Businesses are harnessing AI to significantly enhance their energy efficiency and sustainability objectives. By capturing and analysing vast quantities of energy data, AI tools offer organisations invaluable insights into their energy consumption, highlighting areas of wastage and potential improvements. These AI-driven systems have already shown substantial results, reducing energy consumption by an average of 30%. AI tools assist businesses in adhering to sustainability standards across their lease and property portfolios, facilitating the creation of a ‘green scorecard’ to meet environmental sustainability benchmarks. With energy management a top concern for UK businesses, AI’s potential to transform this area is not only beneficial for cost-reduction and sustainability, but it may also be crucial in mitigating business risk.
- AI is driving the energy transition by boosting businesses’ energy efficiency through data analysis.
- AI’s role in energy management extends beyond consumption analysis, enabling the creation of ‘green scorecards’ to assess and comply with environmental standards across properties.
- Real-world examples, like Vistra’s AI initiatives, showcase AI’s potential to improve energy efficiency, resulting in cost savings, carbon abatement, and innovation in the volatile energy market.
AI: A major player in energy management
The mounting pressure of environmental sustainability and the quest for zero carbon goals have made energy management a strategic issue for businesses of all sizes. In the UK, nearly two-thirds of businesses consider energy their top risk, with sustainability and net-zero objectives closely following. To address these challenges, organisations are turning to AI-driven software tools. These tools, capable of capturing and analysing massive amounts of energy data, are proving to be game-changers in the energy sector.
AI technology allows organisations to gain complete visibility of power consumption. By identifying areas of energy wastage, organisations can take action to address them. The AI-driven systems have already led to significant reductions in energy consumption, with an average outcome of 30%. This not only contributes to cost reduction but also aids businesses in meeting their sustainability goals.
AI and the green scorecard
The role of AI doesn’t stop at energy consumption analysis. AI-driven contract intelligence solutions can quickly scan and organise data from leases and other documents, saving time and resources. This facilitates the creation of a ‘green scorecard.’ The scorecard assesses the environmental sustainability standards for each property managed, helping organisations comply with sustainability standards across their lease and property portfolios.
Such AI-enabled energy management systems not only make sustainability more achievable but also contribute to better corporate citizenship. They foster smarter decision-making by offering actionable insights that aid businesses in their journey towards both sustainability and cost-reduction.
AI initiatives: promising results
Real-world applications of these AI initiatives have produced promising results. A notable example is Vistra’s AI transformation. The company collaborated with McKinsey‘s QuantumBlack AI team to deploy a heat rate optimizer (HRO) powered by AI. The HRO used a multilayered neural-network model to optimise the thermal efficiency of the plant. The result was a more than 2% improvement in efficiency, resulting in $4.5 million per year in savings and 340,000 tons of carbon abatement. Following this success, Vistra rolled out the HRO to 67 power-generation units across 26 plants, achieving an average 1% improvement in efficiency and more than $23 million in savings.
Vistra’s AI initiatives have led to abatement of about 1.6 million tons of carbon per year. This is equivalent to offsetting emissions from a 500-megawatt coal plant. Through AI, Vistra aims to capture $250-$300 million in potential EBITDA and achieve two million tons of carbon abatement per year. These initiatives demonstrate the vast potential of AI in the energy sector and its role in driving the next wave of innovation.
Navigating the volatile energy market
Despite the promising advancements, businesses face concerns about the cost of delivering net-zero and the effectiveness of government schemes like the Energy Bills Discount Scheme (EBDS). To navigate this volatile energy market, businesses need proactive energy strategies and a thorough understanding of energy data. AI tools can provide the necessary insights and aid in managing energy risk.
Companies are taking measures such as energy efficiency, on-site generation, and investment in renewable technologies to manage energy risk. AI can enhance these measures by providing precise data analysis. For instance, using AI to optimise yield and reliability in renewables like solar and batteries can lead to further efficiency improvements.
Future of AI in energy management
The future of AI in energy management looks promising. As companies like Vistra have shown, AI has the potential to significantly improve efficiency, reliability, safety, and sustainability. Moreover, AI-driven solutions are not limited to traditional power plants. They can be expanded to other areas such as renewable energy generation and storage.
However, the successful implementation of AI solutions requires continuous improvement culture, talent development, and a strategy to capture value and achieve emissions-reductions goals. As businesses continue to explore the potential of AI in energy management, we can expect to see more innovative solutions that push the boundaries of what is currently achievable.