2023 power and utilities industry outlook

Electric power sector weighs promising trends amid cost and climate woes

2022 was a year of perils and promise for the electric power sector. US electricity sales continued to rise as the pandemic recovery progressed, increasing 3.6% in the first eight months compared to the prior year.¹ But costs also spiked, largely due to natural gas prices more than doubling on global shortages exacerbated by Russia’s invasion of Ukraine. Extreme climate events—from droughts to hurricanes, heat waves and wildfires—continued to test regional grid resilience.² In response, the industry and policymakers worked to bolster reserves, deploy energy storage and microgrids, harden infrastructure, and strengthen flexible load options.³

In 2023, these promising developments will likely evolve further. But providing secure, reliable, affordable, and clean electricity could become even more challenging. Inflation, high fuel costs, and supply chain snarls may keep electricity prices elevated, while extreme weather, cybersecurity threats, and the growth of variable renewables and distributed energy resources may continue to require innovative management to ensure grid reliability. Despite these challenges, new technologies and supportive policies could ripen opportunities in 2023 and help the industry achieve its goals. Explore the five trends that will likely influence the direction of the industry over the next 12 months.