoes and hurricanes push aging infrastructure beyond its capabilities.This comes as U.S.electric utilities work diligently to accelerate the energy transition by investing in new transmission to support renewable growth as well as the critical grid modernization assets that will help the industry meet aggressive net-zero energy targets.02022 MEGATRENDS IN POWER|ABOUT THIS REPORT|3Built on a survey of 216 power sector stakeholders,the 2022 Megatrends in Power report examines four megatrends that are setting the stage for the next decade of a rapidly evolving energy ecosystem:1.Decarbonization:With renewable energy reshaping the power sector,decarbonization is grabbing a bigger foothold among states,companies and other enterprises eager to cut their carbon footprints,independent of any external pressures.Others thinking of following suit must understand that going green doesnt happen overnight and takes thoughtful planning for the goals,the needs to reach them and,perhaps most importantly,how to pay for it.I PAGE 4 2.Electrification:When the topic of electrification comes up,most people immediately point to transportation as the main contributor to emissions.But large-scale electrification is about more than just electric vehicles;its going to take a multi-pronged approach requiring the widespread electrification of energy production and the heavy industries.I PAGE 8 3.Climate Adaptation:Utilities are heeding the COP26 call to protect their customers from the effects of climate change and prevent the widespread blackouts caused by extreme weather events.But“if you cant measure it,you cant manage it,”so power companies are turning to risk analysis and modelling to help prioritize resilience projects,implementing technology and physical asset hardening strategies that range from smart grid improvements to undergrounding.I PAGE 12 4.Energy Transformation:The energy transformation is inevitable,but what this means exactly remains unclear.As the world transitions to net zero,energy systems will require sweeping upgrades to incorporate an increasing number of distributed energy resources while ensuring steady supply.The path to a more resilient,flexible,decarbonized grid will be bolstered by the funding and statutory changes established by the Infrastructure Investment and Jobs Act.I PAGE 15 We welcome your questions and comments regarding this report and Black&Veatch services.You can reach us at MediaI.As the world transitions to net zero,energy systems will require sweeping upgrades to incorporate the increasing number of distributed energy resources while ensuring steady supply.2022 MEGATRENDS IN POWER|DECARBONIZATION|4A Minefield of Challenges,But Opportunities Come with Proper PlanningWith decarbonization often considered a principle of sustainability,oversized complexities come with the territory challenges like how to best interpret and track corporate commitments to their zero-emissions goals and link them to financing tools.None of it is lost on Moodys Andrew Grant.With the verbiage and scope of corporate carbon-cutting quests so diverse,addressing it all makes for“an absolute minefield,”S&P Global Market Intelligence quoted the credit rating agencys vice president for climate solutions as telling a panel last September.Little about decarbonization is simple.Yet more and more,states,companies and other enterprises big and small are diving in,promising wider use of“new energy”sources such as solar,wind and hydrogen coupled with battery storage as alternatives to carbon-based fuels widely blamed for climate change.Other solutions from low-carbon building materials to broader adoption of electric vehicle(EV)fleets increasingly are coming into play as cleaner,greener options.Carbon capture,utilization and sequestration(CCUS)technology is in the mix but still seeking greater traction.DECARBONIZATIONThe Drive to Decarbonization2022 MEGATRENDS IN POWER|DECARBONIZATION|5Its a surging tsunami of energy reform,frequently pursued independently not compelled by external regulatory forces to demonstrate that doing the right thing brings the added benefit of heightened sustainability.The 2022 Electric Megatrends Report proves it.Among the 216 stakeholders surveyed by Black&Veatch and Clarion Energy,nearly two-thirds said their organization has goals tied to carbon or greenhouse gas emissions reduction,clean energy or renewables,the majority of which saying those objectives were without any regulatory mandate(Figure 1).Overwhelmingly and encouragingly,respondents appear satisfied with the veracity of their decarbonization blueprints;98 percent described those plans as defined in some fashion,with two-thirds of those respondents declaring such efforts spelled out“very well”or“well.”So why are so many still on the sidelines?Thoughtful planning with trusted