Some readers may be unaware that the Agency for International Development (USAID) has planned, developed, managed and executed successful electric power infrastructure development projects in dozens of developing nations over its multi-decade history. USAID had been the world’s premier international development agency, until its near-closure early this year. USAID has been one of three principal approaches to the country’s being held in high regard among other nations, along with Voice of America and the Peace Corps.
Begun under President John Kennedy, the Agency for International Development was an outreach that expanded upon Kennedy’s famous statement “Ask not what your country can do for you, but what you can do for your country.” Kennedy’s outlook further expanded to a world view in the context of “…what can America provide to benefit the world.” The nation was energetic and young people stepped up to respond and to propel the country forward on a number of fronts.

The first contact with US AID in my experience was in Vietnam some 58 years ago. I was a young U.S. army specialist/sergeant deployed in villages around and downriver from Saigon. On multiple occasions I would come across US AID truck convoys delivering foodstuffs (including rice, of all things, a somewhat unbelievable commodity to those of us who could see Vietnamese rice paddies just about everywhere in that region of the country) in large sacks that read “From the American People.” A nice sentiment that meant a lot to the nearly three million servicemen and women who served in that conflict and could find something positive in their collective experience via US AID and its courageous efforts to feed many thousands of South Vietnamese citizens.

The U.S. Agency for International Development (USAID) has remained as the principal U.S. agency to extend assistance to countries recovering from disaster, trying to escape poverty, and engaging in democratic reforms. In addition to the provision of foodstuffs, electrification projects rank among USAID’s many successful undertakings.

USAID supports electrification projects globally, focusing on expanding access to reliable and affordable electricity, particularly in off-grid areas, and promoting sustainable energy solutions, including mini-grids and solar systems. Here’s a more detailed look at USAID’s electrification efforts:

USAID’s key focus has included these five areas:
Expanding Access to Electricity: USAID aimed to increase access to electricity, especially in underserved areas, by supporting on- and off-grid solutions.
Strengthening Energy Sector Institutions: USAID worked to strengthen the capacity of energy sector institutions to manage and deliver electricity services effectively.

Promoting Private Sector Investment: USAID encouraged private sector involvement in the energy sector to foster sustainable and scalable solutions.

Developing Sustainable Off-Grid Models: USAID supported the development of viable and sustainable off-grid electrification models, including mini-grids and solar systems.

Supporting Clean Energy Technologies: In partnership with the National Renewable Energy Laboratory, USAID has developed ongoing and successful renewable energy programs in at least 13 countries representing nearly one billion people.

Now the real point of this article is simply to make readers aware of the multiple electrification projects that have been successfully undertaken by USAID over the years. Furthermore, please let your legislators know that it is a mistake to forego these positive developments that cast a bright and positive light on America helping other nations improve access to electricity and thereby putting our country in a good position to win friends and influence governments around the world. If we can’t continue to help our international brothers and sisters, then surely our frenemies will step in and cheer our departure from this charitable component of the American nation on the world scene.
Here is a key example of some remarkable electrification successes attributable to wise research, planning and investment decisions made by USAID management and staff over the past 63 years.
Ukraine: USAID had been helping Ukraine strengthen its power grid, improve energy efficiency, and increase the use of renewable energy sources.
Papua New Guinea: USAID supported the PNG government in its efforts to expand electricity access, with a focus on off-grid solutions and private sector engagement.
South Asia: USAID had been working with countries in South Asia to support their energy sector transformation, including the development of renewable energy and the improvement of energy efficiency.

