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AI’s role in the energy transition took center stage at the opening session of Adipec yesterday. Adnoc Group CEO and Industry and Advanced Technology minister Sultan al Jaber called for “integrating renewable energy, nuclear energy, and gas in the most cost-and carbon-efficient way” to meet the surge in energy demand created by the “exponential growth of AI,” during his opening speech at the forum (watch, runtime: 2:56:25).
Al Jaber calls for more energy investments-
The UAE plans to invest over AED 200 bn in sustainable energy over the next six years, commiting to meeting future energy demand, Wam cites Energy and Infrastructure minister Suhail Al Mazrouei as saying at Adipec. Al Mazrouei noted that the country already has “significant investments in clean energy projects in operation and others under development.”
Investments in the power sector need to grow to at least USD 1.5 tn to meet the surging demand from AI, Al Jaber said during his opening speech, citing takeaways from a Majlis meeting held the day before the conference. The majlis also stressed the importance of enabling regulatory frameworks to accelerate and protect investments in the energy sector and the need to leverage AI to optimize energy resources and predict fluctuations in demand.
Al Jaber urged for energy markets to “shift and grow” to accommodate the surge in energy demand driven by AI’s growth, alongside the projected population growth, which is expected to grow by 1.7 bn by 2050. With growing urbanization, electricity demand is anticipated to double, Al Jaber noted, highlighting the opportunity that AI presents for the transformation of energy systems and potentially “supercharging” low-carbon growth. Wind and solar are expected to grow 7x, LNG could expand by at least 65%, and oil will continue to be used for fuel for the foreseeable future, Al Jaber said.
Integration and balance are key: “We need a model that will integrate all forms of energy together. We will need more renewable energy and we need to advance battery storage technology to turn renewables from intermittent power to base load. We need gas as a bridge and we will need, in some locations, nuclear power,” Al Jaber told the Financial Times.
Adnoc’s USD 23 bn investment in decarbonization tech positions Adnoc to meet its carbon targets ahead of schedule, the Financial Times quoted Al Jaber as saying.
REMEMBER- The UAE is on track to achieve its goal to triple the contribution of renewables to its energy mix to 32% by the end of the decade, with production capacity having reached 6 GW, nearly half of its target of 14.2 GW. With the launch of the fourth reactor at the Barakah Nuclear Energy Plant, the facility entered full operations, generating 5.6 GW of nuclear energy.
Regardless of demand, securing oil and gas investments is paramount: While global demand could potentially settle, the world still needs to pour more investments into oil and gas to maintain supply levels, Reuters cites British energy giant BP CEO Murray Auchincloss as saying.
Although still a nascent sector, AI tech also requires significant investments to boost its energy efficiency, AI and Digital Economy Minister Omar Al Olama told Sky News Arabia (watch, runtime: 4:58). In turn, with the rising adoption of AI systems, the industry’s energy consumption is projected to decline in the short to medium term, leading to lower energy demand.
New AI investments in the energy sector-
Adnoc launched its first autonomous AI solution, dubbed EnergyAI, in collaboration with state-owned AI firm G42, Microsoft, and Adnoc-Presight-G42 JV AIQ, Al Jaber revealed at Adipec. Designed to act autonomously, the AI agent will “speed up seismic surveys from months to days,” and “increase the accuracy of production forecasts by up to 90%,” he added.
AI agents? AI agents are advanced systems currently developed by various tech companies, including Microsoft. These advanced models can carry out tasks current AI models are incapable of without human supervision, with some agentic AI models currently able to handle employee onboarding and supply chain management, according to Bloomberg.
The UAE is set to unveil more AI-focused projects, according to Al Mazrouei, who noted that the government aims to secure enough investments to support AI integration into the energy grid.
Oil + gas are here to stay-
Despite the growing share of renewables in the energy mix, oil and gas are here to stay: Given the global market disruptions and instability due to geopolitical crises and economic fluctuations, “ensuring a balance between supply and demand is crucial for the stability of the energy market,” said Sharif Al Olama, undersecretary for energy and petroleum affairs at the energy ministry.
Yes, but: Market stability hinges on price “stability and predictability,” India’s oil minister Hardeep Singh Puri told Reuters on the sidelines of Adipec, calling for discussions between producing and consuming countries to set a “realistic price.” Puri predicted that the market will evolve over the next five years, driven by the adoption of green hydrogen and the shift to clean energy.
Throwing a wrench in the works? Opec’s supply cuts: CEO of Italian energy firm Eni, Claudio Descalzi, anticipates energy markets’ high volatility to extend into next year as a result of Opec+ production cuts, which have “increased volatility in energy markets and hampered investment in new production,” Descalzi said yesterday.
ICYMI- This week Opec+ pushed back its planned 180k bpd output hike for December for another month amid persistent concerns of soft oil demand from China and a glut in supply. Following the oil cartel’s decision, oil prices rose almost 3%.