engineering,construction and consulting experts in breaking down the challenge of transforming to low-or no-carbon energy into manageable chunks holds much of the key.But the bigger issue is perhaps predictable:How do you pay for it?Financing,Funding Restraining Broader DecarbonizationDramatically cutting carbon from their operations requires acceptance that a financial burden,often steep,comes with such forward thinking.Unsurprisingly,funding(41 percent)and the availability of technology(40 percent)topped the list of challenges cited by respondents pressing for a net-zero carbon goal by mid-century,followed by the rate of return on investment(34 percent)and grid resiliency or reliability (33 percent)(Figure 2).While more than two-thirds(68 percent)of respondents agree that theyre directing their capital toward clean energy and one in five claim neutrality on that issue Uncle Sam is pitching in,soon to reward those able to nimbly position themselves for that outlay.Figure 1Does your organization have carbon reduction,greenhouse gas emissions reduction,clean energy or renewables goals?(Select all that apply)Source:Black&Veatch 41.7%Yes,separate from any regulatory mandate20.4%Yes,as part of a state regulatory mandate16.2%Yes,as part of a local regulatory mandate32.4%No2.8%Dont Know“Yes”NET 64.8 22 MEGATRENDS IN POWER|DECARBONIZATION|6The$1.2-billion,bipartisan Infrastructure Investment and Jobs Act(IIJA)signed by President Joe Biden in November earmarks$73 billion for grid upgrades,including the buildout of thousands of miles of new,resilient transmission lines to help expand renewable energy.That single biggest federal investment in power transmission in U.S.history comes at a time of runaway expansion of renewables.A recent U.S.Department of Energy study found that solar energy has the potential to account for 40 percent of the nations electricity by 2035,driving deep grid decarbonization.Black&Veatchs survey reflects solars allure,with power from the sun(33 percent)viewed as the top choice to be included in respondents clean-energy goals over the next decade,followed by the tight bunching of wind power,power purchase agreements,distributed energy resources(DER)and battery energy storage.Beyond 10 years,hydrogen widely considered a rising star becomes the most favored at 19 percent,passing DER,battery storage,solar and the retirements of fossil-fuel power plants(Figure 3).The need to address the ascendancy of renewables is no secret;survey respondents for Black&Veatchs Electric Report,released in November 2021,rated grid integration of renewables as their chief challenge,moving it up one spot from 2020 and supplanting aging infrastructure a relative constant as the industrys biggest headache atop the list.While CCUS technology can be part of the decarbonization toolbox,Black&Veatchs survey shows its underused,largely given the price tag.More than half of respondents(56 percent)report theyre aware of CCUS but havent considered it,with nearly 40 percent citing high technology and project costs as the biggest impediment to adding it to their asset portfolio.Where the rubber meets the road,the IIJA also presses for broader adoption of EVs,setting aside$5 billion for states to build a nationwide network of charging stations,along with$2.5 billion in local grants to support charging stations in rural areas and disadvantaged communities.The Biden Administration also aspires that electric cars and trucks make up half of new vehicles sold by the end of this decade.Offering a glimpse of the future,Daimler Trucks North America and Portland General Electric teamed up with Black&Veatch a leading provider of zero-emission vehicle transportation solutions on a first-of-its-kind,public charging station specially designed for medium-and heavy-duty electric commercial trucks.Figure 2What are your biggest challenges in progressing toward a net-zero carbon goal by 2050?(Select all that apply)Source:Black&Veatch 41.1%Funding 39.7%Availability of technology to get to net zero 33.6%Rate of return on investment32.7%Grid resiliency/reliability 18.7%Other2022 MEGATRENDS IN POWER|DECARBONIZATION|7That“Electric Island”project in Portland,Oregon,demonstrates high-power charging infrastructure scaled to accommodate electric trucks and their large batteries,addressing the nexus of electrified trucks and the grid while creating opportunities for tomorrows EV drivers and utility customers.The project earned honorable mention in the sustainability category of Fast Company magazines 2021“Innovation by Design”awards one of the industrys most-coveted recognitions.The Drive to Decarbonization:Whos In?More than 340 companies including a virtual“whos who”of multinationals such as General Motors,Kelloggs,Johnson&Johnson,Hewlett-Packard and 3M have pledged to move to 100-percent renewable generation