Lux recently attended Distributech, the sprawling conference geared toward distribution utilities, which this year was just shy of 18,000 attendees meeting in Orlando, Florida. The conference provided key insights into the future of power distribution, a critical part of the grid that will feel the first challenges of integrating larger amounts of distributed renewables. Conference tracks centered on digital solutions, asset management, and evolution of the grid. Here are a few key takeaways from the conference:
- AI isn’t transforming the utility (yet). The use of AI was a central theme across the keynotes and many tracks at the event. But there was a big difference in the way AI was discussed in each environment. Keynotes from AI optimists Zack Kass and larger corporates like Microsoft pitched AI as a revolutionary change in our lives. We focused our attendance of breakout sessions to identify where utilities are deploying AI, finding its use is much more limited in practice. A lack of quality data was most commonly cited behind hesitation to deploy AI solutions, with many quipping “garbage in, garbage out.” Use-cases deploying AI to clean data were ironically cited, including AEP, which copresented with SenseWaves on their solution to identify and correct errors in AEP’s digital twin of their distribution network. Several startups we spoke with noted challenges in the quality and consistency of utilities when trying to pilot new solutions, delaying implementation. Nonetheless, these use-cases focused on doing what utilities do more efficiently and accurately rather than transforming processes or operations.
- Generative AI technologies are ready to be deployed today in limited applications. Generative AI won’t transform grid operations in the same way that other industries — like marketing, education, and healthcare — could see transformative change driven by generative AI. Nonetheless, some of its use-cases can be applied within utilities. Several talk tracks cited use-cases for quickly scanning and summarizing engineering or regulatory documents as significant time savers for internal operations. Additionally, many utilities have already started trialing their use for consumer-facing chatbot functionality. However, these applications must be closely supervised as they are launched. One speaker noted that after launch of an internal document-review function, they received 80% negative feedback; the AI wasn’t pulling the right information reliably and required human input to retrain the model.
- Electric vehicles (EVs) are a significant opportunity. Even for utilities with relatively low EV adoption, charging infrastructure and load management are top of mind. While overall load growth is a potential challenge with EVs, both residential and fleet vehicles create additional ways to manage the grid. Utilities are actively pursuing vehicle-to-home and vehicle-to-grid technologies that can leverage EVs as behind-the-meter assets, and charging stations paired with energy storage can lessen the burden on the grid. With larger, more predictable loads, fleet electrification remains the biggest opportunity for utilities to leverage EVs as a tool for managing electricity.
Notably one phrase was absent from the conference: the utility death spiral. Seemingly gone are the days of utilities fearing mass defection from the grid, which would increase costs that further drive off customers. There was clear confidence utilities would remain part of the decarbonization solution; in fact, the challenges in meeting load growth — notably from data centers and EVs — were a far more prevalent concern. Distributech offered a preview of utilities embracing more agility to solve challenges in the evolving grid. The number of pilot projects presented across sessions demonstrated an appetite for new solutions that make utilities invaluable in the energy transition. While innovation may be slower within utilities than in other industries, opportunities for new technologies, integration strategies, and business models are abundant.