Power grid modernization

Source:| · IBM · | June 9, 2025

The catalyst to resilience and energy transition. A study in partnership with AspenTech.

Adapting to the future

Electric grids, pivotal to society, require continuous investment to enable resilience and security. The energy landscape is transforming, driven by a surge in renewable energy sources and the proliferation of DERs as well as electrification expansion with electric vehicles and other end-user devices. Utilities confront the challenge of managing both large-scale renewable resources and the intricacies of distributed systems, necessitating a paradigm shift in grid operations from unidirectional to bidirectional systems.

The energy mix now includes a diverse range of intermittent resources—solar, wind, geothermal, hydropower, nuclear, hydrogen, and fossil fuels. Meanwhile, developments such as electrification of industry, smart buildings, and increased adoption of energy-intensive technologies like artificial intelligence are escalating demand. This transformation is further complicated by extreme weather events, cybersecurity threats, and aging infrastructure, all of which underscore the need for a digital, data-driven grid.

Advanced technologies such as automated control, forecasting, and energy storage are critical in enabling grid reliability amid fluctuations in supply and demand. Digital tools offer a pathway to upgrading antiquated infrastructure, enhancing grid management, and improving performance. Real-time monitoring and predictive analytics are crucial for mitigating disruptions and preserving power reliability.

In new research from the IBM Institute for Business Value, we found that utilities are committed to building a smarter grid. In our survey of nearly 600 global C-suite and senior utility executives, all say their organizations have a grid modernization strategy and execution plan. We found that utilities are spending, on average, 9.8% of their annual revenue on grid modernization investments, which is over 40% of their overall transmission and distribution investments.