2 in 5 energy, utility firms suffer high-impact outages weekly

Energy and utilities organisations are investing in observability, particularly AIOps and mobile monitoring, to create real-time insights into their infrastructure and reduce outage costs and frequency, according to a report from New Relic.

The report, based on insights from 132 technology professionals and developed in association with the 2023 Observability Forecast, highlights the importance of implementing observability. It shows that 66% of respondents say their organisation receives US$1 million or more in total value from their observability investment per year—more than any other industry.

Based on annual spend and annual value received estimates, energy and utilities organisations receive nearly a three-times median annual return on investment (ROI). 

The report also indicates that the energy and utilities sector sees observability as integral to their business, with 50% of IT decision-makers noting that observability helps them establish a technology strategy.

Peter Marelas, New Relic chief architect in the Asia-Pacific region including Japan, said that with some countries in the Asia Pacific region facing unprecedented energy crises, observability platforms are proving to be crucial for energy and utility providers. 

“As uptime and reliability become paramount to avoiding service disruptions, implementing and maturing observability practices offers a clear path forward,” said Marelas. “By gaining greater visibility into their IT infrastructure, energy and utilities providers can achieve faster time to resolution for issues, ensuring the lights stay on and operations run smoothly.” 

New Relic said the combination of observability and AI can support organisations to create a greater understanding of telemetry data and address the challenges associated with ever-expanding data sets. More than half (56%) of respondents from energy and utilities organisations reported having deployed AIOps capabilities, including anomaly detection, incident intelligence, and root cause analysis, with 89% planning to have AIOps deployed by mid-2026. 

Also, the company said AIOps can support energy and utilities organisations by contributing to operational efficiency and enabling faster response times. It helps teams gather actionable insights and supports decision-makers to uncover learnings regarding system performance; improving incident detection and resolution. 

Energy and utilities organisations experienced outages at a higher rate than all other industries, with 40% experiencing high-business-impact outages at least once a week, compared to the average of 32%. 

The median annual downtime for energy/utilities organisations was 37 hours, which is the highest by a considerable margin across all industries and 61% higher than the overall average of 23 hours. 

This downtime significantly impacts the bottom line for energy and utilities providers, with the median annual outage cost sitting at $34.31 million—the highest figure compared to all other industries.

The energy and utilities organisations that achieved full-stack observability saw substantial improvements to mean time to resolution (MTTR), which can support the reduction of outage costs. Some 87% of those with full-stack observability said MTTR improved to some degree since adopting observability, compared to 76% of respondents without full-stack observability. 

Additionally, while the proportion of energy/utilities respondents using a single tool has increased since last year, growing from 2% to 3%, the average number of tools has remained unchanged at six tools year-over-year. 

This indicates that providers are spending significant time and money tool-hopping to better understand the different aspects of their business and to resolve issues that lead to costly outages and poor customer experiences.

Further, energy and utilities providers are prominent targets for cyberattacks, which underscores the importance of performant network, security, and infrastructure monitoring. 

Security monitoring was the most widely deployed capability for energy and utilities organisations at 68%, and by mid-2026, nearly all (99%) respondents expected to have deployed security monitoring. 

Furthermore, the top technology strategy or trend driving the need for observability amongst energy/utilities organisations was an increased focus on security, governance, risk, and compliance (44%).