PUBLISHER: The Business Research Company | PRODUCT CODE: 2087340
PUBLISHER: The Business Research Company | PRODUCT CODE: 2087340
Artificial Intelligence (AI) in energy and power refers to the application of advanced algorithms, machine learning, and data analytics to optimize the generation, transmission, distribution, and consumption of energy. AI systems analyze large volumes of data from smart grids, sensors, and energy infrastructure to automate decision-making, improve efficiency, and enhance grid reliability. The primary purpose of AI in the energy and power sector is to increase operational efficiency, reduce costs, and support the transition to sustainable energy systems.
The AI in energy and power market consists of sales, by entities (organizations, sole traders, or partnerships), of AI in energy and power that is used by a range of stakeholders, including electric utility companies, grid operators, energy producers, renewable energy plant owners, commercial and industrial energy users and residential consumers. AI applications are used both in real-time (such as in grid stability control or predictive maintenance) and for future-oriented tasks (such as long-term energy forecasting or infrastructure planning).
The global AI in energy and power market was valued at $1,728.5 million in 2020 which grew till 2025 at a compound annual growth rate (CAGR) of more than 26.00%.
Growing Investments In Grid Modernization
During the historic period, the artificial intelligence in the energy and power market was driven by the growing investments in grid modernization. Investments in grid modernization refers to funding and projects aimed at upgrading electricity grids with advanced technologies to improve reliability, efficiency, and integration of renewables. Investments in grid modernization have increased due to the growing integration of renewable energy, which requires advanced, flexible, and digitally controlled grids to manage variable power generation efficiently. Investments in grid modernization enable AI in energy and power by providing advanced sensors, smart meters, and real-time data infrastructure that AI algorithms use to optimize energy distribution, predict demand, and enhance grid reliability. For instance, in March 2025, according to energy news, the UK energy regulator Ofgem (Office of Gas and Electricity Markets) has accelerated approval for around $5.2 billion (£4.3 billion) in energy grid investment to strengthen the country's electricity network and support the transition to cleaner energy. The fast-tracked funding will enable upgrades to transmission and distribution infrastructure, helping to connect more renewable power projects, reduce grid congestion, and improve system resilience. This move aligns with the UK government's broader net-zero ambitions by ensuring the grid can handle rising electricity demand from renewables, electric vehicles, and electrification of heating, while also aiming to deliver long-term cost efficiency and energy security for consumers across the United Kingdom. Therefore, the artificial intelligence in the energy and power market was driven by the growing investments in grid modernization during the historic period.
Autonomous AI-Driven Optimization Of Energy Operations
Major companies operating in the AI in energy and power market are focusing on agentic AI platforms to autonomously optimize grid operations, enhance predictive maintenance, and enable real-time decision-making across energy systems. Agentic AI platform refers to an advanced artificial intelligence system designed with autonomous decision-making capabilities, enabling it to perceive data, set goals, and execute actions independently to optimize operations and outcomes without constant human intervention. For instance, in November 2025, Infosys Ltd., an India-based IT services and consulting company, launched an AI agent leveraging gen AI to boost energy sector operations. This delivers predictive insights, automates reporting, issues early warnings, and enhances safety, reliability, efficiency, and decision-making while reducing non-productive time.
The global AI in energy and power market is fairly fragmented, with a large number of small players operating in the market. The top ten competitors in the market made up 17.09% of the total market in 2024
Artificial Intelligence (AI) In Energy And Power Global Market Opportunities And Strategies To 2035 from The Business Research Company provides the strategists; marketers and senior management with the critical information they need to assess the global AI in energy and power market as it emerges from the COVID-19 shut down.
Where is the largest and fastest-growing market for AI in energy and power? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward? The AI in energy and power market global report from The Business Research Company answers all these questions and many more.
The report covers market characteristics; size and growth; segmentation; regional and country breakdowns; competitive landscape; market shares; trends and strategies for this market. It traces the market's history and forecasts market growth by geography. It places the market within the context of the wider AI in energy and power market; and compares it with other markets.