These efforts have benefited many of the citizens in these and at least a dozen other countries with basic electrification to remote areas, infrastructure electrification of transit and transport systems, upgrading of power lines and substations, and a more positive view of America and Americans. This is one vital approach to keep the U.S. influential and strong among global communities. This is a display of soft power at its finest.
Andrew Natsios had served as USAID administrator under President George W. Bush. He stated recently that” USAID is the most pro-business and pro-market of all aid agencies in the world.”
Nonetheless, as I write this article, the administration has apparently concluded its review of USAID, and indicated that 83% of USAID’s programs would be cancelled, involving approximately 5,200 contracts. We who are active participants in the energy industry need to raise our voices in support of USAID and its role in expanding American influence and winning friends for the nation around the world.
At the same time, it is important for us to realize that the Voice of America has been another strong component of our foreign policy since the early days of World War II. News of energy developments in the U.S. and worldwide have been among the news stories broadcast over the VOA throughout these last eight decades. While traveling to nearly 135 countries during my own active energy industry research studies over 45 years, I have been made aware of VOA broadcasts listened to by energy industry colleagues in languages ranging from Farsi and Arabic, to Russian, to Chinese and a host of other languages. In some countries, VOA is the only way for citizens to learn about American efforts and progress in sustainable development and obtain a glimpse of world news. VOA has served the world with a consistent message of truth, hope and inspiration. I can vouch for the VOA’s influence on the world community of nations based on my own experiences and travels in countries like Iran, China and Russia as well as much of Asia.
If our Congressional representatives and senators lack the will to raise their voices, then we must rise to do so. Adding the budgets of US AID and VOA together, the total allotment amounts to less than one percent of the federal budget. US AID is looked to by more than a million people around the world involved in sustainable development goals as well as multiple millions who have benefited from an array of successful energy initiatives now fully implemented.

Overview of the 2024-2026 U.S. Transmission and Distribution Equipment Market: Protective Relay Series. The first report grouping is the completion of our final series in the 2024-2026 suite of U.S. T&D-related market overviews covering more than 85 individual topics in seven series. Our newest series launched this week is the complete set of eight individual market snapshots for topics that includes a variety of protective relays used for distribution feeders, generators, motor control, other substation relays, electro-mechanical relays, drop-in control houses, synchrophasors and teleprotection.
Individual market snapshots on these topics are priced at $195.00 while the complete set of protective relay market overviews is available for $1,250.00.
More information about the protection and control market overviews can be found on our website at: https://www.newton-evans.com/product/overview-of-the-2024-2026-u-s-transmission-and-distribution-equipment-market-protective-relay-series/ .
The six other components of the Market Overview suite for 2024-2026 include: Transformers, Distribution Automation, MV Equipment, Substation Automation, HV Equipment and OT/IT Systems. In ll, more than 85 individual T&D-related market snapshots of equipment, systems and services are included.

Study of Protective Relays and IEC 61850 Adoption. The second report announcement is for a special study undertaken in the October 2024-January 2025 period that addresses topics centering on the adoption of IEC 61850 and trends for protective relaying practices in North American utilities. A total of 27 utilities participated in one or more topics with 24 respondents, including eight IOUs, completing the entire survey of 20 technical questions. Our assessment of the findings is provided along with appropriate graphs and tables. The report is priced at $495.00 and is available for online ordering at https://www.newton-evans.com/product/study-of-protective-r.elays-and-iec-61850-adoption/ .

Looking back over the past 24 months, we initially note what appears to be strong growth in real unit demand for a wide variety of T&D equipment, energy automation systems and related T&D services. Most of this view developed as a result of utility and manufacturer surveying conducted over the past two years.  Along with this perceived increase in demand came higher prices and longer lead times after receipt of order by electrical equipment and device manufacturers – affecting the delivery of operational equipment, T&D-related systems and software, and the provision of related services.  So, the difficulty comes in trying to differentiate rising end-user dollar expenditures versus rising demand in units of equipment ordered or numbers of systems and services provided.

Higher prices for electrical equipment, automation real systems and T&D services accelerated in the post-COVID era, due primarily to increased costs of materials, ongoing staffing issues (and salary increases), supply chain logjams and, to some degree, slowdowns in the regulatory approval process at federal and state levels.

Separating “real” market growth from increased market values due to inflationary price pressures is often difficult, but surveying both side of the electric power equation to include end-users (e.g. utility + C&I) and industry (manufacturers, energy automation system developers and T&D equipment service providers) enable one to work through this inter-related set of activities to determine real market growth.

We tend also to rely on FRED (aka Federal Reserve Economic Data) data prepared by the Federal Reserve Bank of St. Louis and sourced from the U.S. Bureau of Labor Statistics that includes historical and current price trends for an array of electrical equipment.  As shown in the following chart, FRED, as of December 2023, depicts trends for large increases in equipment costs, exacerbated by the COVID-era disruption to the economy, and its effects on the typical economic cycle of capital equipment procurements.

