Nine out of 10 energy and utility providers to fully deploy AIOps by mid-2026: Report

Artificial intelligence (AI) adoption is increasing rapidly in the energy and utilities sector with over 55% organisation have already deployed AIOps capabilities. Moreover, by mid-2026, 89% plan to have AIOps fully deployed, revealed the latest report by observability platform New Relic. The "State of Observability for Energy and Utilities" report also stated that these providers incur a median annual outage cost of $34.31 million, the highest among all industries.

Observability and ROI

Based on insights from 132 technology professionals, the report underscores the financial impact and importance of observability. An impressive 66% of respondents indicated that their organizations gain $1 million or more in total value annually from their observability investments, with energy and utilities organizations achieving nearly a 3x median annual return on investment. Observability is deemed crucial, with 50% of IT decision-makers noting its role in establishing a technology strategy.

“Nobody wants their lights to go out without warning. This means that uptime and reliability is a top priority for energy and utilities providers,” said Peter Pezaris, New Relic's Chief Design and Strategy Officer. “Implementing and maturing their observability practice offers a path forward for energy and utilities providers, creating greater visibility and faster time to resolution.”

AI Adoption in Energy and Utilities

Artificial intelligence (AI) adoption is increasing, with over 55% of energy and utilities organizations deploying AIOps capabilities, including anomaly detection, incident intelligence, and root cause analysis. By mid-2026, 89% plan to have AIOps fully deployed. AI helps organizations handle large data sets, improving operational efficiency and response times by providing actionable insights into system performance and enhancing incident detection and resolution.

Impact of Outages and Full-Stack Observability

Energy and utilities providers experience outages more frequently than other industries, with 40% reporting high-impact outages at least once a week, significantly higher than the 32% average across sectors. The median annual downtime for these organizations stands at 37 hours, 61% higher than the overall average of 23 hours. This downtime results in substantial financial losses, with a median annual outage cost of $34.31 million.

Organizations that achieve full-stack observability report notable improvements in mean time to resolution (MTTR). About 87% of those with full-stack observability saw some improvement in MTTR, compared to 76% of those without it. Despite a slight increase in single-tool usage from 2% to 3%, the average number of tools used remains at six, indicating significant time and money spent on tool-hopping to resolve issues.

“Observability platforms are proving to be crucial for energy and utility providers across India. As uptime and reliability become paramount to avoiding service disruptions, implementing and maturing observability practices offers a clear path forward. By gaining greater visibility into their IT infrastructure, energy and utilities providers can achieve faster time to resolution for issues, ensuring the lights stay on and operations run smoothly," said Peter Marelas, Chief Architect, APJ, New Relic.

Focus on Security

With energy and utilities providers being prime targets for cyberattacks, security monitoring has become a top priority. Currently, 68% of these organizations have deployed security monitoring capabilities, with nearly all (99%) expecting to have them by mid-2026. The leading technology strategy driving the need for observability is an increased focus on security, governance, risk, and compliance (44%).

Another report by UiPath said Generative artificial intelligence (Gen AI) tools are helping employees save time. the combination of GenAI and business automation tools offers significantly greater benefits.  

Virtual twin technology is gaining significant traction across various industries in India, according to a report by Dassault Systèmes and NASSCOM published on June 17. The adoption of virtual twins is playing a crucial role in speeding up the design-to-realisation process, aiding organizations in achieving sustainability and circularity goals throughout the value chain. Despite these advancements, the report reveals that 57% of Indian enterprises still allocate less than 30% of their technology budgets to digital efforts.

Additionally, a report by UiPath highlights the impact of generative artificial intelligence (Gen AI) tools in the workplace. These tools are helping employees save time, and when combined with business automation tools, they offer even greater benefits.