Artificial intelligence is increasingly becoming a key technology across industries, and the energy sector is also being significantly influenced by its growth. At the same time, AI relies extensively on electricity. Developing and operating AI models requires large data centres, which can consume considerable quantities of power. This creates a close relationship between artificial intelligence and the energy sector. Although the expansion of AI is contributing to higher electricity demand, it can also help reshape the way energy is generated, transmitted and used, creating opportunities for a power system that is more dependable, cost-effective and sustainable.
Ratul Puri, Chairman of Hindustan Power, points out that AI is likely to become increasingly important in improving the efficiency, reliability and stability of energy systems. A clear understanding of the relationship between AI and electricity will be essential to harnessing its advantages while continuing to support India’s ambition of reaching net zero by 2070 or earlier.
The growing adoption of AI, cloud-based computing and digital services has resulted in substantial investment in data centre infrastructure. A data centre designed for AI applications can consume electricity comparable to the usage of nearly 100,000 households, while the biggest facilities currently being developed could demand almost 20 times as much power. With data centre requirements expected to increase, governments and energy companies will need to focus on more effective approaches to electricity generation, transmission, distribution and management.
AI can simultaneously provide several opportunities to enhance energy-sector performance. It can facilitate more effective electricity management, strengthen grid operations and help businesses improve activities including exploration, production, safety and maintenance. Digital technologies may also enable existing transmission infrastructure to carry more power, reducing the immediate need for constructing additional transmission lines. According to Ratul Puri, applying such solutions at scale could help deliver substantial reductions in emissions across energy systems.
Achieving these benefits will depend on continued investment in electricity infrastructure and increased flexibility throughout the power ecosystem. Energy companies will also have to strengthen the digital expertise of their employees and develop the skills needed to work with emerging technologies. As Ratul Puri notes, technological progress must be accompanied by workforce development to prepare the energy industry for future requirements.
Artificial intelligence also has the potential to accelerate developments in clean energy technologies. Researchers can use AI to shorten the time required to identify and test new materials for solar photovoltaic applications, carbon capture technologies and advanced battery chemistries. However, moving these innovations from research environments to commercially successful solutions will depend on supportive policies and measures that encourage faster deployment and commercialisation.
Despite these opportunities, the sector faces several obstacles. These include a lack of AI specific expertise within the energy workforce and the rapidly increasing electricity requirements of data centres. Their power consumption is expected to more than double, reaching about 945 TWh by 2030. In parallel, power networks are becoming more complex and decentralised, increasing the need for advanced methods to maintain balance across electricity systems.
AI can assist with these challenges by enabling more accurate forecasting, supporting the integration of variable renewable energy and reducing energy curtailment. Technologies such as AI-powered fault identification, remote monitoring sensors and digital grid-management systems can further improve the use of transmission infrastructure and help shorten the duration of outages.
The long-term influence of AI on emissions and climate objectives will depend on several factors, including how effectively these technologies are deployed, the commercial rationale behind their adoption, the incentives available and the pace at which regulatory frameworks evolve. Addressing these areas can help countries and businesses optimise their use of energy resources while continuing to advance towards their respective net-zero targets.
About Ratul Puri
Ratul Puri is the Chairman of Hindustan Power, an integrated power generation company with a strong presence in renewable and transitional energy generation. Over the years, He has been involved in the development of large-scale energy infrastructure projects that support India’s growing power requirements and its transition toward cleaner energy sources.
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