Now,  look at the even more drastic manufacturing cost increases for transformers

Reviewing these two charts suggests that end-users of capital electrical equipment are spending more because of rising prices.  However, there is more to this story.  The revenue increases accruing to manufacturers, systems integration firms and T&D service organizations indicate that sales for these firms are moving up, rising faster than inflation, meaning true growth in spending is occurring on orders for additional new equipment and systems and replacement of aging capital equipment and legacy systems.

We are seeing growth in unit sales for a variety of equipment and systems and a surge in demand for large power transformers.  On the HV side, there is clear evidence that increased procurements have been the case throughout the country for many capital items.  A review of EEI’s current CAPEX outlook for IOUs indicated a likely rise from 2022 to 2023 of 10%-11% or so.   For transmission, there would likely have been even more growth overall, but delays with renewables projects, transmission permitting issues, and, to some extent, the delays being encountered with large power transformer orders, prevent even more significant transmission interconnection-related growth.  (Click on the chart to expand the view).

As to specific growth areas related to HV or transmission-related capital equipment, it is interesting to observe that the United States continues to invest heavily on equipment manufactured for the lower HV ranges as has been the situation for the nearly four decades that Newton-Evans has studied this market.  Upgrades to existing transmission networks will mean growth in the EHV and UHV ranges, but it has been a slower upgrade process than was the outlook a decade ago.

In the HV equipment manufacturing arena, there are a relative handful of market participants, with most being global or international firms with the capital reserves necessary to finance multi-million-dollar equipment development and manufacturing costs.  This is quite a different picture from the more numerous domestic manufacturers found in most MV or distribution categories of utility infrastructure equipment.  As well, there are only about 200 utilities having any transmission assets, and a 10x multiple of utilities providing electricity distribution services throughout the United States.

As a result of an increased number of suppliers competing for equipment orders in the MV equipment range, we see a moderation of inflationary pressure and lower levels of price increases among distribution equipment manufacturers, lower levels than are apparent among the fewer transmission equipment and large power transformer suppliers.  Lower-cost-based manufacturers of MV equipment can remain competitive, especially when” price” is the basis for procurements, as it most often is among public power utilities, given product quality remains acceptable and is IEEE/ANSI standards-compliant to end-user buyers.

In addition to the annual capital expenditures for new T&D equipment, there is a flourishing after-market for third party T&D services of all types.  There are hundreds of local and regional firms capable of providing services to a wide range of T&D equipment, and scores of these that can provide field-based or in-plant repairs and refurbishments to transformers, switchgear, circuit breakers and the like.  The American trade organization for larger T&D equipment services providers is PEARL (Professional Electrical Apparatus Reconditioning League).  PEARL is comprised of 61 national and regional T&D equipment refurbishment and service firms.  Annual revenues among these member companies total well more than a billion-dollars.

A second association of electrical apparatus services firms is the Electrical Apparatus Service Association, Inc. (EASA) is a U.S.-based, international trade organization of more than 1,700 electromechanical sales and service firms in nearly 70 countries. EASA members sell and service industrial electric motors and related rotating apparatus such as generators, pumps, fans, compressors, gearboxes and blowers. EASA members also provide services for a wide range of T&D equipment, including transformers and switchgear.

Another newer electrical equipment services association is KNOWER, with U.S. members found across the country.  While member capabilities center on electrical motors and rotating apparatus, these member firms also provide testing, repair and maintenance for switchgear, relays, and transformers.

While PEARL members tend to provide excellent services coverage for utilities and C&I firms, EASA and KNOWER tend to focus on the industrial end-user communities, with a focus on electric motors, pumps and the like and provide services to water utilities.  The reason I have included an overview of T&D services firms and organizations in this “look-ahead” article is this.  As the involvement of more third parties in the process of generation and transmission of electric power continues to increase, there will be a corresponding increase in reliance on equipment service providers that are already well-versed in serving the C&I community.  The C&I sector is expanding to include renewable site asset owners together with the site-specific wind plant and solar farm operators.  Together, these sites are adding multiple thousands of units of T&D equipment and a hundred or more new substations to the evolving grid each year.  Click to expand the view of my T&D services wheel.

Next month, I plan to write about the various building blocks of activities that encompass a broader view of T&D equipment services, from training and testing, to equipment monitoring and diagnostics.

