AIOps could save energy sector millions says New Relic report

A recent report by New Relic has highlighted that outages are costing energy and utilities providers over USD $34 million per year. The State of Observability for Energy and Utilities report, which was developed in association with the 2023 Observability Forecast, offers insights into how organisations within this sector are adopting observability practices and the resulting business value. Based on data from 132 technology professionals, the report supports the integration of observability and AIOps to mitigate outages.

The report illustrates the growing importance of observability for energy and utilities organisations. According to the findings, 66% of respondents indicated that their organisations receive USD $1 million or more in total value from their observability investments each year. This suggests a median annual return on investment (ROI) of nearly three times the amount spent. Additionally, 50% of IT decision-makers in the energy and utilities sector stated that observability aids in establishing a technology strategy.

The issue of outages is a significant concern, especially in countries within the Asia Pacific region which are facing unprecedented energy crises. Peter Marelas, Chief Architect for APJ at New Relic, remarked: "As uptime and reliability become paramount to avoiding service disruptions, implementing and maturing observability practices offers a clear path forward. 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."

The report also showed a notable increase in AI adoption within the industry. More than half (56%) of respondents employed AIOps capabilities such as anomaly detection, incident intelligence, and root cause analysis. A substantial 89% plan to deploy AIOps by mid-2026. The integration of AIOps aids in operational efficiency and faster response times, enabling teams to gather actionable insights and decision-makers to understand system performance better, improving incident detection and resolution.

Outages continue to be a critical issue, with the energy and utilities sector experiencing higher rates than any other industry. A total of 40% of respondents reported high-business-impact outages at least once a week, compared to the average of 32%. The median annual downtime for these organisations stands at 37 hours, which is 61% higher than the overall average of 23 hours. This downtime comes with substantial financial implications, with median annual outage costs reaching USD $34.31 million.

Organisations with full-stack observability have noted significant improvements in mean time to resolution (MTTR), which aids in reducing outage costs. According to the report, 87% of respondents with full-stack observability observed some degree of improvement in MTTR, compared to 76% without full-stack observability. Despite a slight increase in the number of providers using a single tool, the average number of tools remains unchanged at six, indicating ongoing efforts to navigate multiple systems to address issues and improve customer experiences.

The report also highlighted the prominent focus on security among energy and utilities organisations. With the sector being a frequent target of cyberattacks, 68% of respondents have deployed security monitoring capabilities, and almost all (99%) plan to do so by mid-2026. The increased emphasis on security, governance, risk, and compliance was identified as the primary driver for observability adoption by 44% of respondents.

One example of successful implementation is World Kinect, a global leader in the energy industry. Partnering with New Relic has allowed Kinect's engineering team to cut downtime, reduce troubleshooting time by 75%, and resolve issues more swiftly. This partnership underscores the potential benefits of adopting observability practices within the energy and utilities sector.