Reliable and affordable access to electricity is fundamental for supporting the AI economy. Digital innovation is rapidly reshaping the electricity system, enabling greater efficiency, flexibility, and integration across generation, distribution, transmission and use. By harnessing digital technologies, including AI and connected devices, electricity systems are becoming more adaptive and resilient, supporting the growth of decentralised energy sources and empowering consumers and other end-users to play an active role in balancing supply and demand. These innovations further reduce operational costs and enhance system reliability. Moreover, as sustainable and reliable access to electricity is foundational to the operation of digital technologies like AI, digital innovation in electricity can help to support overall digital transformation of the economy.
This potential is highlighted by the rapid increases in digital patents in the energy system since 2014. However, despite this potential and the overall resilience of public funding for energy (IEA, 2025[2]), a falling share of these budgets are allocated to digital innovations in electricity systems. Policies can play an important role in fostering innovation – including by developing technical enablers to encourage a more interconnected energy system, enabling regulatory flexibility to try innovative business models, and empowering consumers through better, appropriate access to and control of energy data. Continued commitments to fostering digital innovation in the energy system can help to ensure the achievement of both energy and digital policy goals.