Utilities Shift Priorities to Grid Resilience and Energy Affordability, Research Finds

Global energy and utility companies are significantly shifting their investment priorities, moving away from a sole focus on sustainability towards strengthening grid resilience and ensuring energy affordability, according to new research from IFS. The study highlights that aging infrastructure, cost pressures, and reliability challenges are forcing a more balanced approach, with increased focus on grid hardening, new energy sources and storage, and enhanced asset lifecycle management, all supported by Industrial AI.

The research, which surveyed 850 senior executives in the energy and utilities sector, indicates that companies are grappling with unprecedented load growth from data centers and electrification, alongside the impact of extreme weather events. "Sustainability continues to be a critical objective, but evolving operational and geopolitical realities are driving a more balanced investment agenda," said Carol Johnston, VP of Energy and Utilities at IFS. She emphasized that decades of under-investment, coupled with an aging grid, necessitate addressing reliability, resilience, and affordability simultaneously.

Grid hardening to withstand extreme weather and cyber threats is now a top operational priority. Consequently, 26% of companies are re-evaluating their asset portfolios to prioritize investments in existing grid infrastructure. Industrial AI is emerging as a key technology for unifying fragmented systems, predicting equipment failures, and automating complex workflows. The study found that 57% of utility leaders believe AI is critical for reducing operational costs, while 47% see it as essential for optimizing asset performance and managing demand growth driven by electrification.

Challenges related to aging infrastructure and data silos are hindering the adoption of new technologies. Nearly half (49%) of companies are constrained by operational data silos that impede real-time decision-making. Despite significant investments, most utilities are still in the early stages of asset lifecycle management, with limited predictive capabilities. Only 33% describe their asset lifecycle management as advanced, highlighting a need for modernized approaches to asset management that are central to resilience, reliability, and investment planning.

The future grid is increasingly expected to rely on flexibility solutions such as Battery Energy Storage Systems (BESS) and Distributed Energy Resource Management Systems (DERMS) to manage demand volatility and protect against outages. Looking further ahead, advanced geothermal energy (22%) and Small Modular Reactors (SMRs) (18%) are predicted to have the most significant long-term impact on securing continuous clean baseload power. IFS advises that digital transformation strategies must prioritize measurable operational outcomes, including grid uptime and customer experience.