On the front lines of cyber security imperatives and OT/IT concerns are the world’s energy industry companies and utilities.  Energy-related companies and utilities in each sector – electricity, gas and oil and water communities face serious cyber challenges on a routine but persistent basis throughout production, transmission and distribution activities.  Because these communities and the infrastructure they represent are so vital to modern civilization, they are most often targets for bad actors, whether the bad actors are rogue nation-states, criminal groups or hacktivists.

Added to the attractiveness of these infrastructure industry segments for cybercriminals is the ever-growing attack surface that is a result of two things: rapid deployment of field automation, extending the purview of operational control systems to distribution beyond traditional “fences” using less secure wireless communications methods, compared with wire-line approaches to data communications.  As the world modernizes and automates its infrastructure delivery methods, it does so while cyber security standards, checks and balances lag and while regulatory oversight sometimes languishes.

It seems the faster we move toward full-scale automation, the “behinder” we are with cyber-physical security implementations.  Cybercrime reporting is still in its infancy relative to the level of cybercrime events.  Cyber-criminal law needs to be strengthened and severe penalties enacted on a global basis so that strong deterrents will work effectively in the future.

The economic costs associated with cybercrime continue to increase dramatically with each passing year.  The IMF and the U.S. FBI have estimated the 2022 impact of cybercrime around the world stood at an astounding 8.44 trillion USD.  As if that wasn’t bad enough, the outlook is for that amount to nearly triple by 2027, to 23.82 trillion USD.  The World Bank report for 2022 indicated a global GDP value of nearly 101 trillion US dollars.  With more than 8 trillion US dollars estimated to have been lost to cybercrime, this unfortunately has a dampening effect on global economic growth.  The losses of the world economy to cybercrime have the effect of lowering global GDP ⁽¹⁾ value by several percent, according to Newton-Evans Research Company, which has been including cyber-security related questions in its industry surveys for nearly 30 years.  Newton-Evans has also served as a lead international survey partner for several CIGRE working groups for the past 15 years   Click on Figure 1 below for chart expansion of frequently used range estimates of dollar losses to cybercrime.

In 2018, the World Economic Forum’s (WEF)  Centre for Cybersecurity launched the Systems of Cyber Resilience: Electricity initiative. This groundbreaking effort helped bolster the cyber resilience of the global electricity infrastructure by bringing together leaders from over 60 businesses, governments, civil society, and academia. The objective was to develop a comprehensive cybersecurity vision to protect the power infrastructure.

During 2023, the WEF’s Centre for Cybersecurity and 11 founding members ⁽²⁾ comprised of electrical equipment manufacturers, systems integrators, cybersecurity firms and utilities launched a new iteration of the initiative known as Systems of Cyber Resilience: Electricity.  The objective of this new program is to establish “. . . an independent multi-stakeholder community that will continue to collaborate and take collective action.  The community will serve as a global exchange platform for cybersecurity leaders in the electric sector.”

The WEF initiative for the electricity sector has already resulted in the publication of three sector-relevant white papers.  These are:  Cyber Resilience in the Electricity Ecosystem: Principles and Guidance for Boards; Cyber Resilience in the Electricity Ecosystem: Playbook for Boards and Cybersecurity Officers; and Cyber Resilience in the Electricity Ecosystem: Securing the Value Chain.

In one estimate prepared by Accenture, the estimated combined foregone revenue losses shared among utilities and other energy companies over the five-year period 2019-2023 was forecasted to be more than $400 million USD.

Now for the role of telecommunications in the mix.  The ITU (International Telecommunications Union) is the UN agency charged with responsibility to “…maintain and extend international cooperation among all the Member States of the Union for the improvement and rational use of telecommunications of all kinds.”  The ITU promotes the shared global use of the radio spectrum, facilitates international cooperation in assigning satellite orbits, assists in developing and coordinating worldwide technical standards, and works to improve telecommunication infrastructure in the developing world.

A fundamental role of ITU, based on the guidance of the World Summit on the Information Society (WSIS) and the ITU Plenipotentiary Conference, is to build confidence and security in the use of Information and Communication Technologies (ICTs).  Back in 2007, the ITU launched the Global Cybersecurity Agenda (GCA), as a framework for international cooperation in this area.

Private Sector Reporting on Cybercrime:

McAfee and the Center for Strategic and International Studies (CSIS) released a well-researched 2018 white paper entitled “Economic Impact of Cybercrime – No Slowing Down.” ⁽³⁾  This 23-page report is full of still-pertinent information on the pervasive effects of cybercrime.

