IFS research shows utilities prioritising grid hardening, storage and Industrial AI to boost reliability, manage demand and control costs while advancing the energy transition.

LONDON, Sept. 24, 2026 /PRNewswire/ -- New research from IFS, the leading provider of Industrial AI software, reveals a dramatic pendulum shift across global energy and 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.

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.

Carol Johnston, VP of Energy and Utilities at IFS, puts the findings into perspective: "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."

Here are the key findings:

Hardening grid reliability top of mind

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. This has led to energy and utilities organizations re-evaluating existing infrastructure - with 26% actively re-evaluating asset portfolios to prioritize investment in existing grid infrastructure.

AI is now considered essential for the energy transition

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. No surprise that 57% of utility leaders believe AI is critical for reducing operational costs, while nearly half (47%) say AI is critical for optimizing asset performance and managing electrification-driven demand growth.

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. Despite heavy investment, most utilities remain in the "developing" stage of asset lifecycle management, with siloed systems and limited predictive capabilities - only 33% describe their asset lifecycle management capabilities as advanced, with 51% of claiming they have asset management systems in place, but operate in silos, with limited predictive capabilities. This clearly highlights utilities' appetite for a modernized asset management approach being central to resilience, reliability, and investment planning.

Carol Johnston, VP, Energy, Utilities and Resources, IFS, is clear: "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."

Preparing the grid of tomorrow - new storage, sources, and security

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.

The findings reinforce that digital transformation strategies in energy and utilities must prioritize measurable operational outcomes - specifically grid uptime, customer experience, and regulatory compliance - over generic software adoption. By combining unified asset lifecycle management with purpose-built Industrial AI, utilities can secure supply, protect critical infrastructure, and build a flexible foundation for future clean generation technologies.

The full Censuswide report, commissioned by IFS, will be available at the end of September. To find out more information, visit ifs.com or contact us via press@ifs.com(Opens in a new tab).

Join IFS at Unleashed 2026, October 12-16 in Orlando, Florida to learn how energy and utilities organizations are leveraging Industrial AI to meet the grid challenges of today and tomorrow. Register at unleashed.ifs.com(Opens in a new tab)

IFS Press Contacts:

EUROPE / MEA / APJ: Adam Gillbe
IFS, Director of Corporate and Executive Communications
Email: adam.gillbe@ifs.com(Opens in a new tab)

NORTH AMERICA / LATAM: Mairi Morgan
IFS, Director of Corporate and Executive Communications
Email: mairi.morgan@ifs.com(Opens in a new tab)

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