Energy is extremely important – and at the same time, energy is both a major source of CO2 emissions and a major cost for both consumers and businesses.

Bringing down the cost of energy via more efficient production, more efficient distribution, and so on, is thus beneficial for everyone. Bringing down emissions by using lower-emission forms of energy, such as renewable (electric) energy, is in everyone’s interest as well.

AI is already helping us, and its influence will only grow moving forward.

Building a More Flexible, Modern Grid with AI

When it comes to electric energy, the institutions managing the respective power grid have to make sure that enough electricity is available at all times. Due to the fact that renewable energy production can be volatile, this isn’t easy.

Smart AI-using algorithms that incorporate real-time weather data can help predict what the production of renewable energy will look like over time, which means power companies now know when additional sources of electricity, such as gas power plants, have to run. This helps in preventing these power plants from running despite not being used.

Likewise, operators of energy storage assets, such as utility-scale batteries, can use AI to predict the best times to charge their batteries – when the price for electricity is low and there is a surplus – and when to discharge these batteries. This boosts the profitability of these companies and helps stabilize the grid by better balancing supply and demand.

Some companies that deploy AI for these tasks include Alphabet’s (NASDAQ:GOOG) Google DeepMind unit, that is working with grid operators in countries like Great Britain, but also with PJM Interconnection, the leading US grid operator; or utility NextEra Energy (NYSE:NEE), which deploys AI to better predict the power generation of its renewable energy assets over short-term and long-term time frames.  

Benefit from Growing Use of AI in Energy Production

Investors can benefit from the growth of Artificial Intelligence in energy production in different ways. Investors could buy shares of energy companies that utilize Artificial Intelligence, such as NextEra Energy, Dominion Energy (NYSE:D), Shell (NYSE:SHEL), and so on. The business models of these companies mean that AI isn’t at the forefront, but it’s increasingly used, since their results depend upon an increasingly complex number of factors, such as commodity prices.  

Investors can also invest in the companies that power the AI in energy production trend without them being energy companies themselves: These are the tech and semiconductor companies that power the broad AI trend and that benefit from increased AI usage from all kinds of customers. GOOG would be an example of that, as its algorithms are, as mentioned above, used by energy companies and grid operators.

Of course, NVIDIA (NASDAQ:NVDA) is also one of the beneficiaries here: Its Artificial Intelligence chips reign supreme and are needed to train AI algorithms, including the ones predicting renewable power generation, electrical grid demand, and so on. Other semiconductor and data center players, like Arista Networks (NASDAQ:ANET), should benefit from this theme as well.

Investors can also choose among some of our top Artificial Intelligence picks to benefit from increased AI usage in energy production.