How advanced connectivity can help electrify society

The AI supercycle is changing the way the world’s energy systems operate. AI offers powerful opportunities for industry and society, but its rapid growth is also increasing demand for electricity and computing capacity, adding pressure to energy systems and infrastructure.

This challenge is particularly pronounced in Europe. Renewable electricity generation is growing quickly across the continent, with renewables accounting for nearly half of all EU electricity consumption last year. But electricity only represents approximately 23% of final energy consumption across the European Union today. That means transport, heating, and many industrial processes continue to rely significantly on fossil fuels. The European Commission sees greater electrification as a way to reduce that dependence while improving the efficiency, security and resilience of EU energy systems.

Electrifying society

In practice, electrification means replacing technologies that directly burn fossil fuels with alternatives powered by electricity. Combustion-engine vehicles can be replaced by electric vehicles, for example, while gas boilers can be replaced by electric heat pumps. As renewables account for a greater share of electricity generation, these changes can help shift energy demand away from fossil fuels.

Europe’s electrification push has three interconnected objectives:

• Cleaner: moving demand towards renewable and low-carbon electricity.
• More affordable: addressing energy costs and reducing exposure to volatile fossil fuel markets.
• More efficient: making better use of existing energy and infrastructure while expanding clean capacity.

The European Commission’s Electrification Action Plan, published in July 2026, aims to double the share of electricity to 46% of final EU energy consumption by 2040, to be assessed as part of the post-2030 Energy Union package. But electrifying more of society raises fundamental questions: Do we have enough clean and affordable electricity, are we using it efficiently, and does the grid have the capacity and intelligence to support growing demand?

The challenge is systemic

AI is frequently framed only as part of the problem because of the electricity required by the data centers that support it.  But data centers could potentially become more flexible participants in the wider energy system. For example, some computing activities that are not time-critical may be scheduled for periods of lower grid demand where technical, operational and customer requirements allow, relieving pressure on local energy systems during peak periods. Utilities, meanwhile, need sufficient visibility and control to balance supply and demand while integrating increasingly distributed sources of renewable electricity.

This is an ecosystem challenge. Data centers, utilities, telecom networks, public authorities and communities are increasingly interconnected parts of the energy system. Their ability to exchange data, anticipate changing conditions and coordinate operations will influence how effectively electrification can move ahead.

An emerging European policy landscape

Several European initiatives attempt to address this problem. The Electrification Action Plan sets out measures intended to accelerate the shift from fossil fuels to electricity across industry, transport and buildings. It also highlights the need to modernize electricity grids and make better use of existing infrastructure. The proposed Cloud and AI Development Act seeks to strengthen Europe’s cloud and AI ecosystem, support sustainable data center deployment and increase computing capacity. It sits within the EU’s broader policy agenda for strengthening cloud and AI infrastructure, competitiveness and technological sovereignty, alongside work exploring digitalization and AI in the energy sector.

These initiatives remain at different stages of development, and the final form of legislative proposals may change. Collectively, however, they indicate a more connected relationship between digital infrastructure and the energy system. This is where advanced connectivity can play an important enabling role

Connectivity as digital backbone to enable electrification 

A more responsive energy system depends on data moving securely and reliably between data centers, telecom networks, electricity grids, and infrastructure at the grid edge. Advanced connectivity can provide the digital backbone through which these systems exchange information and coordinate their operations. Data centers need reliable networks to manage and move workloads. Utilities need timely information to understand changing grid conditions and manage distributed energy resources. Telecom operators need to manage network capacity efficiently while supporting the wider digital economy.

Nokia provides network infrastructure across all these environments, supporting grid modernization, data-center networking and more efficient use of telecom capacity.

Nokia’s solutions for power utilities can connect data centers, control centers and grid-edge environments using secure, high-performance infrastructure. Nokia is also expanding its IP routing portfolio for smart-grid modernization, supporting the communications requirements of increasingly digital and distributed electricity networks.

Within data centers, connectivity, visibility and automation can support more responsive operations. Nokia’s Event-Driven Automation platform supports data-center network automation, while its critical connectivity solutions are designed for high-performance data center environments.

Out-of-band management infrastructure can also reduce equipment and resource requirements. Nokia’s PON-based Aurelis out-of-band management solution is designed to reduce the active equipment, power and cabling required for out-of-band management compared with traditional switch-based architectures.  By reducing the number of active switches by 90%, Nokia Aurelis for Data Centers delivers 50% or more power savings compared with conventional approaches, while simplifying operational effort and improving space efficiency.  

Networking equipment must also carry growing volumes of data without requiring a directly proportional increase in energy and physical infrastructure. Compared with Nokia FP4 routing silicon, FP5 routing silicon delivers a 75% reduction in power consumption and more than three times the system capacity. This comparison is specific to Nokia’s FP4 and FP5 routing generations and demonstrates improvements at the routing-silicon and system level.

Telecom networks form another essential part of the ecosystem, connecting people, businesses, data centers and critical infrastructure. AI-enabled network management can help operators optimize how infrastructure and capacity are used. Nokia’s work on an AI-native, end-to-end network architecture shows how AI-driven optimization can help telecom networks adapt energy use more closely to actual traffic patterns.

Electrification requires ecosystem collaboration

Expanding grid capacity will be central to meeting rising demand and ensuring affordability. At the same time, energy, computing and network infrastructure must be used as efficiently as possible, and the transformation needs to be done with decarbonization in mind. 

Progress will require collaboration among utilities, data center operators, telecom providers, technology companies, public authorities and communities. Nokia’s role is to provide connectivity infrastructure that helps these systems interact.  By connecting data centers, telecom networks, utilities and grid infrastructure, advanced networks can help provide the digital foundation for a cleaner, more affordable and more efficient electrification of society.

Nokia looks forward to continuing this ecosystem conversation at Brussels Climate Week, where Subho Mukherjee, Vice President and Global Head of Sustainability will participate in a discussion with many of our key European customers on “Principles of Sustainable AI” on 12 October.