Smart Grids Gain Momentum as Utilities Modernize Power

Utilities accelerate smart grid upgrades to handle rising demand, renewable power, and reliability pressures

8 Jan 2026

North American utilities are accelerating investment in digital technologies to modernise power grids, responding to rising electricity demand, clean energy targets and the limits of ageing infrastructure.

What was once treated as routine maintenance is increasingly seen as a strategic overhaul. Utilities are deploying so-called smart grids that rely on software, data analytics and automation to manage electricity systems where power no longer flows in a single direction. Rooftop solar panels, wind farms, batteries and conventional power plants now feed the grid at the same time, adding complexity to daily operations.

Rather than pursuing large mergers, many utilities are forming partnerships with technology groups. These collaborations aim to bring cloud computing and advanced analytics into grid planning and real-time operations. A recent partnership between Microsoft and the Midcontinent Independent System Operator, which oversees electricity markets across much of the central US, highlights how digital platforms are being used to improve forecasting and reliability over wide geographic areas.

The drivers are structural. Electric vehicles, data centres and the electrification of buildings are pushing up demand, while wind and solar generation add variability that older networks were not designed to manage. Digital tools allow operators to monitor conditions more closely and adjust supply and demand automatically, reducing the risk of outages.

Large industrial suppliers are positioning themselves as long-term partners in this transition. Schneider Electric is expanding its range of integrated offerings that combine hardware, software and services. Siemens continues to invest in digital grid systems aimed at improving efficiency and resilience. GE Vernova is also active, providing planning, analytics and automation tools. Together, these companies reflect a broader shift towards end-to-end digital systems rather than stand-alone equipment.

Public policy is reinforcing the trend. Government incentives linked to grid resilience and clean energy are supporting investment, while regulators are increasingly focused on performance-based outcomes rather than the expansion of physical assets alone.

Challenges remain, including cybersecurity risks and shortages of skilled workers. Even so, utilities and policymakers broadly agree that grid modernisation is no longer optional, but central to running a power system shaped by electrification and decentralised energy.