The research finds utilities are turning to grid hardening, new energy sources and storage
New research from IFS, the leading provider of Industrial AI software, reveals a dramatic pendulum shift across global energy & utilities investment priorities, previously dominated by sustainability and decarbonization goals.
Aging infrastructure, affordability pressures, and reliability challenges are forcing utility leaders to adopt a more balanced investment strategy to strengthen core operations and advance the energy transition.
The research finds utilities are turning to grid hardening, new energy sources and storage, and better asset lifecycle management, all underpinned by Industrial AI to optimize performance, improve resilience, and deliver better outcomes for customers and regulators.
New global study
The new global study, conducted by Censuswide and spanning 850 C-level and senior utility executives, highlights a sector operating under immense multi-front pressures driven by unprecedented load growth from data centers and electrification and 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,” explained Carol Johnston, VP, Energy, Utilities & Resources, IFS.
Here are the key findings:
- Hardening existing grid reliability to build grid resilience against extreme weather events and cyber threats tops operational priorities, identified as the most critical operational challenges facing utility leaders today.
- Industrial AI is emerging as the critical layer required to unite fragmented systems, predict equipment failures before they trigger grid downtime, and automate complex operational workflows.
- Asset lifecycle management is becoming the battleground for utility modernization and bridging operational silos
- The research evidences that new technology adoption is hindered by foundational data challenges –49% are constrained by operational data silos that hinder real-time decision-making.
Capital investment
As utilities struggle to balance capital investment between maintaining legacy infrastructure and expanding capacity, traditional grid management methods are reaching their limit.
The research highlights a growing shift toward grid flexibility, including Battery Energy Storage Systems (BESS) and Distributed Energy Resource Management Systems (DERMS), to manage demand volatility and protect against prolonged outages.
Looking ahead, utility leaders predict advanced geothermal (22%) and Small Modular Reactors (SMRs) (18%) will have the greatest long-term impact on securing continuous clean baseload power. while 46% say AI is critical for accelerating renewable and distributed energy integration.
