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INTELLIGENCE AND VISIBILITY AT THE EDGE OF THE ENERGY GRID
Analysts project that global energy demand could more than double by 2050.1 Sustaining this growth while achieving grid decarbonization requires scaling renewable energy deployment by 9× and doubling grid efficiency.2 To meet these demands, a real-time, holistic view of energy spanning production, distribution, storage, and consumption is no longer a luxury but a necessity.
THE CRITICAL VISIBILITY GAP
Modernizing the grid does not stop at adding renewables or storage—it’s about fundamentally transforming how the grid senses, understands, and responds to energy demands in real time. Despite the exponential growth of decentralized energy assets like solar, wind, and energy storage systems (ESS), a core challenge remains limited visibility across both assets and energy flow. This gap in visibility creates significant challenges for utility companies, affecting their capital expenditures (CAPEX), operational expenditures (OPEX), and safety protocols.
EVOLVING LEGACY SYSTEMS AND ARCHITECTURE
The energy grid, often described as the world’s largest machine, was designed over a century ago in a hub-and-spoke model, where energy flowed in one direction—from large power stations to consumers. This centralized model suited the simpler, more predictable energy landscape of that bygone era.
However, this centralized grid model grows increasingly inadequate. It cannot support growing energy demands and the integration of distributed energy resources (DERs), nor can it provide the necessary resilience to disruptions. Enter the decentralized energy grid: a more interconnected network that incorporates small, distributed energy generation sources feeding into the larger grid. Its architecture supports bidirectional energy flows, enabling consumers to become prosumers, selling their excess energy back to the grid and energizing new markets.
While this decentralized grid architecture promotes grid resiliency, it introduces a critical visibility challenge. The sheer number of behind-the-meter assets hinder effective monitoring, prediction, and real-time response to disruptions.
VISIBILITY: THE KEY TO BETTER ENERGY MANAGEMENT
Visibility enables insights that, in turn, drive intelligence. Comprehensive grid-scale intelligence is essential for managing the increasingly complex energy ecosystem. Visibility is vital to achieve:
- Balancing Energy Generation, Usage, and Storage: Ensuring energy resources are efficiently utilized and operational capacity is maximized.
- Monitoring Asset Health: Detecting, localizing, and predicting faults to avoid downtime and ensure safety.
- Integrating Distributed Energy Resources (DERs): Maintaining power quality and grid stability while onboarding new assets.
- Leveraging Prosumers: Empowering consumers to contribute to grid operations, particularly through technologies like electric vehicles (EVs).
The grid must respond rapidly to shifting energy consumption patterns, disruptions, and anomaly detection. As the grid complexity increases, especially with more DERs, accurate modeling of an energy grid’s physical and electrical connections becomes indispensable. This calls for enhanced coordination, continuous monitoring, and real-time intelligence.
CENTRALIZED CONTROL AND DISTRIBUTED CONTROL
Traditional intelligence systems, which rely on centralized data centers with high bandwidth connectivity, offer economies of scale for data-heavy computation. However, they fall short when it comes to the ultralow latency, power efficiency, and real-time performance required by the smart grid. Additionally, these centralized systems have limitations with regards to optimal data privacy and security.
This is where distributed intelligence at the edge of the grid becomes critical. The edge—the convergence of analog sensing and digitalization—enables multipoint decisions, offering more responsive, efficient, and secure solutions. By moving decision-making closer to the energy source, we can optimize grid operations and enhance resiliency.
Reliable grid intelligence requires identifying synergies between the complementary strengths of centralized and distributed control, delivering a flexible network architecture to optimize processing capabilities.
A SMARTER APPROACH: ENABLING INTELLIGENCE AT THE EDGE OF THE GRID
The distributed nature of modern energy assets—such as renewable generators, storage systems, electric vehicles, homes, and industrial facilities—has given rise to the Intelligent Edge. Here, data from sensors and devices can be processed locally, allowing for faster, more accurate decision-making. By enabling real-time insights at key points of the energy network—such as substations, battery packs, factories, or data centers—intelligence at the edge improves resiliency, responsiveness, and operational efficiency.
Extending effective energy management to behind-the-meter applications presents a high growth opportunity to empower individuals and businesses to participate in the energy transition. From data centers to microgrids and home energy management systems, intelligence at the edge can improve energy efficiency, power quality, and cost savings, while delivering a sophisticated solution for prosumers.
Energy management is no longer solely about central control. It’s about empowering devices, sensors, and systems to make decisions at the point of need, driving the next level of grid optimization.
A Data-Driven Approach to Scaling Grid Modernization
Grid modernization is a massive, complex undertaking, but it is also an opportunity to unlock value through data-driven decision-making. We must leverage existing infrastructure while integrating new technologies to improve digitization, platformization, and co-creation of value.
A data-centric approach to grid modernization involves visibility across every level of the grid—from the transmission network down to the smallest distribution nodes and metering points. By collecting and analyzing data, we can identify inefficiencies, optimize investments, and ensure more accurate impact measurement.
Moreover, this intelligence at every node creates a feedback loop that sustains modernization efforts and improves return on investment (ROI).
Key Opportunities to Energize Grid ModernizationTo effectively modernize and maximize the utilization of the grid.
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REAL-WORLD INNOVATIONS LEADING THE WAY TO A RESILIENT, SUSTAINABLE GRID
The future of energy will be shaped by how we apply intelligence at the edge of the grid to drive innovation and the impact it has on our world. These technologies are already being applied to real-world scenarios:
Renewable Generation
Optimizing output and integrating variable energy sources like wind and solar.
Energy Storage Systems
Ensuring the efficient storage and dispatch of renewable energy.
Transmission and Distribution
Monitoring and managing energy flow across vast networks.
Advanced Metering Infrastructure (AMI) and Sub-Meters
Providing real-time consumption data to consumers and utilities and monitoring power quality.
EV Charging Infrastructure
Integrating electric vehicle charging into the broader grid.
Data Center
Driving growth of data centers by enabling more adaptive energy consumption, and interactions with the energy grid.
ENERGIZING THE FUTURE OF THE ENERGY ECOSYSTEM
The energy sector requires innovations in contactless sensing, localized processing, interactive software, and modular system designs to push intelligence to the edge of the grid. Identifying synergies between centralized and distributed intelligence can accelerate digitalization of the grid and give rise to the next wave of advances in renewable generation, energy storage, transmission and distribution, smart meters, EV charging infrastructure, and data centers.
Grid modernization isn’t optional, and a structured approach to modernization is essential. Market leaders with broad expertise across sectors that intersect with the energy grid can help accelerate this shift, transforming the grid into a distributed center of intelligence.
The next phase will demand continuous innovation and a commitment to sustainability. The energy ecosystem must become more adaptive, efficient, and intelligent—delivering reliable power while empowering communities worldwide to thrive in a rapidly evolving landscape.
References
1 Global Energy Perspective 2024. McKinsey & Company. September 2025
2 ADI analysis based on figures from “The economic transformation: What would we change in the net-zero transition.” McKinsey & Company. January 24, 2022.
