AI and Energy: Partners for a sustainable future.
At the intersection of three megatrends – rising global energy demand, the shift towards net-zero emissions, and rapid AI development – there is a unique chance to reshape the future of energy. With the right investment in clean energy, smart policies, and AI innovation, we can create a more sustainable, efficient, and equitable energy system for all.
This paper from ADNOC, Masdar and Microsoft outlines seven key areas for collaboration between the energy and technology sectors to accelerate the transition to a net-zero energy system. By harnessing AI’s capabilities, from methane reduction to grid resilience, these industries can address growing energy demands and drive an inclusive transformation.
Rising AI demand for electricity is putting pressure on some regional power grids
The electricity demand of datacenters is expected to grow, bringing datacenter demand to 2.6% of global electricity consumption by 2026. While AI is expected to remain a small portion of global electricity for the decade ahead, this growth can put pressure on local grids. Enhancing grid capacity and increasing access to carbon-free energy will be critical in this transition.
Increased collaboration between the energy and technology sectors can transform the energy system and unlock the full potential of AI.
A total of 94% of leaders agree on the need for greater collaboration between energy, AI and climate. Collaboration between the energy and technology sectors could include commercial partnerships for co-investing in carbon-free energy projects, joint ventures – like Microsoft’s investment in G42 – to combine expertise, and sectoral initiatives that promote best practices, such as the First Movers Coalition and the Oil and Gas Decarbonization Charter.
Private investment in AI for energy has declined by over 30% in the last three years. Energy investment needs to be focused in four key areas: reducing methane emissions, utilizing carbon capture and storage, building a resilient grid and tripling the availability of renewable energy.
Today, AI is already being piloted to support the expansion of transmission networks and the integration of renewable energy, but greater deployment is required. By 2040, electricity grids require the addition or refurbishment of 80 million kilometres of networks to cater to rising demand and diversified power supply.
Approximately 78% of leaders consider talent and training a challenge to adopting AI. Technology companies can deliver AI solutions if they have a better understanding of energy systems, while energy companies have a responsibility to upskill a wide range of personnel for successful AI implementation across the entire value chain.
By 2050, approximately 80% of electricity demand growth will come from developing countries. Emerging markets and developing countries (EMDC) are vital for green energy supply and need tailored AI solutions. With nearly 85% of data centers outside of EMDCs (excluding China) and projected growth favoring developed economies, diversifying data center development is crucial for sustainability.
A unified framework is critical to AI for efficient data flow across the energy system and its stakeholders. Regulations improve comprehensive analysis and seamless data exchange – facilitating decision making – while protocols focus on protecting proprietary data.
Thoughtful standards and policy frameworks that govern the use of AI in the energy sector are important to ensure its safe, secure and responsible use. Collaboration among companies, researchers, scientists, and policymakers would open a path to a regulatory sandbox that collectively addresses sustainability challenges, and funds interdisciplinary projects that combines AI expertise with policy and social justice.
Innovation is driving solutions
Explore AI and Energy for a sustainable future
We invite you to view our full report on the AI-energy nexus prepared in collaboration with ADNOC, Masdar and Microsoft.