across their global operations.That“RE100”list by the Climate Group and the former Carbon Disclosure Project includes 53 companies that reported their complete transition to renewables by the end of 2020,with an additional 65 announcing they were 90 percent there.Many of the RE100 companies are generating their own energy through rooftop solar;others are buying renewable-based power from offsite,grid-connected generators.For its part,Black&Veatch in 2020 announced it no longer is pursuing new coal-fired generation projects in any part of its portfolio.The company also plans to have reduced its overall emissions by 20 percent and fleet and building emissions by 40 percent from 2019 levels.The upshot of it all:With the right partners,pushing decarbonization goals across the finish line takes commitment and a thoughtful approach that mitigates the“minefield”of challenges,seizing vast opportunity in tomorrows new energy ecosystem.In the next 10 yearsBeyond 10 yearsSolar36.1.4%Wind30.1%9.7%Distributed energy resources28.7.4ttery energy storage27.8.9%Power purchase agreements(PPAs)26.6.1%Natural gas22.7%6.9%Combined cycle19.9%7.9%Retiring traditional fossil-fueled generation sites18.1.0%Hydrogen17.1!.3%Making traditional fossil-fueled generation more efficient16.7%5.6%Other9.3%7.4%Figure 3Which 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 from each time frame)Source:Black&Veatch 2022 MEGATRENDS IN POWER|ELECTRIFICATION|8Electrification:More Than Cars,Trucks and Things That GoELECTRIFICATION2022 MEGATRENDS IN POWER|ELECTRIFICATION|9From seemingly unending heat waves to record-breaking freezes,devastating droughts and wet-weather phenomena that can inundate a region with rain,we know the consequences of a warming planet and the need for resilience against climate change and extreme weather events.To stem the tide of rising global temperatures,the world needs to transition its economy from one that runs on fossil fuels to one built on a foundation of clean energy.Direct electrification using electricity as a direct replacement for a fossil-based source of energy(e.g.,electric vehicles(EVs),building heating and cooling)will be key to reducing carbon emissions.When the topic of electrification comes up,most people immediately point to transportation as the main player in the fight against carbon emissions.But large-scale electrification is going to be about more than just EVs;its going to take a multi-pronged approach.Electric Vehicles:Part of the Solution,But Not All of ItUnsurprisingly,the combustion engine has been and continues to be a major contributor to carbon emissions;in 2019,cars,buses and trucks were responsible for nearly one-third(29 percent)of all greenhouse gas emissions(GHG)in the U.S.,with light-duty vehicles contributing the bulk of them(58 percent)and medium-and heavy-duty trucks 24 percent.To address this,the Biden Administrations recently passed Infrastructure Investment and Jobs Act(IIJA)includes a combined$15 billion for vehicle electrification programs,including$7.5 billion to build out a national network of EV chargers in the U.S.This will provide a huge boost,given that a recent industry survey issued by Clarion Energy,in partnership with Black&Veatch,found that commercial entities bear the brunt of the financial burden when it comes to shouldering EV charging infrastructure costs(Figure 4).Figure 4How are EV charging infrastructure costs typically shared among the following entities?Source:Black&Veatch 45.6%Commercial entity19.3deral government14.2%State government20.9%Utility and local governmentLarge-scale electrification is going to be about more than just EVs;its going to take a multi-pronged approach.2022 MEGATRENDS IN POWER|ELECTRIFICATION|10As the demand for EV charging sites continues to grow,developing sustainable funding will become increasingly important.The survey found that 31 percent of utilities are seeing an uptick in requests for Level-1 charging sites,43 percent are seeing an increase in Level-2,and 44 percent are seeing an increase in requests for Level-3 charging sites(Figure 5).When it comes to preparing for small-scale EV load growth,nearly one-quarter(22 percent)of respondents said they would be ready today,with an additional 28 percent ready within the year.Timelines for medium-and large-scale EV load growth stretched out a little farther;38 percent of respondents said they could add medium-scale load growth within the next year,while only 29 percent said the same for large-scale load growth(Figure 6).Large-scale loads will take the most time,with 40 percent of respondents looking to two years or longer.The Age of ElectrificationBut while the large-scale adoption of EVs is key to achieving a net-zero economy in three decades time,they represent only one component of what must be a larger electrification effort.Although transportation contributes 29 percent of GHG emissions,two other sectors also are primarily responsible electricity production at 25 percent and heavy industry at 23 percent.Today,fossil fuels(e.g.,coal,natural gas,petroleum)continue to make up nearly 61 percent of the energy mix in the U.S.,according to the U.S.Energy Information Administration.Level 1(120V)30.80.8.9 .5).9.0.4B.7#.9.5.9C.6%Level 2(208/240V)Level 3/DC Fast Charging Higher About the same LowerNo AnswerFigure 5Compared to last year,are you seeing an increase in EV charging site requests?If so,for which charging types?