AI is the industrial engine of our time, and the energy sector is showing us how

In the last few years, Artificial Intelligence (AI) has emerged as the technology for the time, which possesses the power to transform industrial sectors and drive the establishment of new economic endeavours and opportunities.

We are witnessing this transformation first-hand in the energy sector, where AI is being successfully applied across the entire value chain to maximise operational and strategic benefits. For example, in 2023 alone, the Abu Dhabi National Oil Company (ADNOC) reported that the application of AI technology across its operations had generated approximately $500 million in value.

While AI becomes established as the single most impactful economic value driver of this era, this remarkable transformation comes at a cost, which is the colossal amount of electricity required to operate data centres and other digital infrastructure necessary to harness AI.

Google’s emissions surged nearly 50% compared to 2019, for example, according to the company’s 2024 environmental report, marking a notable setback in its goal to achieve net-zero emissions by 2030.

Google’s emissions also increased 13% year-over-year in 2023, according to the report, with the company attributing the emissions spike to an increase in data centre energy consumption and supply chain emissions driven by rapid advancements in and demand for AI.

The report noted that Google’s total data centre electricity consumption grew 17% in 2023. The impact of AI on electricity demand is well documented and is forecast to grow as much as 20% by 2030, with AI data centres alone expected to add approximately 323 terawatt hours of electricity demand in the United States. Expansion of industrial activity as a result of mass digitisation is leading to an increase in greenhouse gas emissions (GHG), and according to global forecasts, emissions from the world’s maritime fleet, for example, increased by 23% between 2012 to 2022, and a further 4.7% between 2020 and 2021. In a viewpoint, titled ‘Creating A Greener Future for the Blue Economy’, published by management consulting firm Arthur D. Little, an emphasis is placed on the urgent need for decarbonisation and circular use of resources in the shipping industry, and the necessity to act against pollution from both plastics and chemicals and threats to biodiversity within coastal areas.

If countermeasures are not put in place, the report suggests, these emissions are projected to rise by an alarming 44% by 2050. The pressing need to reduce emissions requires a significant increase in efficiency and circular use of resources and the adoption of lower-carbon fuels. Mankind is estimated to be using 1.8x the biological resources that the earth generates every year, leading to environmental degradation of the blue economy.

This high environmental cost of industrialisation is being seen across industrial sectors, though energy producers are emerging at the forefront of the balancing act between demand for more energy and the urgent requirement to reduce GHG emissions.

Companies from the Arabian Gulf are leading the charge in this respect, with AI – a main culprit in the sharp rise in electricity consumption – also being employed to help make energy production safer, cheaper,
and cleaner.

From field operations to smarter and quicker corporate decision-making, ADNOC’s implementation of AI helped abate over 1 million tonnes of carbon dioxide (CO2) emissions between 2022 and 2023, the equivalent of removing approximately 200,000 gasoline-powered vehicles from the road. And there are more gains to be had.

AI-centric organisations acknowledge the twin role that can be played by AI in modern society – as both colossal energy consumer but at the same time a central tool for cheaper, greater, and cleaner energy supply. AI is a change engine, capable of fostering a symbiotic, co-dependent, and virtuous circle between the technology itself and the energy sector, which is likely to be the defining formula for continued industrialisation in our modern era.