The report identified some of the hidden costs from the aftereffects of cybercrime including loss of intellectual property and confidential business information; online fraud and financial crimes, financial manipulation, opportunity costs, and reputational damage.

The report recommended uniform implementation of basic security measures, including regular updates and patches, and open security architectures; discussed the need for increased international law enforcement cooperation; expressed improving or replacing existing processes such as the Mutual Legal Assistance Treaty, which allows one government to request the help of another in investigating cyber crime or obtaining evidence.

In late 2018, Deloitte, The UK-headquartered global professional services firm, published a white paper entitled “Managing Cyber Risk in the Electric Power Sector. “ ⁽⁴⁾   The Deloitte report pertains to the global electric power community, though the chart referenced  in the article was developed from available US information.  In the figure provided in the article, one can note the relative importance placed on various threat actors and their business and operational impact from key types of cybercrime activities.

While criminal gangs are most likely to cause financial loss and theft of customer data, rogue nation-states are more likely to focus their efforts on destruction of infrastructure as well as theft of customer data.

In late 2020, McKinsey & Company also wrote about the threat of cybercrime against the energy industry and provided approaches to addressing vulnerabilities peculiar to energy infrastructure.  In the McKinsey article, the authors defined four levels of security zones for a power-generation plant, and discussed how utilities can set up a best-practice approach to cyber security. ⁽⁵⁾

In 2022, Accenture published a paper on cybersecurity for utilities. ⁽⁶⁾  In the paper, the company’s authors reported having observed three characteristics that make utilities especially vulnerable to cyber threats.

• increased numbers of threats and actors targeting utilities: nation-state actors seeking to cause security and economic dislocation, cyber criminals who understand the economic value represented by this sector, and hacktivists out to publicly register their opposition to utilities’ projects or broad agendas.
• The second vulnerability is utilities’ expansive and increasing attack surface, arising from their geographic and organizational complexity, including the decentralized nature of many organizations’ cybersecurity leadership.
• The electric-power and gas sector’s unique interdependencies between physical and cyber infrastructure make companies vulnerable to exploitation, including billing fraud with wireless “smart meters,” the commandeering of operational-technology (OT) systems to stop multiple wind turbines, and even physical destruction.

This year, the U.S. Securities and Exchange Commission has enacted Code of Federal Regulations (CFR)  Rule #17, which stipulates that publicly traded companies must report cyber security incidents and must provide some information about their cyber security methods and procedures.  The ruling is mandated to come into effect mid-year 2024.  This ruling will affect all investor-owned electric, gas and water utilities as well as other publicly traded energy industry companies. Here is a section of the ruling:

The Securities and Exchange Commission (“Commission”) is adopting new rules to enhance and standardize disclosures regarding cybersecurity risk management, strategy,governance, and incidents by public companies that are subject to the reporting requirements of the Securities Exchange Act of 1934. Specifically, we are adopting amendments to require current disclosure about material cybersecurity incidents. We are also adopting rules requiring periodic disclosures about a registrant’s processes to assess, identify, and manage material cybersecurity risks, management’s role in assessing and managing material cybersecurity risks, and the board of directors’ oversight of cybersecurity risk.^{. (7)}

In summary, there is no shortage of good information available on measures that, taken together, may enable utilities and the energy industry in general, to form a more robust and increasingly resilient defense against pervasive cyber threats and cybercrime.  When I review where the industry stands today, and compare it to the millennial year, however, what appears to be worrisome is a perception that we are not yet always including cybersecurity and cyber defense at the top of the concerns when initiating new and further afield methods of grid and pipeline monitoring and control.  This gap can be significantly narrowed if we place cyber expertise, supply chain component knowledge and software bills of material on a strategic planning level within our utilities, other energy firms and commercial/industrial entities supporting the utility/other energy communities. The SEC ruling will mean advances in cyber reporting, but that still leaves similar reporting yet-to-be-required in such a manner among public utilities, cooperatives and privately-held energy companies.  Click on Figure 2 to expand for a view of Newton-Evans’ perception of the growing gap between energy industry attack vectors and cyber defense capabilities.  With strong efforts from both the public and private sectors around the world, this gap can be narrowed significantly in the coming years.

