Energy and utilities firms are burning time while peers accelerate into 2026

E&U companies are accelerating their own versions of transformation in the face of global turbulence and disruption. They’re doing so beyond other sectors while zeroing in on operational efficiency such as better asset management, building a critical mass of investment into renewable energy, and ingraining AI into the customer experience. E&U leaders who aren’t moving at speed into the new year will find that their competition will dictate the future. This data point comes in line with our broader research and roundtables on E&U’s efficiency drive, giving digital and emerging tech like AI a new lease of life in a traditionally slow-to-change sector as well as a silver lining for sustainability and the energy transition.

In our recent study in partnership with KPMG, we found that a small but significant subset of organizations is using chaos as the reason for reinvention—disproportionately in the E&U industry (see Exhibit 1). That transformation can take many forms in a sector with globally critical impacts—both extremely negative (climate crisis and conflict) and positive (investments in the transition to cheap and clean energy that can reach the least advantaged). Major oil and gas firms are restructuring, citing AI as the reason for thousands of job losses across the biggest firms, but it’s really a tough market with slower global demand and a lower oil price. Utilities, especially power generators, are pressing ahead, though too slowly, with the build-out of renewable energy. Consumer-facing E&U firms are increasingly looking to AI and digital to boost their customer experience (CX) but are still falling short of a “positive and proactive” one. E&U enterprises face three generational transitions that must be met head-on:

• Oil majors aren’t even talking green anymore, but clean energy investment is booming with or without them: The same oil and gas firms that are restructuring are not making the necessary investments in clean energy that the transition demands. Generation and midstream firms are more advanced, with $2.2 trillion expected to be invested in clean energy this year versus $1.1 trillion in fossil fuels. Integrated transition planning is a must (which we often cover), and we will further outline soon the need to connect short-term pressure, operating models, and long-term strategy across the industrial sector.
• AI is finally useful in E&U because it’s tied to survival, not shiny pilots: An overwhelming focus on efficiency is allowing AI and the technology toolbox to be better aligned to clear goals. This is compared to five years ago when the sector lagged and disconnected tester projects were the norm. Innovation teams are still heavily siloed in E&U and restricted by governance structures, including cybersecurity. At the same time, so much is being achieved in asset management, predictive maintenance, supply chain optimization, health and safety management, environmental reporting, and more directly from AI and advanced analytics in combination with, for instance, the Internet of Things (IOT) technology. The Services-as-Software™ shift in sourcing will also enable the most forward-thinking, outcome-focused enterprises to keep the efficiency button pressed as they map out longer-term transitions.
• Talent still sees E&U as outdated—without skills, the transition fails: The E&U sector is still grappling with a talent pool that largely views it as neither sustainable nor high-tech—another theme of our research and roundtables throughout this year. It must ensure that new skills are embedded in their transition plans and operating models.

The Bottom Line: Your peers are moving at pace. Whether you’re an individual E&U leader, a team, or a whole organization, if you transition at the speed of other sectors on sustainability, AI, and talent, you won’t be a part of the industry’s future.