AI + energy: the monster child of Origin and Facebook? Or a smart, decentralised grid?

Luis Gonzalez, Chief Data and AI Officer at Aboitiz Power, believes AI will become the financial engine of decarbonisation.

TL;DR
• AI's growing role in the grid may democratise clean energy or shift power from utilities to tech platforms.
• Luis Gonzalez believes AI will become the financial engine of decarbonisation.
• The data industry will lead the energy transition, changing the paradigm of bankability of projects.

Summary
The energy sector is on the cusp of a significant transformation, driven by the convergence of data and artificial intelligence (AI). Luis F. Gonzalez, Chief Data and AI Officer at Aboitiz Power, believes that the data industry will lead the energy transition, championing a shift towards a more decentralized and intelligent grid. Here are key insights into this emerging landscape:

The data industry's growing demand for electricity will reshape the energy sector, with AI changing the economics of power generation and distribution. AI can unlock capital for renewables, enabling the financing of power plants based on the sale of computation, rather than just electricity. A decentralized data layer above the grid could empower consumers, enabling them to manage their energy usage and bills more effectively. The integration of AI and energy markets raises regulatory challenges, with Gonzalez calling for government-owned regulatory sandboxes and adaptive legislation.

The intersection of data and energy is giving rise to innovative business models and technologies. Gonzalez envisions a future with 'small language models' that are highly regionalized, allowing for more distributed computation and energy management. This shift could democratize clean energy, but also raises concerns about monopolization and the need for regulatory frameworks that balance innovation with consumer protection.

As the energy sector continues to evolve, the role of AI and data will become increasingly important. Key considerations include ensuring that the benefits of this transformation are equitably distributed, and that the grid remains resilient and secure. The path forward will require collaboration between industry leaders, policymakers, and regulators to create a more intelligent, decentralized energy system.

The implications of this transformation extend beyond the energy sector, with potential impacts on the broader economy and society. As Gonzalez notes, 'the data industry will lead the energy transition in a way that the power industry on its own cannot.' The future of clean energy may ultimately be shaped by whoever controls the data layer sitting above the grid, highlighting the need for careful consideration of the complex relationships between data, energy, and society.

The question for policymakers and consumer advocates is whether AI's growing role in the grid will democratise clean energy, or simply shift power from utilities to tech platforms.