Artificial Intelligence: a Smart Move for Utilities 2 Think:Act AI in Utilities
navigating complexity March 2018 Artificial intelligence: A smart move for utilities 2 Think:Act AI in utilities CLASSICAL THE BIG SOFTWARE VS. AI 3 P. 7 83% of top European utilities executives consider artificial intelligence a high to medium priority for their business. Page 5 43% believe AI will enable new business models. Page 8 >20% efficiency gains from AI are expected in utilities in the next 1–5 years. Page 13 Think:Act 3 AI in utilities Introduction: With the energy sector undergoing a period of rapid transformation, artificial intelligence offers new solutions to manage the change. The utilities industry is at a crossroads. Its traditional Demand and supply, for example, will be managed au- models, protected by tight regulation and anchored by tonomously by intelligent software that optimizes op- low risks, safe returns, long investment cycles and erations and decision making. To keep up, utilities will above all predictability, are rapidly becoming outdated. have to develop such technologies themselves. This In their place more complex, deregulated models are they can do by either becoming innovators or sticking emerging, driven by real-time prices and smart tech- with the "configurator model" of adapting existing re- nologies, and characterized by decarbonization, decen- sources, a riskier path that could see firms lose their tralization, digitalization and ongoing sector coupling. competitive edge in the mid to long term. Without such Take, for example, the offshore wind sector, where in changes and a focus on data-driven approaches, the just a few years the market has transformed from being new, digital energy system will be difficult to manage.
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