Why Utilities Are Moving Their Grids to the Cloud

Utilities turn to hybrid cloud tech to modernize the grid, boost reliability, and prepare for rising demand

21 Jan 2026

US electricity utilities are increasingly adopting cloud computing platforms as part of efforts to modernise the power grid, improve reliability and cope with rising demand and more volatile operating conditions.

The shift marks a change for an industry long associated with slow-moving infrastructure upgrades. Recent platform launches, partnerships and investment activity suggest cloud technology is becoming a central tool for managing the stresses created by extreme weather, growing electricity use and the transition to cleaner energy.

At the centre of the change is data. Smart meters, sensors and grid monitoring equipment now generate large volumes of information in real time. Cloud platforms allow utilities to process this data more quickly, apply advanced analytics and improve outage detection and response. What was once seen as experimental is increasingly viewed as essential to maintaining system reliability as grid operations become more complex.

Technology companies are positioning themselves to support this transition. Schneider Electric has expanded its One Digital Grid Platform, an artificial intelligence-enabled system that combines cloud computing with on-premises infrastructure. The platform is designed to improve grid visibility and long-term planning while allowing utilities to retain existing control systems, reflecting a broader preference for hybrid models.

Large cloud providers are also increasing their focus on the energy sector. Amazon Web Services has promoted its cloud infrastructure as a foundation for utility modernisation, highlighting scalability, cybersecurity and system recovery rather than offering dedicated grid products. Google Cloud has stepped up partnerships with energy companies, emphasising data analytics and AI tools that can help utilities anticipate grid stress and optimise operations.

Together, these efforts support a gradual shift from reactive grid management towards more predictive approaches. Industry executives say cloud-based systems allow operators to identify potential risks earlier and prepare responses before disruptions escalate.

The move mirrors wider changes in the power sector. Electricity demand is rising as electric vehicles and data centres proliferate, while renewable energy sources add variability that challenges traditional planning models. Cloud-based analytics can help utilities model these dynamics, coordinate across regions and balance supply and demand more effectively.

Concerns remain over cybersecurity, regulatory oversight and reliance on large technology providers. Many utilities are responding by keeping critical control functions on site while moving analytics and planning tools to the cloud.

Even so, cloud computing is increasingly seen as a foundational layer of grid modernisation, pointing to a more flexible and data-driven US power system.