Managing electrical grids has never been easy, but the task has become more complicated over time. While electrical grids had few input points, major power plants, and were one-directional, things are different today: Solar roofs, wind farms, and so on have added many additional entry points for electricity, and consumers can use power grids bi-directionally, e.g. by loading their EVs at times of low power prices and passing stored electricity back into the grid at other times.

To top things off, electricity production from wind and solar is not constant over time, but is influenced by time of day, weather, etc.

Making sure that there is always enough electricity to match demand is a highly complex task, and Artificial Intelligence helps with that. AI algorithms can forecast what power demand will look like at certain times throughout the day, based on historic patterns and similar data.

With this very accurate supply and demand data, utilities can match them precisely, making sure that there are no blackouts. At the same time, utilities can reduce their CO2 emissions by making sure that fossil fuel is only burned during times when it is needed — and not when low-emission sources are sufficient to meet demand.

When power plants, transmission lines, and so on fail, this can result in huge economic damages, or even the loss of lives. Utilities that want to reduce this risk can use predictive maintenance tools, such as Digital Twinning or AI-powered sensor data scanning to find anomalies and emerging problems before equipment fails. Faulty or at-risk parts can then be exchanged before accidents occur, improving net uptime and reducing both costs and the risk of catastrophic failure.

Since utilities interact with millions of customers, customer service is a large and costly part of running a utility company. Artificial Intelligence tools, such as Chatbots and AI agents, can handle some of these tasks. This is good for customers, as they often can get a solution more quickly, and it helps utilities in bringing down costs and administrative load. 

The Winners

For growth-hungry investors, utilities aren’t their first choice, but there are other ways to get portfolio exposure to AI in the utilities trend.

Many large tech companies are involved, such as Microsoft (MSFT), which operates the Azure Data Manager for Energy — an AI-infused data platform that helps energy companies in storing, accessing, and analyzing data.

International Business Machines (IBM) is another large tech player that helps utilities, for example via Maximo, its tool for managing physical assets. Predicting when something will need replacement is a key use case for Maximo.

Alphabet (GOOG) is a major player in weather and climate data and related Artificial Intelligence tools. When utilities want to optimize their wind farms, for example, or predict power output across thousands of solar roofs, Google is a go-to partner.

Investors that are interested in broader exposure to the world of tech and Artificial Intelligence should take a look at our top picks.