Electric utilities plan to invest a record $5.9 billion to modernize their grids next year, but the bulk will be spent on reinforcing existing infrastructure.
Why it matters: Grid planners have adopted a bunker mentality in the face of recent extreme weather and catastrophic outages, and that's good news for the startups working to upgrade grid assets.
What's happening: Spending on grid upgrades will jump 71% this year alone, per a Wood Mackenzie analysis of 25 investor-owned utilities in the U.S.
- Those utilities plan to allocate nearly half of their investments toward resilience measures such as hardier poles and wires.
- A comparatively smaller share is allocated toward deploying and managing distributed energy resources like solar, wind and battery storage — the "DERs" referenced in the chart above.
Be smart: Distributed resources make a grid more resilient. Decentralized systems are less prone to full-scale outages, and devices such as advanced meters enable utilities to remotely monitor and reduce demand in real-time.
Plus: Utilities are spending differently based on where they're located. The storm-battered Southeast is putting more money toward grid hardening; the supply-constrained Northeast is prioritizing advanced meters.
Between the lines: Keeping the lights on is a utility's central mandate — and for investor-owned utilities, a sure way to keep its shareholders happy.
State of play: The move to prioritize resilience is good news for the startups working squarely in that area. They include:
- Power-line monitoring and analytics provider LineVision;
- Resilient transmission-line manufacturer TS Conductor;
- And bend-not-snap pole-maker RS Technologies.