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National Grid Partners

As the energy sector experiences an unprecedented shift, National Grid Partners continues to explore and shape the future of utility innovation. Our latest comprehensive survey captures how the industry is adapting to the challenges created by the global clean energy transition.

Charting the Course for the Future: Insights from National Grid Partners’ First Utility Innovation Survey

The widespread adoption of electric vehicles, the move toward decarbonization of heating, and demand growth driven by data centers has rapidly transformed energy consumption patterns, creating an extraordinary demand for power. Simultaneously, utilities are grappling with mounting pressure to meet ambitious net-zero goals, further accelerating the need for innovative solutions.

However, the survey reveals a significant challenge: the current regulatory framework often impedes rather than encourages the innovation required to meet growing demand.

National Grid Partners recognized the need to comprehensively assess the industry’s innovation paradigm. Addressing these challenges as the energy landscape evolves necessitates a coordinated effort by the industry’s stakeholders, including utilities, regulators, and technology partners.

The survey’s insights offer a pathway that provides a baseline understanding of innovation priorities, collaboration opportunities, and regulatory gaps that are needed to unlock innovation.

Why Conduct an Innovation Survey?

National Grid Partners conducted an online survey prepared by Method Research and distributed by RepData. We reached out to 219 leaders involved in innovation at utility companies across the United States, collecting data from January 24 to February 12, 2024.

Our Survey Approach

The survey identifies key areas for growth, including defining innovation across the industry, overcoming regulatory hurdles, and strengthening partnerships to drive progress.

Utilities do not have a shared definition of innovation, with 85% of leaders agreeing there’s a need for a common understanding, highlighting the importance of initiatives like the NextGrid Alliance and its mission to create industry-wide collaboration and standardization.

75% of utilities have a dedicated innovation budget both annually and quarterly.

66% of utilities center innovation as a corporate function.

Yet, on average, they spend just 24% of their innovation budget on operations and programming.

So despite significant financial commitment to innovation, utilities struggle to implement and operationalize their ideas effectively, highlighting the need for a unified industry-wide approach.

While 72% of leaders believe innovation is primarily driven by regulation, the current framework often limits progress by rewarding utilities for investing in traditional infrastructure development rather than embracing new technological solutions.

66% agree that upcoming disclosure laws will change how they do business.

54% are looking for ways to ramp up electric capacity, given expected increases in demand.

29% of utility innovation leaders say compliance is their company’s top priority.

Given that the regulatory environment continues to shape utility operations, the industry must balance compliance with the urgent need to expand capacity.

Partnerships between utilities and cleantech companies are driving innovation in the sector, evidenced by the percentage of NextGrid Alliance members collaborating with startups increasing from 23% in 2021 to 90% in 2024. This facilitates faster technology development and deployment in grid management, renewable integration, and energy efficiency. However, collaboration is still limited across the industry. 

18% of utilities currently use startup solutions as vendors.

18% of utilities co-innovate or partner with startups.

10% of utilities invest in startups to drive innovation.

While partnerships between utilities and cleantech companies have grown significantly, there remains room for deeper and broader integration.

Key Takeaways from the Utility Innovation Survey

As we continue to stimulate industry-wide collaboration, the NGA sets a clear path forward, focusing on critical areas essential to scaling innovation. NGA’s main objectives are to build a unique co-innovation platform for collaboration for utilities by utilities, access insights and case studies by tapping into the collective intelligence of the industry, and develop relationships and partnerships to move the industry forward and innovate faster, together.

Curate working groups on critical topics to share insights and best practices to help its members meet their climate goals

Expand the cleantech startup ecosystem accessible to utilities

Collaborate with regulators to create frameworks that foster innovation

Download the full Utility Innovation Survey white paper here to learn more about the latest trends and insights.

The Future Is Now

Ishneet Kaur is a Director of Innovation at National Grid Partners. Ishneet has worked across multiple functions at National Grid Partners giving her an in-depth understanding of how to drive innovation to solve real business needs. Ishneet has directed many initiatives, from designing proof-of-concepts to defining KPIs, breaking down information silos and leading Group Innovation Reporting to quantify the financial and non-financial impact of innovation at National Grid. Ishneet previously worked at McKinsey & Company focusing on risk management, anti-money laundering and due diligence for the banking sector. She holds an M.S. in Applied Economics and Management from Cornell University.