Chapter 1
AI increases electricity demand through data centres but can improve grid efficiency, cut emissions, boost innovation, and support net-zero goals.
In almost every industry worldwide, artificial intelligence has become ubiquitous, including the energy sector. However, AI itself needs massive amounts of energy to operate its programmes. The training and deployment of AI models requires large, power-guzzling data centres. Without electricity, AI systems cannot function. Yet, AI could potentially transform the energy industry by facilitating a reliable, affordable and sustainable supply of electricity. Ratul Puri, chairman of Hindustan Power, an integrated power generation company with a strong presence in renewable and transitional energy generation, added that “AI will play an important role in making energy systems more efficient and stable in the coming years.”
Paradoxical Relationship Between Electricity and Data Centres
One must understand this link to leverage the benefits of AI and accelerate the journey towards the net-zero target by 2070 or earlier. To begin with, an AI-centric data centre typically consumes electricity that can run 100,000 homes. However, the largest ones being constructed today will require 20 times this amount. Worldwide, investment in data centres has increased sharply in recent years, driven by the rapid growth of artificial intelligence, cloud computing and digital services. This expansion has raised growing concerns about rising electricity demand and the pressure it places on existing power systems. Data centres are already a significant consumer of global electricity and their share is expected to increase further as AI adoption accelerates across industries. At the same time, this surge in demand is pushing governments and energy companies to rethink how power is generated, distributed and managed in a more efficient and sustainable way.
Despite their power-guzzling nature, AI can revolutionise energy consumption and boost grid performance by enabling more efficient, smarter use of electricity. By 2030, smart grid technology and AI-linked energy efficiency are projected to create almost $1.3 trillion in economic value. Moreover, AI could potentially lower global GHG (greenhouse gas) emissions by 5 to 10%, equal to the EU’s yearly emissions.Ratul Purihighlighted that “digital technologies can support large-scale emission reduction when applied across energy systems.”
In this scenario, focusing solely on oosting electricity generation will not work. To deliver the requisite energy that AI needs, policymakers should also consider the infrastructure, which will call for more grid investments, while making the overall electricity ecosystem more efficient and flexible.
Again, it is AI that could help transform the energy industry by helping companies optimise exploration, production, safety and maintenance models. By using AI tools judiciously, a huge quantum of electricity transmission capacity can be freed without erecting even one new line. Given the current shortfalls in the industry, a vibrant partnership between public and private players is necessary to achieve this goal. Apart from infrastructure, this includes the objective of building proper digital skills among energy workers.Ratul Purifurther added that “technology and skilled manpower must grow together for the energy sector to become future ready.”
Additionally, innovations are needed in the energy industry to surmount current challenges and come up with novel solutions. Here again, AI can assist in driving accelerated innovations in this space. Interestingly, challenges in energy innovation are precisely the type of problems that AI is adept at solving. For instance, barely 0.01% of next-gen solar PV materials have been produced experimentally. Therefore, an immense set of potential materials is yet to be explored. Using AI, scientists could drastically fast-forward the process of discovering and testing prospective materials, carbon capture molecules and battery chemistry. Of course, proper policies are essential to back AI-driven inventions and accelerate commercialisation, which is usually a bigger hurdle for new products rather than the discovery stage.
Surmounting Barriers to Meet Net-Zero Goals
Since energy is one of the most critical and complex segments worldwide, AI must be leveraged fully to capitalise on its tremendous potential and benefits. Widespread AI adoption will require overcoming hurdles such as a lack of adequately skilled workers. Compared to other sectors, the low prevalence of AI-related skills hinders the energy industry. Meanwhile, a decline in computation costs, along with a rise in technical breakthroughs and data availability, is enhancing the capabilities of AI. Simultaneously, electricity consumption in data centres is poised to rise more than 2X, reaching approximately 945 TWh by 2030. This is somewhat higher than Japan’s current overall electricity consumption.
In the interim, electricity grids are under severe pressure in multiple regions. If such issues are unresolved, about one-fifth of the proposed data centre projects would be delayed. As electricity grids grow more complex, digitalised and decentralised, AI can play a pivotal role in balancing these networks. AI can also boost forecasting and integration of variable renewable energy generation while lowering curtailment and emissions. With AI-based fault detection, companies could swiftly and precisely pinpoint grid faults, ensuring 30-50% lower outage durations. AI-based management and remote sensors could enhance transmission line capacities. If these tools are utilised, almost 175 GW of transmission capacity can be unlocked without a single new line being built.
The overall impact of AI on emissions and climate change will be contingent on how AI applications are launched, their relevant business cases and the incentives available, as well as how swiftly regulatory frameworks keep up with the fast-changing AI landscape. In a nutshell, companies and countries that manage these challenges seamlessly will be better placed to optimise their energy resources and move forward steadily towards net-zero targets and timelines.
About Ratul Puri:-
Ratul Puri is the Chairman of Hindustan Power, an integrated power generation company with a strong presence in renewable and transitional energy. Over the years, he has been involved in the development of large-scale energy infrastructure projects that support India’s growing power requirements and its transition toward cleaner energy sources.
About Hindustan Power:-
Hindustan Power is an integrated power generation company focused on renewable and transitional energy. The company has been actively contributing to India’s energy transformation through the development of solar power and other energy infrastructure projects.
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https://open.substack.com/pub/ratulpuri/p/ratul-puri-highlights-how-ai-can?r=475b82&utm_campaign=post-expanded-share&utm_medium=web
