Utilities at the crossroads of demand growth and sustainability

As the energy landscape shifts, the power utility industry finds itself at a critical juncture. Soaring energy demands, increasingly complex industry regulations and the challenge of modernising grid infrastructure are top priority topics. At the same time, governments and industry experts are striving to reduce the environmental impact of energy generation while meeting the rising needs of electrification across sectors - buildings, transportation and data centres supporting artificial intelligence (AI) applications.

All of this presents a significant challenge, but as an intelligent power management company we believe that strategic investments and innovation can help the utility industry lead the way into a more flexible energy future. This will be a future in which supply is orchestrated from many sources, including commercial scale and domestic renewables, and demand is balanced by increasingly intelligent software to underpin day-to-day reliability.

Key utility trends in 2025

Several major themes are shaping the utility landscape in 2025:

• Grid modernisation: There is a strong focus on grid modernisation to handle unprecedented load growth and boost reliability. With global electricity demand expected to rise by 3.4% annually through 2026 (according to the International Energy Agency), utilities must accelerate their pace of change. Continued digital transformation will also be essential to build more adaptive and secure energy systems, driven by the need for regulatory compliance and effective data management.
• Regulatory pressures: New regulations, such as the European Union’s (EU’s) SF₆ phase-out in medium voltage switchgear, are forcing utilities to adopt more sustainable technologies. Is is driving the industry towards greener solutions while ensuring compliance with increasingly strict environmental standards.
• Digital transformation: Advanced technologies such as digital twins and edge computing are becoming indispensable, as software platforms evolve, to provide the granular view and grid edge leverage that system operators need to manage a modern electricity network successfully.

Regulatory shifts: Adapting to SF₆-free standards

The utility sector has been adopting decarbonisation strategies for many years, but new regulatory shifts are accelerating the transition. A major example is the European Union’s revised F-gas Regulation, which will ban Sulphur Hexafluoride (SF₆) in new medium-voltage switchgear installations up to 24 kV effective from January 2026.

SF₆, a potent greenhouse gas with a global warming potential 23,500 times greater than CO₂, has long been used in electrical switchgear due to its superior insulating properties. In 2018 alone, according to U.S. Environmental Protection Agency (EPA) research, SF₆ waste emissions were equivalent to the pollution generated by 44 million cars annually. The power industry accounts for a significant share of these emissions, and the EU’s decision to phase out SF₆ is a game-changer.

While this regulation applies primarily to Europe, utilities worldwide are likely to adopt SF₆-free alternatives to benefit from their improved efficiency, lower maintenance requirements and alignment with sustainability goals.

Grid modernisation: Addressing the electrification boom

Electrification is driving an unprecedented surge in energy consumption. Many nations are introducing policies aimed at reducing emissions by promoting renewable energy adoption, with technologies like heat pumps, electric vehicles (EVs), and smart charging infrastructure becoming more widespread.

In addition, the exponential growth of energy-intensive data centres - essential for AI applications - is placing immense pressure on grids. By 2030, European electricity demand is projected to rise between 1% and 7% annually, with data centres alone accounting for up to 5% of the region’s power consumption, according to the global management consultancy firm McKinsey & Company.

To keep up, utilities must tackle grid congestion, voltage instability, and aging infrastructure. Targeted investments in Distributed Energy Resources (DERs), automation and energy storage solutions will be essential to enhancing grid flexibility. An optimized grid will not only manage diverse energy flows more efficiently but also reduce outages, ensuring a stable and resilient power supply.

The digital revolution in utilities

Digital transformation has evolved from an aspiration to an operational necessity. Technologies such as digital twins and edge computing are reshaping how utilities optimise performance and manage assets in real time:

• Digital twins: Virtual replicas of physical systems allow utilities to simulate different scenarios, optimise performance and anticipate vulnerabilities before they escalate into real-world issues.
• Edge computing: By processing data at the grid’s edge, utilities can enhance situational awareness and enable faster, localised decision-making in response to anomalies.

Additionally, cybersecurity remains a top priority. As utilities integrate smart grids and IoT-connected devices, the risk of cyberattacks increases. Staying ahead of threats requires a proactive approach - implementing robust security frameworks, collaborating with technology partners and continuously adapting to evolving risks.

Looking ahead: A smarter, greener energy future

The integration of AI-driven tools and cloud-based platforms will continue to shape power utility operations, making grids more adaptable, flexible and efficient. By embracing these innovations, utilities can successfully navigate the crossroads of demand growth and sustainability, ensuring a reliable energy future for generations to come.