At-a-Glance:
The world’s energy sector has embarked on a transitional journey to a clean, green, low-carbon future powered by windmills and solar panels. It’s going to be a long trip. According to the International Energy Agency, we still derive an incredible 80% of our primary energy from fossil fuels—with oil contributing 32%, coal 27% and natural gas 23%. To learn more, read “How Green Energy Will Transform the Ranks of the World’s Biggest Electric Generators.” Reading this article may require a subscription from the news outlet.
Key Takeaways:
- Electric industry analyst Hugh Wynne of research shop SSR says carbon dioxide will be regulated in one way or another, via a carbon tax, cap-and-trade or emissions allowances.
- Analysts believe companies with stubbornly high emissions are going to have to pay to pollute — while those with low emissions will enjoy a profitability advantage.
- Wynne found the “dirtiest” utilities are those with coal-fired fleets in China, Russia and India.
- Meanwhile, some of the more progressively minded utility companies are keen to take advantage of new tools evolving out of advances in machine learning and artificial intelligence.
- Forbes Global 2000 companies Southern Company, Exelon, and Dominion Energy are all customers of a startup called Urbint, which was founded by Forbes 30 Under 30 alum Corey Capasso and has raised more than $40 million in funding for its A.I.-driven infrastructure safety platform.
Path to 100% Perspective:
Artificial intelligence (AI) is a very broad field. Forecasts for price and power are generated by AI and represent the expected trajectory or probability distribution of that value. In the end, as a power trader, it is important to remember the historical data is not a picture of the future, but rather a statistical distribution that can be leveraged to inform the most probable outcome of the unknown future. AI is more capable at leveraging statistics than people will ever be. The benefit of using AI is more effective utilization of the existing infrastructure. There is quite a bit of under-utilized infrastructure in the power generation industry. However, with the use of greater intelligence on the edges of the network coupled with great intelligence at the points of central dispatch, under-utilized infrastructure can be maximized for a more reliable power system.