Research Finds Grid Resilience and Energy Affordability Emerging as Key Priorities for Utilities
Grid resilience, energy affordability and the reliability of existing infrastructure are emerging as key priorities for utilities as the sector reassesses investment strategies that have traditionally focused heavily on sustainability and decarbonisation.
New research commissioned by IFS and conducted by Censuswide, based on responses from 850 C-level and senior utility executives globally, shows utilities are seeking a more balanced approach to investment. Alongside the energy transition, organisations are focusing on grid hardening, new energy sources and storage, and improved asset lifecycle management.
The findings come as utilities face pressure from several fronts, including rising electricity demand linked to data centres and electrification, ageing infrastructure and increasingly frequent extreme weather events.
“The pendulum in the energy sector has swung fast. Sustainability continues to be a critical objective for utilities, but evolving operational and geopolitical realities are driving a more balanced investment agenda. Decades of under-investment, coupled with rigid regulatory rate cases and an aging grid, have created an operational environment where reliability, resilience, and affordability must be addressed simultaneously,” said Carol Johnston, VP of Energy, Utilities & Resources at IFS.
Grid resilience moves up the agenda
Improving the reliability of existing grids and strengthening them against extreme weather and cyber threats are among the most significant operational challenges identified by utility leaders. The pressure is also prompting organisations to reassess how they allocate capital across existing infrastructure. According to the research, 26% of respondents said they are actively re-evaluating asset portfolios to prioritise investment in existing grid infrastructure.
For utilities, this reflects the challenge of maintaining ageing infrastructure while simultaneously funding new capacity and supporting the transition towards lower-carbon energy systems.
AI gains a role in operational decision-making
Artificial intelligence is also emerging as an important technology for managing increasingly complex utility operations. Some 57% of utility leaders said AI is critical to reducing operational costs, while 47% identified it as critical to optimising asset performance and managing demand growth driven by electrification.
The research suggests that utilities are looking beyond AI as a standalone technology and towards its use in areas such as predictive maintenance, operational decision-making and the automation of complex workflows.
Data silos remain a barrier to modernisation
However, the research highlights persistent challenges with the underlying technology and data infrastructure needed to support these ambitions. Nearly half (49%) of respondents said operational data silos are limiting real-time decision-making. While utilities have continued to invest in asset management technology, many organisations still operate with fragmented systems and limited predictive capabilities.
Only 33% of respondents described their asset lifecycle management capabilities as advanced. A further 51% said they have asset management systems in place but that these operate in silos and offer limited predictive capabilities. The findings point to asset lifecycle management as an important area for utilities seeking to improve resilience, reliability and long-term investment planning.
“Utilities cannot invest their way out of today’s challenges through new infrastructure alone. Addressing growing demand and affordability pressures requires a balanced strategy that gets more from existing assets while making smart investments in new capacity, grid modernization, and resiliency. Industrial AI provides the decision intelligence needed to optimize asset performance, maximize returns on capital, and maintain reliable service in an increasingly complex operating environment,” said Johnston.
Storage and new energy sources gain attention
The need to balance investment in existing infrastructure with expanding generation and grid capacity is also driving interest in technologies designed to increase flexibility. The research highlights Battery Energy Storage Systems (BESS) and Distributed Energy Resource Management Systems (DERMS) as potential tools for managing demand volatility and mitigating the impact of prolonged outages.
Looking further ahead, 22% of utility leaders expect advanced geothermal energy to have a significant long-term impact on securing continuous clean baseload power, while 18% identified Small Modular Reactors (SMRs). Meanwhile, 46% said AI is critical to accelerating the integration of renewable and distributed energy resources.
The findings indicate that utilities are increasingly evaluating technology investments according to their ability to address practical operational challenges, including grid reliability, customer service and regulatory requirements.
For the sector, the challenge will be to modernise ageing infrastructure while expanding capacity and integrating new sources of generation. Improving asset visibility, reducing data fragmentation and applying AI to operational processes could form part of that broader effort.
