Grid modernization for utilities: From legacy tech to a smart grid  

Unlike legacy systems, modern utility technology solutions can manage electricity flows in real time using minute-level data from smart meters and precise demand and supply forecasts. On top of intelligent load balancing, smart grids can also:

• Provide consumers with real-time energy use data and recommendations
• Facilitate integration of renewable energy sources with energy storage systems
• Quickly detect issues with assets or predict when maintenance is necessary
• Automatically reroute electricity to prevent downtime in consumer services
• Enable bidirectional energy flow

Power grid modernization is one of those initiatives that can reap a multitude of benefits, all depending on the priority focus areas and the project’s specifics.

For example, according to the Grid Forward industry association that promotes and accelerates grid modernization, one New York utility decreased outages for its customers by 10% thanks to monitoring and controlling capabilities for distributed assets. A Texas grid operator, in turn, leveraged modernization to avoid an estimated 45 million outage minutes during storm recovery.

Overall, the key benefits of power grid modernization include increased grid resilience; decreased risk of outages; fster response after extreme weather events; optimized operational efficiency nd reduced operational costs

Data, IoT sensors, analytics, distributed energy resources and energy storage solutions drive grid modernization.

Smart grid infrastructure

IoT sensors are the foundation of the modern grid. They help monitor equipment condition and output, collecting the data that analytics models use to detect faults or impending failures. For example, IoT sensors are built into smart transformers, intelligent switches and power quality monitors. Environmental IoT sensors, in turn, monitor weather conditions.

Smart meters

Smart meters collect energy consumption data in real time, as well as the flow properties (voltage, current, power factor, etc.). In North America, 82% of installed electricity meters are already smart, with the rate expected to increase to 91% by 2030.

Digitalization, data and analytics

Advanced analytics models make sense of the data from IoT sensors. For example, predictive analytics forecasts equipment failures, renewable energy production and electricity demand.

Energy storage and flexible assets

Decentralized energy resources (DERs), like residential solar panels, power the shift to renewable energy, working on the edge of the main grid. However, as renewables are non-firm capacity, their output has to be stored in batteries to manage demand in peak hours.

The world is hungry for electricity, and it’s getting only hungrier. The global demand for this staple of modern life is expected to jump by a whopping 150% by 2050, fueled by the data center boom.

Additionally, the grid’s resilience is also tested by issues such as extreme weather events and cybersecurity threats. Green energy sources, represented by many local installations, need a modern grid for integration, too.

Grid modernization is a strategic transition to a smart grid that improves operational efficiency, reliability, resilience, safety and cost-effectiveness. Unlike the traditional infrastructure, a smart grid:

• Comprises many small power producers
• Is a decentralized, two-way system
• Supports cross-border operations
• Enables consumers to actively participate in the system

Grid modernization can pursue multiple goals, from reducing carbon emissions and improving grid reliability to enhancing energy efficiency.

In the U.S., over 70% of the power grid infrastructure is estimated to be over 25 years old. Just leaving it be isn’t an option for a number of reasons:

• Equipment failure risks. Equipment failure is a multi-billion-dollar risk for the energy industry. What’s more, according to the Energy Infrastructure Index report, 87% of executives also expect severe increases in service interruptions in the next five years.

• Extreme weather events. According to the Energy Infrastructure Index, a whopping 96% of energy and utility executives worry about their infrastructure’s ability to withstand large storms. Besides potentially deadly outages, unearthed power lines can also spark wildfires.

• High maintenance costs. Energy and utilities are already shifting the high operational costs of decaying infrastructure to the consumer, with rate increase requests submitted in 41 U.S. states.

• Operational inefficiencies. Aging infrastructure, such as older transmission systems, causes energy losses during transmission and distribution, driving up costs.

• Security risks. Outdated technology carries high cybersecurity risks, and utility operators are prime targets for cyberattacks, including ransomware attacks.

While it’s easy to forget about it, the past decade did mark several crucial changes in the electric grid.

The share of renewables has gone up, fueled by investment and technology advances. For example, in the U.S., residential solar energy installations almost tripled between 2017 and 2023. Battery storage capacity has increased 97-fold since 2014. Smart sensors are now the de facto standard, too.

As for individual case studies, success stories range from Bayenwark speeding up station installation documentation by 75% with machine learning to Iberdrola migrating its core business systems to the cloud. Energy grid modernization also enabled Meridian Energy to improve operational efficiency by replacing its legacy systems with a single Oracle Cloud ERP platform.