On October 23, 2023, Interpol released information about the take-down of a notorious cyber-criminal gang – Ragnar Locker Ransomware group, headquartered in Western Europe.  This criminal organization had targeted critical infrastructure over the years.  A detailed write-up can be found here:  https://www.europol.europa.eu/media-press/newsroom/news/ragnar-locker-ransomware-gang-taken-down-international-police-swoop.  Hopefully this will be but one of many take-downs of cyber criminal organizations in the months and years ahead.

During 2024, be on the lookout for CIGRE WG D.54’s (Regulatory Approaches to Enhance EPUs Cybersecurity Frameworks) scheduled publication of a technical brochure that includes findings from surveys of electric power utility (EPU) officials involved with cybersecurity from nearly 40 countries and another survey of national regulators and their roles in ensuring cyber security within their country’s borders and sharing with the international community.  This CIGRE working group has had the benefit of cooperation from delegates and survey participants located in North and South America, Western, Central and Eastern Europe, Africa and Asia.

End-notes:

1. According to the World Bank, the global GDP reached 100.56 trillion US dollars in 2022. See https://data.worldbank.org/indicator/NY.GDP.MKTP.CD .
2. The 11 founding members include Dragos, EDP, Enel, Hitachi Energy, Iberdrola, Naturgy, Ørsted, Schneider Electric, Siemens Energy, Southern Company and Vestas.
3. https://csis-website-prod.s3.amazonaws.com/s3fs-public/publication/economic-impact-cybercrime.pdf
4. See https://www2.deloitte.com/content/dam/insights/us/articles/4921_Managing-cyber-risk-Electric-energy/DI_Managing-cyber-risk.pdf .
5. https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/the-energy-sector-threat-how-to-address-cybersecurity-vulnerabilities
6. https://www.accenture.com/content/dam/accenture/final/a-com-migration/pdf/pdf-177/accenture-cybersecurtiy-for-connected-energy-ecosystems.pdf#zoom=40
7. https://www.sec.gov/files/rules/final/2023/33-11216.pdf

Introduction:

The Department of Energy’s primary energy statistics provision unit is the Energy Information Administration, originally chartered to provide unbiased information on energy production and usage for the U.S. Congress.  The separate EIA website further states The U.S. Energy Information Administration (EIA) collects, analyzes, and disseminates independent and impartial energy information to promote sound policy decision-making.  Overall, the DOE employed 15,124 people as of July, 2022.  Of this total, only about 350-400 personnel work within the Energy Information Administration, according to a recent Congressional Research Service report prepared for Congress.

Article Focus:

This article focuses on the rapidly developing market for large-scale bulk energy storage systems in the United States.  Much of the source information for this article has been provided by the DOE’s Energy Information Administration (EIA). The EIA early release of Form EIA-860, Annual Electric Generator Report, issued in July, 2023, is found here: https://www.eia.gov/analysis/studies/electricity/batterystorage/  .

Note in the accompanying chart (Figure 1) the tremendous growth spurt in total MW of BESS capacity over the 2019-2022 years, extending out to the projected new installations now planned for 2023 and 2024.  By year-end 2022, nearly nine GW of BESS capacity had been installed in the U.S.  Note:  Click on each chart to enlarge:

Importantly, BESS usage can be viewed on multiple levels and from various angles.  For example, units can be seen by age of the installation, by location of the units, by installed cost based on duration of capacity, by ownership type, whether the BESS units are stand-alone or are co-located with power generation facilities (fossil and renewables), and from a ranking of applications served by the BESS unit.

The second chart shown here (Figure 2) portrays the ISO/RTO regional locations of BESS by MW of installed capacity.  Note the high proportion of currently installed BESS power capacity that is found within CAISO (53% of the nation’s total at YE 2022), and ERCOT (with about 23% of the nation’s total).  The remaining nearly one quarter of installed BESS capacity is shared among five regions (NYISO, ISO-NE, PJM, Florida and “all other areas”).

The next chart (Figure 3) illustrates the dominant role of “stand-alone” BESS installations.  BESS plus solar sited installations are also significant, amounting to 3,235 MW of capacity. BESS co-located with fossil generation facilities is relatively important, providing 874 MW of capacity. The one surprising observation (to the author) is the relative scarcity of BESS installations co-located with wind farms, hydro and other generating facilities.