(Select one per row)Source:Black&Veatch 2022 MEGATRENDS IN POWER|ELECTRIFICATION|11Nearly 20 percent of utility-scale electricity generation comes from renewable energy,a number that needs to increase nearly 3.5 times to 68 percent direct electricity by 2050.Although growth is trending in the right direction only a decade ago,renewable energy comprised only 13 percent of electricity generation in the U.S.were still facing a serious gap,especially as the Biden Administration has set aggressive targets of a 100-percent carbon emissions-free power sector by 2035 and a net-zero economy by 2050.This means that EVs alone wont cut it;they need to be fueled by clean energy,meaning more utility-scale electricity generation from renewable sources and a modernized power grid that can integrate clean energy from local generation.Recognizing this,the IIJA allocates more than$65 billion to improve clean energy Small-scale EV loadsMedium-scale EV loadsLarge-scale EV loadsWe are ready today22.2%8.5%6.8%Less than 6 months12.8.8%4.3%6 months to 1 year 14.5.1.9%1-1.5 years 15.4.5.8%1.5-2 years 6.0.1%7.7%More than 2 years 19.7.29.3%No answer9.4.7.1%Figure 6From today,how much time is needed for your utility to enable new EV loads?(Select one)Source:Black&Veatch transmission and integrate more renewable energy while also promoting smart grid technologies.We also need to deepen our commitment to decarbonizing the heavy industries that are notoriously difficult to electrify.Advanced technologies around carbon capture and hydrogen are offering solutions to help us get there.Supporting these efforts,the IIJA also creates a new Grid Deployment Authority to fund research and development in next-generation technologies such as advanced nuclear reactors,carbon capture and clean hydrogen.These three components transportation,energy production and the heavy industries will be the key components of embracing a cleaner,more sustainable and more resilient electric future.2022 MEGATRENDS IN POWER|CLIMATE ADAPTATION|12CLIMATE ADAPTATIONCreating the Grid for the Contemporary ClimateThink global,act local:the rallying cry to address climate change.Calls to act stemming from COP26,2021s UN global climate summit,include pursuing adaptation measures to protect communities especially those most vulnerable from climate changes effects.By decarbonizing,Americas power industry is thinking globally.But how is the sector acting locally to protect communities?According to The Washington Post,in September 2021,almost one in three Americans lived in a county hit by a weather disaster in the previous four months.And the disruption these weather events cause frequently includes blackouts.It took more than 10 days to restore full power in New Orleans after Hurricane Ida,which struck in August 2021.In February 2021,Texas was five minutes away from a cascading series of events that could have left the state in the dark for weeks.A heatwave caused rolling blackouts in California during August 2020.In the U.S.,as elsewhere,the most vulnerable communities are those most affected by climate 2022 MEGATRENDS IN POWER|CLIMATE ADAPTATION|13change.As the Environmental Protection Agencys Climate Change and Social Vulnerability in the United States report notes,“Of the four socially vulnerable groups examined,minorities are most likely to currently live in areas where the analyses project the highest levels of climate change impacts.”Besting the BlackoutsIn response,utilities are heeding the COP26 call to act and working to understand how they can best protect communities from climate change-related blackouts.If you cant measure it,you cant manage it;so,the majority of respondents to our survey are looking to risk analysis and modelling to help prioritize resilience projects.Risk analysis,employed by 57 percent of respondents,focuses on what an asset or process is intended to do and identifies factors that stop it from performing as required(Figure 7).This information is used to inform measures to mitigate the factors degrading asset performance,helping identify the optimum balance between cost and risk.One in five respondents are using climatic modelling to help them better understand and predict the events putting power