Energy and utilities in general are some of the most heavily regulated sectors. And with good reason, utilities being an integral component of a country’s infrastructure. Just look at the chaos that ensued recently in Spain and Portugal when there were nationwide power cuts. Energy is evidently the backbone of society.
Utilities providers must meet rigid standards to ensure optimal reliability and that the market is fair. The organizations responsible for developing these regulations are operating in an ever-changing environment that must comply with government laws and guidance.
With the rapid expansion of infrastructure, net-zero targets, and the adoption of new energy sources, regulating and licensing utilities is becoming more and more complex. Regulators need to consistently monitor organizations in order to certify that up-to-date standards are being met and provide certification.
The utilities industry is a sector that operates using some of a community’s oldest technology but must always remain poised for new developments. And as the Internet of Things (IoT) progresses and becomes more integrated with software solutions, it is an exciting time for the sector.
The Power of Technology
There is a whole wave of new technologies that are useful in the regulation and licensing of utilities. And with computer-aided design software, digital tools and a world of possibilities with AI, it is clear that there is real potential to improve efficacy.
With something as large-scale and physical as utilities systems, ensuring the output correlates with regulations can be laborious. This is where the adoption of digital twins has huge potential. Digital twins are virtual replicas of physical assets or systems, and allow utilities organizations to simulate, monitor, and optimize infrastructure in real time.
Through mirroring actual operations, digital twins provide regulators and operators with immediate insight into performance, enabling proactive identification of compliance risks before they escalate. They can model the environmental impact of a proposed pipeline, test maintenance strategies for grid infrastructure, or predict system failures, all in a virtual environment. This not only reduces the need for costly on-site inspections but also ensures that regulatory standards are met continuously, making compliance faster, more transparent, and more data-driven.
Governments and regulators are keen to adopt a solution that will provide more transparency and reliability. For example, in the UK, the Golden Thread has been introduced as part of the Building Safety Act. Each building must have a digital “golden thread” that includes a trackable audit trail concerning safety standards and compliance with safety regulations.
With an evident appetite for digital solutions across industries that notoriously operate purely in the physical world, it is important to understand the different uses and how to optimize application of this ever-expanding digital toolbox.
Unlocking Faster, Safer Licensing
Much of the licensing process involves rigorous on-site visits and a large amount of copy-and-pasting information into applications. By integrating AI into digital twin platforms, utilities can go even further. Automating compliance checks, simulating regulatory scenarios, and for licensing applications with minimal manual input.
AI-enhanced digital twins enable a continuous stream of data that reflects the real-time status of assets and operations. This allows both operators and regulators to identify issues early, model different scenarios, and test how proposed changes will affect compliance.
So, when a utility company plans to expand a power grid or install new water treatment infrastructure, a digital twin can simulate how the changes will affect energy usage, emissions, water quality, or community impact. AI algorithms can then assess whether these outcomes align with current regulations or whether adjustments are needed. This not only shortens the licensing timeline but also reduces the risk of delays due to non-compliance or incomplete applications.
In this way, the combination of digital twins and AI doesn’t just make licensing faster, it makes it smarter, more transparent, and aligned with the long-term goals of safety, and regulatory integrity. Both regulatory bodies, and utilities organizations that embrace these technologies position themselves not just as compliant operators, but as forward-thinking leaders in infrastructure innovation.
The Future of Our Utilities
It is clear that innovative key players are enthusiastic about the potential of new technologies like digital twins, digital threads, and Generative AI. One study predicts that the global market for digital twins in the energy industry will reach $48.2 billion by 2026.
With this in mind it is not a question of if, but when. And being informed as well as prepared is integral to the technology’s success.
Read more about the opportunities machine learning presents to Standards Development Organizations (SDO’s) below.
