For decades, the electrical grid earned praise by being largely invisible. When it worked well, it went unnoticed. That quiet reliability has faded in recent years, as wildfires in California and deep freezes in Texas exposed vulnerabilities in the system.

By 2025, the grid had moved firmly into public focus, driven by rising concerns over electricity demand, pricing, supply security, and environmental strain. In response, a new wave of technology startups is positioning software as a critical tool for keeping the grid stable and affordable.

Electricity prices in the United States have climbed by about thirteen percent this year, a surge largely linked to the rapid expansion of artificial intelligence. The AI boom has pushed electricity consumption into unexpected territory, from converting supersonic jet engines into power sources for data centres to ambitious efforts aimed at transmitting solar energy from space. Analysts project that data centres alone could nearly triple their electricity usage over the next decade, intensifying public frustration over rising bills and prompting environmental groups to call for a nationwide pause on new developments.

Utilities, long accustomed to operating behind the scenes, now face intense pressure to upgrade ageing infrastructure and build new power plants capable of handling soaring demand. At the same time, uncertainty looms over whether the current AI-driven growth will prove sustainable. This mix of urgency and caution has created an opening for software-focused companies offering faster, more flexible solutions.

Startups such as Gridcare and Yottar argue that the grid already has untapped capacity that can be unlocked with better data and smarter planning. Gridcare aggregates information on transmission and distribution lines, fibre-optic networks, extreme weather patterns, and even local community sentiment to identify suitable sites for new electricity users. The company says it has already uncovered viable locations that had previously been overlooked. Yottar, on the other hand, matches existing grid capacity with the needs of mid-sized energy users, helping them connect more quickly amid the data centre surge.

Another group of startups is turning to software to link together vast numbers of batteries spread across the grid. By coordinating these assets, they can function as “virtual power plants,” supplying electricity when demand peaks. In Texas, Base Power is leasing batteries to homeowners at relatively low cost, providing backup power during outages while allowing the company to aggregate and sell excess capacity back to the grid. In Germany, Terralayr uses software to bundle distributed storage systems that are already installed, without selling batteries directly.

Beyond storage, companies such as Texture, Uplight, and Camus are developing digital platforms to coordinate renewable energy sources, including wind and solar. By intelligently managing these assets, the goal is to reduce downtime and improve their overall contribution to the grid.

Large technology firms are also stepping in. Nvidia has partnered with the Electric Power Research Institute to develop industry-specific AI models aimed at boosting efficiency and resilience. Google, meanwhile, is working with the PJM grid operator to apply artificial intelligence to clear a backlog of requests from new electricity providers seeking to connect to the network.

While these changes will not materialise overnight, industry observers believe the coming year could mark a turning point. Utilities have traditionally been cautious in adopting new technologies, prioritising reliability and wary of the high costs and long lifespans of infrastructure investments. Regulators and consumers often push back when such projects threaten affordability.

Software, however, offers a lower-cost and faster-to-deploy alternative. If it can meet reliability standards, it stands a strong chance of widespread adoption. Ultimately, the grid will still require physical expansion and refurbishment to support data centres and the broader electrification of transport, heating, and industry. Ignoring the role of software in this transformation would be a costly mistake. Digital tools are flexible, scalable, and increasingly essential to powering the modern economy.

Source: Techcrunch