infrastructure at risk.Such data-driven interventions are vital in the face of a relatively skeptical public.According to The Economist,four out of 10 Americans do not believe global warming is caused by human activity.As a result,it is a concern that nearly 30 percent of respondents are not using risk analysis or modelling to prioritize projects.It seems data gathering and modelling are where most of our respondents find themselves in terms of implementing resilience projects.During the past year,the majority nearly 70 percent neither deployed nor piloted projects that help their utility respond faster to storms or environmental events.For utilities with deployed or piloted projects to drive faster responses to environmental events,there is a balance of process and asset-based initiatives.The former included amending standard operating procedures and using weather data to pre-stage contract crews;among the latter are installation of battery energy storage systems(BESS)and pre-event power reductions.29.1%No19.7%Yes,climactic modeling13.7%Yes,other types of analysis or modeling57.3%Yes,risk analysisFigure 7Have you used risk analysis,modeling or other similar inputs to prioritize resilience projects?(Select one)Source:Black&Veatch 2022 MEGATRENDS IN POWER|CLIMATE ADAPTATION|14Hardening AttitudesAlthough respondents referenced weather/storm hardening among the resilience initiatives undertaken during the past year,the appetite for asset hardening techniques is difficult to gauge.Most respondents,about 60 percent,view asset hardening as somewhat important or of similar importance to previous years.A little more than one-third(36 percent)said asset hardening was much more important,while barely 5 percent see asset hardening as less important today than in previous years(Figure 8).For those utilities investing in asset hardening,smart grid improvements are the most attractive measures.In addition to supporting the COP26 goal of adapting to protect communities from the effects of climate-change-related weather events,non-wires alternatives such as smart grids also enable the adoption of more renewables,thus simultaneously supporting the COP26 call to decarbonize.Given that backup power is second to smart grids in terms of hardening measures favored by respondents,it is likely that BESS,often a smart grid component,will be an element of backup power systems.Get PhysicalFollowing technology-centered hardening techniques,respondents assigned broadly equal importance to three physical measures to protect transmission lines:vegetation management,structural transmission,and distribution upgrades and undergrounding.The fact that climate change-related disruption to communities power supplies will remain a feature until the grid is modernized to meet contemporary climatic conditions may prove a blessing in disguise.Climate changes impact on service may be a tipping point.Previous Black&Veatch research found budgetary constraints and regulatory hurdles to be among the top barriers to grid adaptation.The growing threat and cost of prolonged outages,experienced in areas such as Texas,California and New York,is prompting policymakers and regulators to consider rate-basing expensive hardening investments.This,coupled with the Infrastructure Investment and Jobs Act,may presage a new era of grid resilience and alignment with the priorities set during COP26.Figure 8Compared to previous years,how important are asset-hardening techniques today?(Select one)Source:Black&Veatch 36.7%Much more important today30.8%Of similar importance compared to previous yearsAsset hardening is 4.7%Somewhat/much less important today28.6%Somewhat more important today2022 MEGATRENDS IN POWER|ENERGY TRANSFORMATION|15The need for a green energy economy is glaring the power sector alone is responsible for almost three-quarters of the emissions since the pre-industrial age.But energy market instability caused by COVID-19 and related supply chain disruptions have sobered calls to“electrify everything,”leading instead to deeper considerations of how,and how quickly,the energy sector realistically can decarbonize while maintaining stable supply and demand.It seems everyone knows an energy transformation is coming,but fewer understand what exactly this means and how power infrastructure developed for unilateral transmission is going to incorporate the blend of new generation technologies necessary to operate at net zero.The path forward will encompass the development of innovative,distributed generation technologies and vast system upgrades not only to the infrastructure itself,but also to the ways infrastructure projects are funded and approved.As the U.S.embarks on its energy transformation,curiosity,ingenuity and a willingness to adapt will lead the way to net-zero carbon emissions.ENERGY