Utilities Explore Quantum Computing to Optimize Energy Grid Operations

What happened

The quantum computing sector saw a dramatic increase in investment and commercial activity during 2025, with worldwide startup funding reaching $12.6 billion-six times the 2024 level. Over 300 companies globally have begun testing quantum applications, and quantum computing companies generated over $1 billion in revenue worldwide in 2025, according to a McKinsey market report. The U.S. Department of Commerce announced $2.013 billion in federal incentives to nine companies in May to accelerate quantum computing development. In the utility sector, EPB in Chattanooga has operated a quantum communications network since 2023 and plans to install a quantum computer with 36 logical qubits later this year. Commonwealth Edison announced it is powering the Illinois Quantum and Microelectronics Park, a 128-acre campus that will house the first utility-scale, error-corrected quantum computer. Middle Tennessee Electric and Duke Energy are also conducting early-stage pilots focused on battery dispatch optimization and power system planning.

Why it matters

Quantum computing could fundamentally change how utilities optimize their operations by enabling exponentially faster solutions to complex problems involving thousands of interconnected variables such as generation, transmission, demand, weather, and customer impacts. For Duke Energy, which serves millions of customers, the ability to optimize these calculations at scale represents significant potential value. Utilities face a critical strategic decision: engage with quantum technology now to build capabilities and influence infrastructure standards, or risk being caught unprepared as they were with AI's impact on electricity demand. EPB plans to use quantum computing to optimize the 150 batteries across its 200,000 meters and 112 substations, improving supply-demand balancing and peak load forecasting. The technology also poses immediate cybersecurity threats-NIST finalized post-quantum cryptographic standards in 2024 because sufficiently powerful quantum computers could break current encryption as soon as 2030. IBM CEO Arvind Krishna projects quantum will have a measurable impact on IBM's top and bottom lines by 2028 or 2029, representing a trillion dollars of value by the end of the 2030s.

Bigger picture

The quantum computing sector is transitioning from research to commercialization across multiple industries. Major companies including Airbus, E.ON, JPMorgan Chase, and Allstate are collaborating with quantum technology providers to develop use cases in medical technologies, pharmaceuticals, financial services, energy, and material sciences. McKinsey estimates quantum computing could create up to $2.7 trillion in economic value during the 2030s. IBM and startup Algorithmiq announced research in late July demonstrating that quantum computers can provide trusted solutions more efficiently, more cheaply, or more accurately than classical computing methods-a key milestone in the field. Researchers at Aalto University demonstrated the first superconducting quantum heat engine, which could eventually support quantum computers with very large numbers of qubits. Finland's Quantum Technology Strategy envisions a quantum computer with one thousand logical qubits by 2035, requiring potentially hundreds of thousands of physical qubits. The Electric Power Research Institute projects that the market tipping point will arrive around 2028-2030 when quantum processing units can process 100 logical qubits-enough to enable optimizing a microgrid or small service territory. The sector currently includes approximately 85 companies competing to become quantum hardware suppliers.

What to watch

Monitor when quantum systems reach the critical 100 logical qubit threshold expected around 2028-2030, which would enable practical utility-scale optimizations. Watch whether utilities successfully implement post-quantum cryptographic standards before quantum computers become powerful enough to break current encryption around 2030. Track which of the competing quantum computing modalities-superconducting, ion trap, photonic, and neutral atom-becomes the market standard, as this will shape infrastructure requirements. Pay attention to whether quantum computing revenue projections materialize, with industry estimates calling for growth from over $1 billion in 2025 to as much as $4.4 billion by 2028. Observe how utilities balance the risk of over-committing too early versus ignoring the technology too long, as they did with AI. Follow EPB's deployment of its 36 logical qubit quantum computer and whether it successfully demonstrates battery dispatch optimization across its service territory. Watch for clarity on quantum computing's electricity demand and load profile, particularly whether it requires the same 24/7 cryogenic cooling and demanding power quality as conventional data centers, or whether its comparatively small processor power use keeps grid impact minimal.