Siemens: Why AI is Essential for Grid Transformation

Digital technologies such as AI, grid software and smart meters are viewed as essential to enabling the energy transition by more than 70% of energy sector executives, according to a new global survey by Siemens.

The Infrastructure Transition Monitor 2025, which draws on responses from 1,400 executives across multiple industries, indicates that resilient energy supply has risen to become the top policy priority for governments, up from third place in 2023.

The survey's findings emerge at a time when global investment in clean energy has grown from US$1.9tn in 2023 to US$2.2t in 2025, based on International Energy Agency data referenced in the report.

Meanwhile, investment in fossil fuels has experienced a slight decline over the same period, falling from US$1.2tn to US$1.1tn.

Considerable progress has been reported by respondents on several infrastructure transition goals, with nearly twice as many describing themselves as "mature or advanced" compared to 2023 in areas such as national energy independence, large-scale energy storage expansion and renewable energy deployment.

Regulatory barriers to grid modernisation

Nearly two-thirds of respondents identify regulatory, political and economic uncertainty as key threats to progress.

Sabine Erlinghagen, CEO of Siemens Grid Software, says: "Regulation still favours copper over software – capital over operational expenditure.

"Add to that the strict separation of retailers and grid operators, which prevents the grid operator from being close enough to customers to assess demand and flexibility opportunities."

Confidence in national decarbonisation strategies has risen markedly, with 63% of respondents indicating their country has an effective plan, up from 47% in 2023.

Digital transformation in utility operations

The increasing integration of distributed energy resources such as solar panels and electric vehicles is generating visibility challenges for grid operators, particularly in low-voltage networks.

Dr G Ganesh Das, Chief of Collaboration and Innovation at Tata Power Company, says: "Demand patterns, per capita consumption and customer expectations have changed drastically.

"That's encouraged utilities to adopt digital tools, optimise supply-demand gaps and predict consumer behaviour.

"It's a shift from being reactive to proactive."

AI is already strengthening infrastructure resilience according to three-quarters of energy respondents.

Thomas Kiessling, CTO of Siemens Smart Infrastructure, says: "If there's no wind but plenty of sun, the system can ramp up EV charging to avoid curtailing solar."

Building flexibility markets globally

The survey revealed that 63% of respondents believe the benefits of autonomous grid systems outweigh the costs, whilst 62% indicate their region is ready to implement such systems.

However, the fragmentation of platforms, systems and standards remains a significant obstacle to the full-scale implementation of autonomous grids.

Most respondents (62%) consider that different parts of the energy system should be managed as a single coordinated whole, requiring greater collaboration between government, utilities and technology providers.

Daniela Haldy-Sellmann, SVP at SAP, says: "We're not just building infrastructure anymore. We're building flexibility markets.

"That's the only way to respond fast enough, cost-effectively, across borders."