Energy Grid Risks: Overcoming the Challenges

Opportunities are emerging to mitigate energy grid risks through a software-centric, flexible energy future. Distributed energy resources and smart grid technologies offer a path forward, enabling operators to adapt and manage evolving challenges.

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Discover emerging opportunities for mitigating energy grid risks through software-driven solutions.
Explore key strategies for grid modernisation, from advanced smart charging for EVs to cybersecurity measures.
Find inspiration for how to tackle the evolving challenges in the energy industry, from managing aging infrastructure to enhancing grid resilience .

Across the world, energy grid risks are evolving. Accelerating renewable energy integration and electrification are among the trends leading to new challenges.

According to the IEA, 80 million kilometres of new power lines—equivalent to the entire current global grid—will be needed by 2040 to meet climate targets and support energy security. This could lead to annual investment in grids doubling to more than US$600 billion a year by 2030.

Grid operators and utilities face the monumental task of balancing the need for upgrades to energy infrastructure with keeping prices competitive.

New solutions and approaches suggest a different path, where energy grid risks are mitigated through integration of software-centric approaches to energy flexibility and distributed energy solutions.

1: Managing peak energy loads

Risk: Peak loads occur during times of highest electricity demand. They can strain infrastructure, elevate costs, and increase the risk of blackouts. Increases electricity demand and integration of fluctuating energy production sources like renewable energy are set to exacerbate peak loads.

Risk mitigation opportunities:

Smart grid management: Implementing real-time monitoring systems and leveraging smart metres and DERMs to help predict and manage peak loads, optimising grid performance.
Demand response programs: These programs encourage consumers to adjust energy use away from peak times, alleviating pressure on the grid and improving reliability. Software solutions for managing electric vehicles (EVs) and distributed energy resources (DER) can expand the options available to energy companies.

2: Renewable energy integration

Risk: The continued growth of renewable energy is critical to the green energy transition. However, their intermittent nature leads to increased variability and unpredictability in the grid.

Risk mitigation opportunities:

Energy storage solutions: Battery systems, including EV batteries, can store surplus renewable energy and release it when needed, stabilising supply during periods of variability.
Decentralisation: Proactive use of DERs, like rooftop solar and smart home equipment, can help reduce the grid’s dependence on large-scale generation, bringing energy production closer to consumption.

3: Ageing grid infrastructure

Risk: In many countries, power grids struggle to cope with increased demands and outdated infrastructure. The situation poses significant risks to grid stability, increased grid congestion, and efficiency issues, increasing the likelihood of outages and higher maintenance costs.

Risk mitigation opportunities:

Software-centric approach: Distributed Energy Resource Management Systems (DERMS) and smart grid technologies, enable real-time monitoring, demand response, and load balancing. These solutions improve grid flexibility and reduce the need for grid expansions.
Grid modernisation: Integrating smart grid technologies using two-way communication, control systems, and data processing to create a more efficient and resilient energy network. A core component is smart meters, which provide real-time data on energy use.

4: Cybersecurity threats

Risk: As energy grids become more digital, they are increasingly vulnerable to cyberattacks. Energy grids are also integrating more devices, such as Internet-of-Things sensors, to support energy efficiency and two-way communication. These developments may open new attack vectors for hackers that can disrupt power supply and compromise the safety of energy networks.

Risk mitigation opportunities:

Robust cybersecurity protocols: Operators must continuously update security measures and employ advanced cybersecurity tools to detect and prevent attacks.
Holistic cybersecurity approach: Proactively enhancing cybersecurity across operations. This includes securing OT (Operational Technology) and IoT devices against cyberattacks and technical errors while ensuring compliance with security regulations and standards.

5: Climate change

Risk: Climate change increases the risk of severe weather events like storms, floods, and heatwaves that can cause damage to the grid, causing outages and economic losses. Other issues include rising temperatures leading to risks of increased peak loads for cooling.

Risk mitigation opportunities:

Grid resilience strategies: It is vital to build infrastructure that can withstand extreme weather conditions. This includes investing in durable materials and backup power sources.
Microgrids: Self-sufficient energy communities can provide localised power, reducing the impact of large-scale outages and improving overall grid resilience.

6: Electrification and EVs

Risk: The continued rise of EVs presents both opportunities and challenges for the grid. While EVs can increase energy demand, they also have the potential to support grid stability through smart charging technologies.

Risk mitigation opportunities:

Advanced smart charging solutions: Advanced smart charging features, including managed charging solutions, can help optimise energy use by balancing EV loads during off-peak hours, preventing strain on the grid.

Asset-approach to EVs: Using EVs as core assets for load balancing and frequency regulation.

7: Attracting and retaining talent

Risk: Energy companies find it increasingly difficult to attract top talent in the industry and, more importantly, retaining them over time. Almost 50% of the industry’s workforce will reach retirement age in less than a decade.

Risk mitigation opportunities:

Training and upskilling: Investing in the training and upskilling of existing talent to adapt to new technologies and the demands of the green transition. Upskilling enhances workforce productivity and efficiency and boosts employee satisfaction by fostering career growth opportunities.
Value-based approach: Employees are increasingly seeking meaningful work, and companies that lead in green energy innovation, promote transparent practices, and actively contribute to climate goals – for example, through solving grid risks through proactive, software-centric approaches – are more likely to engage and inspire top talent.