TRANSFORMATIONThe Infrastructure Investment and Jobs Act will Streamline,Speed Energy Transformation2022 MEGATRENDS IN POWER|ENERGY TRANSFORMATION|16Figure 9What role(s)do you envision in offering renewable energy solutions to your customers(Select all that apply)Source:Black&Veatch 54.4%Working with governments on regulatory models that enable investments in both renewables and conventional power generation 53.5%Working“behind-the-meter”with customers who are interested in moving to renewables 29.8%We will continue investments in conventional power generation because of concerns relative to renewable energys intermittency 6.1%We will play no role 4.4%None of the above Diversifying PowerU.S.infrastructure is aging.As it does so,it loses its ability to weather increasing grid stressors such as extreme climate events and added loads from electrification.Strategies to combat this issue will be two-pronged;they must harden the grid to make it resilient and upgrade it to accommodate multidirectional flows of energy from increasingly distributed generation sources.Yet,concerns regarding stable generation still create hesitation around clean energy.Thirty percent of respondents to the survey by Black&Veatch and Clarion Energy noted they would continue making investments in conventional power generation due to concerns related to renewable intermittency(Figure 9).Their concerns are not misplaced;intermittency makes it difficult to regulate prices and match supply with demand,in many cases requiring natural gas backups to keep supply steady.Managing supply and demand within a green energy economy will require a diverse portfolio of distributed generation sources,including nuclear,hydrogen,wind,solar,biomass and more,along with the ability to store energy both short-and long-term.Many utilities recognize this need.More than half of survey respondents reported they were Managing supply and demand within a green energy economy will require a diverse portfolio of distributed generation sources,including nuclear,hydrogen,wind,solar,biomass and more2022 MEGATRENDS IN POWER|ENERGY TRANSFORMATION|17working“behind the meter”with customers who wish to switch to renewables(Figure 9).In addition,56 percent of respondents confirm they are adapting their business models to become more competitive in the distributed energy resource(DER)market(Figure 10).Initiating TransformationAs DERs grow as a share of energy assets,the onboarding of clean energy to the grid will be expensive in dollars,manpower and time.The Infrastructure Investment and Jobs Act(IIJA),signed by President Biden in November 2021,is poised to mitigate these expenses and,hopefully,accelerate the transition to a net-zero economy.Though utilities see the need for modernization,the government plays the largest role in stimulating the energy transformation.More than half of respondents to a survey by Black&Veatch and Clarion Energy report“government incentives and/or policies”to be the main driver of renewable energy investments,while 41 percent cite“increased governmental pressure and influence”as a guiding factor(Figure 11).Though the exact path to net zero remains convoluted,the IIJA has significant funding for projects that will begin the journey.The law has various provisions for the energy sector,including$2.5 billion for a Transmission Fund loan program through the Department of Energy(DOE),$5 billion for resiliency and hardening equipment,$16 billion for DOE programs for energy efficiency,renewables and much more.The bill also provides funding to stimulate research and development of clean energy technologies such as carbon capture and battery energy storage.Figure 10Has your utility adapted your business model to be more competitive and innovative in the distributed energy resource space?(Select one)Source:Black&Veatch 35.9%Yes,we are in the process of adapting our model18.8%Yes,we have adapted our business model 26.5%No,but we are interested in exploring this 10.3%No,our business model will likely remain unchanged 6.0%No,regulation wont allow it 2.6%No answer“Yes”NET 55.7%“No”NET 42.7 22 MEGATRENDS IN POWER|ENERGY TRANSFORMATION|18While the funding allocated by the IIJA will put a dent in the cost of the United States energy transformation,it tends to overshadow a different,yet equally important part:statutory changes that will radically change the ways infrastructure investments are made.The law streamlines federal permitting for new projects,expands opportunities for co-investment in infrastructure by public and private entities,and routes assistance toward communities most in need.In addition,it simplifies and speeds the federal environmental review process under the National Environmental Policy Act.These provisions go a long way to minimize the red tape and administrative burden often associated Figure 11What factors are driving renewable energy investments in your region?