The annual IT spend by utilities companies in western Europe is set to exceed £7bn by 2015, up from £5.6bn in 2011, according to analyst firm IDC.
According to IDC's report, Western Europe, Utilities Industry, IT Spending, 2010-2015 Forecast, IT services represent the largest share of IT spend, at 61.8 per cent (£3.4bn) of the total.
This is followed by packaged software and hardware at 20.6 per cent and 17.7 per cent of total spend respectively.
Electricity firms spend the most on IT, and will continue to do so, according to Roberta Bigliani, head, EMEA, IDC Energy Insights.
"While electricity's IT spending is already the most substantial in 2011, it is not expected to lower its spending any time soon."
Bigliani stated that water companies would spend proportionately less due to their smaller sizes.
"The water sector will have the slowest 2010-2015 growth rate, though this is to be expected as companies in the water subindustry are often smaller, making it more difficult for them to find financial resources to invest in IT."
She added that smart meter rollouts were partly responsible for contined IT investment.
"Utilities' IT investments will continue to be driven by smart metering 2012 rollouts, operational excellence, cost reductions, and the need to comply with energy policies and regulation."
The Department of Energy and Climate Change (DECC) has committed to rolling out smart meters to 26 million households by 2020.