As mentioned earlier in this article, there are myriad additional ways to look at BESS installations.  In terms of applications used as the basis for installing BESS units, Frequency Regulation was the response having the most MW of capacity (6685), Arbitrage was second (5214 MW), followed by Spinning Reserve or Ramping (4935 MW) and Excess Generation storage (2963 MW).  Lower down in BESS installation application rankings  included voltage or reactive power support, load management, system peak shaving and load following.

Another approach to segment assessment involves a look at ownership types.   IPPs (Independent Power Producers) are responsible for a majority of installed BESS MW of capacity (7232 MW),  Electric utilities account for about 1463 MW of installed capacity and C&I firms for most of the remaining installed capacity.

As things look right now, and if supply chains can improve so that the necessary components of battery energy storage systems can continue to be manufactured, assembled and installed to meet market demand levels, the BESS market is destined to continue growing at high double digit levels through much of the remaining 2020’s.  By YE 2024 it appears to us that the equivalent of more than 30 GW of BESS power capacity will be installed and operational throughout the United States.

During the past 36-month period, Newton-Evans Research studied a few topics that we had not researched in prior years.  These topics included data diodes, synchronous condensers, battery energy storage systems and network transformers. During the months leading up to the Covid era of 2020-2021, we also completed studies of distribution line sensors and uncovered trends in application of voltage regulation devices.  During 2020, we looked in-depth at electric vehicle adoption rates and prepared a mid-range outlook for grid modernization programs.  Here are some of the more interesting and perhaps relevant insights gathered from some of these research assignments.

Data Diodes:

Data diodes have been around for decades.  These devices are most often used by the military and by critical infrastructure organizations around the world.  Data diodes and unidirectional gateways are network appliances that allow data to travel in only one direction.   Typically, these devices are used as connections between two or more systems of differing security classifications, such as operational control systems transmission of data files to IT systems.

The product life cycle for these devices in the U.S. energy industry is still in its embryonic stage in some segments (T&D, renewables); while in other energy segments (TOP 25 energy companies) the product life cycle is clearly in the growth phase, and in a few segments (nuclear plants, large oil refineries) data diodes are nearing the maturity stage.

Energy industry spending in the United States on data diodes/unidirectional gateway systems now exceeds $25 million annually.  The majority of equipment sales have been limited to the largest oil and gas companies, large power generation facilities, nuclear plants, and to some larger electric power transmission and distribution utilities.  Our own limited surveying in 2022 indicates additional evaluations are now underway for data diode – unidirectional gateway use in more T&D applications and among a broader array of utility types and sizes.

Battery Energy Storage Systems – BESS.

The battery energy storage systems (BESS) market in the United States has grown exponentially over the past decade.  The Energy Information Agency (EIA) within the Department of Energy has maintained a repository of information on energy storage trends in the United States.   The total energy storage capacity for electricity exceeded 1000 MW and about 1700 MWh by 2020, according to the EIA.  Published commercial sources report that the growth trends for BESS continued during the COVID pandemic and further reported that battery energy storage capacity is larger than the numbers last reported by EIA.   For one example, IHS-Markit reported recently that battery energy storage amounted to nearly 2000 MW in 2019, and had grown to 4,000 MW by 2021.

Battery R&D Today in the United States . . . Key to independence and assured supply in coming years!

• Very active level of battery R&D underway
• Battery R&D start-ups funded largely by private investment firms.

Services Provided by Battery Manufacturers

• Major Li-Ion battery manufacturers are becoming (or planning to become) full-service partners with utilities – providing integration and maintenance services, thereby attempting to cut out the “middleman” integrators currently involved in BESS Engineering, Procurement and Construction/Integration, thereby shortening the supply chain.
• Utilities are currently using one, two or all three of these sources for BESS integration: battery manufacturers, BESS integration specialist firms, or their own engineering staffs.
• The Newton-Evans’ commissioned survey conducted as part of the study found a number of commercial BESS integration services being used by large electric utilities.

Synchronous Condensers:

There are four drivers that affect the U.S. market (in terms of annual opportunities and units of syncon equipment) for synchronous condensers (or syncons) that exists today.  These drivers include  early shutdowns of fossil power plants; loss (or erosion of) of spinning reserves;  increased use of distributed energy resources and its impact on grid stability; and, the lack of grid-forming devices.

What we have heard is that utility/plant engineering staffs are looking for reliable, cost-effective approaches to deal with the threats to grid stability in some utilities and in some regions of the country caused by the above-listed drivers.