(Select all that apply)Source:Black&Veatch 52.1%Government incentives and/or policies41.2%Increased pressure/influence from governments34.6%Lower levelized cost of energy 31.8%Improved pricing competitiveness and efficiencies from new technologies(bifacial solar,dynamic load ratings,Volt/VAR devices,battery energy storage)30.3%Increased pressure/influence from shareholders and drive for sustainability goals29.9%Increased demand from commercial and industrial clients28.4%Increased demand from residential customers 21.3%Convenience and lower risk of using power purchase agreements to source new renewables projects18.5ttery storage is making it easier to manage and reduce losses from curtailment or clipping 18.0%Lower development risks and risks of delays compared to traditional solutions17.5%Reduced options to finance traditional solutions/comparatively increased ease of access to capital to finance renewable solutionswith federal funding,expediting and easing the initiation of infrastructure projects.In this increasingly interconnected age,our power grid is tasked with facilitating almost everything we do.As the nation decarbonizes,electrification increases and DER multiply,this burden will gain weight.U.S.power infrastructure must be reliable,flexible and decarbonized to propel the nation through the green revolution and beyond.As power utilities upgrade and adapt,funding availability and decreased red tape from the IIJA will initiate and streamline the vast transformation ahead.2022 MEGATRENDS IN POWER|19P 1 913 458 2000 E MediaI W Black&Veatch Corporation,2022.All Rights Reserved.The Black&Veatch name and logo are registered trademarks of Black&Veatch Holding Company.REV 2022-04LEGAL NOTICE Please be advised,this report was compiled primarily based on information Black&Veatch received from third parties,and Black&Veatch was not requested to independently verify any of this information.Thus,Black&Veatchs reports accuracy solely depends upon the accuracy of the information provided to us and is subject to change at any time.As such,it is merely provided as an additional reference tool,in combination with other due diligence inquiries and resources of user.Black&Veatch assumes no legal liability or responsibility for the accuracy,completeness,or usefulness of any information,or process disclosed,nor does Black&Veatch represent that its use would not infringe on any privately owned rights.This Survey may include facts,views,opinions and recommendations of individuals and organizations deemed of interest and assumes the reader is sophisticated in this industry.User waives any rights it might have in respect of this Survey under any doctrine of third-party beneficiary,including the Contracts(Rights of Third Parties)Act 1999.Use of this Survey is at users sole risk,and no reliance should be placed upon any other oral or written agreement,representation or warranty relating to the information herein.THIS REPORT IS PROVIDED ON AN“AS-IS”BASIS.BLACK&VEATCH DISCLAIMS ALL WARRANTIES OF ANY KIND,EXPRESSED OR IMPLIED,INCLUDING,WITHOUT LIMITATION,ANY WARRANTY OF MERCHANTABILITY,FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT.BLACK&VEATCH,NOR ITS PARENT COMPANY,MEMBERS,SUBSIDIARIES,AFFILIATES,SERVICE PROVIDERS,LICENSORS,OFFICERS,DIRECTORS OR EMPLOYEES SHALL BE LIABLE FOR ANY DIRECT,INDIRECT,INCIDENTAL,SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR RELATING TO THIS REPORT OR RESULTING FROM THE USE OF THIS REPORT,INCLUDING BUT NOT LIMITED TO DAMAGES FOR LOSS OF PROFITS,USE,DATA OR OTHER INTANGIBLE DAMAGES,EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.In addition,user should place no reliance on the summaries contained in the Surveys,which are not intended to be exhaustive of the material provisions of any document or circumstances.If any point is of particular significance,reference should be made to the underlying documentation and not to this Survey.This Survey(and the content and information included therein)is copyrighted and is owned or licensed by Black&Veatch.Black&Veatch may restrict your access to this Survey,or any portion thereof,at any time without cause.User shall abide by all copyright notices,information,or restrictions contained in any content or information accessed through this Survey.User shall not reproduce,retransmit,disseminate,sell,distribute,perform,display,publish,broadcast,circulate,create new works from,or commercially exploit this Survey(including the content and information made available through this Survey),in whole or in part,in any manner,without the written consent of Black&Veatch,nor use the content or information made available through this Survey for any unlawful or unintended purpose.
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