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November 2025 - Utilities

Almost two thirds of utility leaders have increased their innovation budget over the past year, according to new research: The report found that 64% of leaders have expanded their innovation budget, helping to fuel a 15% increase in overall spending by surveyed utilities providers. This suggests that the industry is looking to not only embrace innovation but also accelerate its implementation. 

National Grid Partners and RepData distributed the second annual Utility Innovators Survey, prepared by Method Research, over a nearly two-month period from June 5 to July 30, 2025. It gathered responses from 166 leaders involved in innovation at global utility companies. With the utility industry under immense pressure to modernise, whilst striving to meet net zero goals and continuing to deliver an affordable service, the survey aimed to benchmark innovation progress and uncover challenges faced. 

Across the board, the focus on, and commitment to, innovation appears to be steadily increasing within the utility industry, as almost seven in ten (69%) respondents state it is now deeply embedded across all business units. This is a notable change from 2024 where, in contrast, two thirds (66%) of leaders said the remit of innovation was limited to centralized, siloed teams. The research also revealed a clear rise in the volume of innovation projects moving from the drawing board to implementation (having increased by a third, from 24% to 32% year on year), further highlighting the expansion of these practices.

In addition to investing in new projects, the report found that utility leaders are seeking collaborations and expanding business relations as a way to generate new ideas and ways of thinking. Over the last year over two fifths (42%) reported working with startup businesses as a means to promote innovation, compared to just over a quarter (26%) of those surveyed in 2024.

Perhaps unsurprisingly, the use of artificial intelligence has emerged as a new strategic focus area for innovation across the utilities industry; AI was cited as a key development area by a staggering 96% of respondents. Currently a mere 4% say their company has a well-developed and funded AI programme, but more than two fifths (42%) say they are preparing to utilise AI within the next two years to help with specific use cases such as regulatory reporting and employee training. 

Unfortunately, despite their AI ambitions, many global leaders have identified numerous barriers to the deployment of AI within the industry. Almost two thirds (66%) claim the ‘talent gap’ is making it more difficult to implement AI measures effectively. Other obstacles noted include data privacy challenges (65%), high implementation costs (64%) and integration with existing systems (39%). 

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