“About 15% of the US fossil fuel power fleet shuttered between 2009 and 2018. But most of these plants are built to last 30 to 50 years, long enough to pay off the hundreds of millions of dollars it takes to build them. To meet (President) Biden’s 2035 goal, many plants will inevitably have to be switched off before the end of their natural lifespan.” (Source:  Yahoo Finance).  There are a total of about 10,400 fossil-powered generators in the U.S. and about 3,500 utility-operated or commercially-operated fossil plants (source: EIA).

U.S. coal power capacity peaked over 317,600 MW in 2011, according to EIA data. It has declined every year since and was down to about 216,800 MW by the end of 2020.  By year-end 2022, the figure yet to be reported by EIA, coal power capacity will likely be less than 200,000 MW.

We found that even though synchronous condenser equipment has been available for more than a century, and implementations have been quite  successful in providing grid stability, voltage support and short circuit capacity and in offsetting the lack of grid-forming devices, there are other FACTS-based approaches to meeting similar grid operational requirements.

Nonetheless, there is a resurgence of interest in syncon technology and a wave of recent utility reviews are ongoing for both very large MVAR capacity units, as well as for syncon units that could be installed at key medium voltage substations and at DER interconnection points along the grid. The overall U.S. market for syncon equipment may well reach the quarter billion dollar level by 2024, in our opinion.

Network Transformers:  Industry’s Response to Densely Populated Inner-City Areas

Network transformers are vault or subway type units of equipment and are not pole, pad or substation units. The specifications for vault and subway are very similar with substation units having better corrosion specifications. NWTX units are designed for mounting in underground rooms and are common in dense city locations where surface mounted transformers would be a visual and traffic obstacle.

Network Transformers (NWTX) typically range from 300 kVA to 2,500 kVA three-phase. The Primary voltage ranges from 2400 VAC to 34,500 VAC and the secondary from 600VAC to 208 VAC. The type may be oil, dry or cast coil. The primary is usually delta connected, and the secondary is wye connected. The high-voltage connection is usually to a network switch or an interrupter-type switch. The secondary connection is usually to a network protector or a low-voltage air circuit breaker.

Downstream protection equipment is almost always provided separately and not bundled into the NTWX sale. All come with a basic DNP3 interface, but no suppliers currently add any type of asset management software. Standards for NWTX are C.57.12.24-2016 and C.57.12.40-2017.  All suppliers to the North American market meet these standards for NWTX units. Some older rebuild units, however, may not meet these standards.

Liquid filled NWTX systems traditionally came with mineral oil fill but FR3 10C is now the most popular fill. The 2016 DOE energy standard did require all suppliers to upgrade their NWTX products.  Virtually all NWTX transformers are built to order and virtually none are stocked ready to ship. There appear to be too many variables in the voltages, material of construction, gauges, piping, etc. to justify stocking a ready supply of NWTX units.   The manufacturing process may take about 6 weeks from receipt of order. None of the suppliers we interviewed see much change in the regulations over the mid-term, since the adoption of the  DOE 2016 specification, so product designs should remain stable going forward for the next few years.

Perhaps the most important regulatory driver affecting the future of network transformers is the increasing need among critical infrastructure facilities (hospitals, commercial centers, military installations, certain micro-grids) requiring reliable, resilient electric power.  Secondary and spot networks comprised of network transformers and network protectors can help urban utilities meet these requirements.

Network transformers have been playing a critical role in keeping the lights on in major urban centers for decades.  NWTX installations have been highly reliable as silent “partners” in the provision of power critical to commerce, industry and government offices.  Secondary and spot networks have proven their worth as they have continued to work in a near “fail-safe” environment.  This is often seen in power outages occurring in the same metropolitan area not being served by such distribution network configurations.

The combined network transformer market in the US and Canada likely reached/crossed the $100 Million level  in 2021. The bulk of the market (85-90%) is usually comprised of sales of 3p units.  This estimated market size  seems realistic in light of the annual unit replacement rate (based on a 35-year life expectancy) and moderate levels of net new shipments. We had excellent support from ARC Advisory, which firm partnered with us in undertaking this baseline study.

Next month, our posting will include excerpts from recent studies of distribution line sensors, trends in application of voltage regulation devices, electric vehicle adoption trends and a mid-range outlook for grid modernization programs

 – Chuck Newton