Smart grid programs are hamstrung by “lack of customer interest and knowledge," according to an annual survey of 700 U.S. utility leaders from Black & Veatch. This correlates with additional survey results (see Smart Grid section of full survey results beginning on page 60) that show respondents do not believe smart grid programs are well defined within their state or industry. Perhaps exacerbating the challenge is the fact that more than two-thirds of respondents felt there was a distance between utility and regulator visions for smart grid.

Next on the list of greatest impediments to smart grid implementation are issues related to money. Uncertainty regarding funding when stimulus funds from the American Recovery and Reinvestment Act are spent and concern for making large, upfront investments were ranked second and third, respectively.

Black & Veatch yesterday released the results of its fifth annual Strategic Directions in the Electric Utility Industry survey. Among the top findings in this year’s results, participants believe that energy and commodity prices will rise significantly in the next five years, and water has become the top environmental and business issue.

“More than 70 percent of survey participants agreed or strongly agreed that energy and commodity prices would rise significantly in the next five years, signifying tremendous capital investment needs across the nation’s electric utility system,” said Rodger Smith, president of Black & Veatch’s management consulting business.

“Additionally, there is a growing awareness of the nexus of water and energy issue within the industry,” said Smith. “For the first time, water supply has become the top environmental concern among all survey participants and water management was rated as the business issue that could have the greatest impact on the utility industry.”

Additional survey highlights include:

• Lack of national energy policy impedes investment in new technology. When asked in the survey what factors most motivate the industry to invest in new technology, the two highest rated responses where “Regulatory Requirements” and “Government Incentives,” respectively.
• Coal will remain an important part of the U.S. energy mix. More than 77 percent of respondents – virtually the same percentage as last year’s survey results – believe when fiscal realities are considered, coal remains key in the U.S. energy portfolio.
• Nuclear fuel disposal and storage is one of the top environmental concerns among survey participants after the earthquake and tsunami crippled the Fukushima Dai-ichi nuclear power plant. This survey was conducted immediately following the tragic events in Japan, likely influencing responses to this question. Nuclear was not in the top 3 of this environmental category in the 2009/2010 survey results.
• Natural gas leapfrogs nuclear and wind as the top “environmentally friendly” technology among all survey participants. However, utility respondents still prefer nuclear. This is first time natural gas has taken the top spot in this category, indicating gas as an economical and environmentally attractive bridge toward a lower carbon future – particularly since survey participants believe shale gas will be available at a reasonable price for the next 20 years.
• Approximately 20 percent of survey respondents are planning energy storage projects, indicating this technology is moving into more main stream segments. This also correlates with other survey responses where participants believe energy storage will have an important role within their systems beyond the next five years.
• Survey participants are optimistic that electric vehicles will account for approximately 8 percent of their annual energy load by 2025. Participants estimate electric vehicles will account for 1 percent of their annual energy load by as early as next year. Nationwide, 1 percent of annual energy load equates to approximately 5,300 megawatts of baseload (nuclear, coal, biomass, geothermal or hydro) capacity – the energy equivalent to power more than 5 million homes.
• The United States is at risk of losing its global competitive position in utility technology. Specifically, respondents believe U.S. solar, nuclear and wind industries are at some risk of losing their competitive positions. More than 80 percent of respondents believe China is the greatest threat to the United States’ overall energy competitiveness.