With electrification of homes and transportation, onshoring of domestic manufacturing, and growing digital infrastructure, electricity demand is growing at a much faster pace than originally expected. It is clear that the problem statement facing the energy and climate industry is this: how can we increase energy usage without adding more — and simultaneously reducing – emission across the globe? At CERAWeek, I was able to understand some of the challenges and opportunities that come with solving this problem.
Some of my key insights are as follows:
To meet the growing energy demand in the short-term, renewables are a cheap solution unless you have a gas turbine and permits!
The buzzword at CERAWeek was ‘all-of-the-above’: companies want natural gas, wind, solar, nuclear, geothermal, etc. However, cost of natural gas has gone up because of (1) increased demand of gas turbines, (2) shortage of labor, which is required for competing uses: data centers, chemical companies, LNG terminals and electrification, and (3) difficulty in obtaining state and federal permits. Natural gas plants can only come online starting 2030 or later; new nuclear will also not be available anytime soon. Renewables are ready to go now! In the long-term, dispatchable clean power will be added to the domestic energy mix.
Flexibility and how we utilize the grid is critical to accommodate the additional demand.
I learned that there is a lot of availability on the grid at different points of time (except during peak hours), and so, the industry will not fully rely on supply-side solutions. Demand-side solutions offer immense potential: for example, NRG Energy deploys AI-enabled smart thermostats that allow and compensate for residents’ automatic reductions in air-conditioning loads during summer peaks, ensuring increased grid reliability and customer savings.
I was amazed by how much of a role AI can play a huge role in modernizing the grid and accelerating the energy transition.
I see the interconnection queue backlog in the U.S. as one of the most significant barriers to fast deployment of renewables: more than 2 TW of new generation is stuck in the queue, and processing times can take up to 5 to 7 years because of the complexity of the many studies among other reasons. AI has the potential to accelerate that process by expediting the studies and helping review other documentation. AI can also help with predictive maintenance, demand forecasting, load and supply matching, and so much more. However, data is a problem across utilities: they need to build the data to feed to. Outside this, AI can help with material innovations, detecting methane leaks, and so much more!
The most significant barriers facing emerging economies facing achieve energy independence are the 3Cs (corruption, cost of capital, and colonialism)
- Corruption: Not everybody wants people to get affordable and reliable access to energy. With access to energy, you get education, better healthcare, access to a home with air conditioning and with that, you feel more empowered, and you want to have a voice in your future and vote; not everybody necessarily wants that.
- Cost of capital: There is a widespread perception that emerging economies are risky places to invest so the cost of capital is very high.
- Colonialism: The rich world advocates for global access to affordable energy and economic growth, but their own prosperity depends on the low-cost labor and resource extraction from non-OECD countries. The industries supplying the developed world with goods often operate under exploitative conditions—whether it’s high emissions, child labor, or forced mining—and so achieving energy independence for emerging economies would be to shift away from this model.
India’s energy future is about energy addition and not energy transition
Coal supplies more than 75 per cent of India’s electricity, and India’s energy demand is set to double by 2045. India, thus, would not be able to replace coal but can certainly displace it: it should meet its additional demand from renewables and strive to reduce coal’s share in the energy mix to 50% in the coming years. The driver for India’s need for affordable and clean energy is not necessarily climate change but domestic air pollution.
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A running thread across what I learned at CERAWeek was industry’s strong demand for political certainty. Without predictable regulations, the energy transition — or move to more affordable, clean and reliable energy – will considerably slow down. I learnt about various new technologies at the Innovation Agora such as compressed air energy storage, teal hydrogen, Modular Conversion Technology, and more!
This experience has changed the way I will approach the energy and climate challenge. I have gained a deeper appreciation about the economic and social upsides of AI in the energy industry as well as the need for innovative partnerships among different energy players with different motivations to solve the common goal: more energy, less emissions.
Additionally, as part of the NextGen cohort, I attended sessions by industry experts who shared career advice and met students from Dartmouth, ETH Zurich, Wharton and learn about the disciplines they are studying to approach the space. As I prepare to graduate, I am excited to translate these insights and considerations into my professional life in the energy and climate space!