Generative AI can actually detect anomalies across the power grid and suggest optimal load distribution. This really leads to a much more efficient mix and more reliable supply.
-Kevin L. Jackson
Episode Summary
The energy industry is increasingly leveraging AI to analyze data from drones and sensors to predict future energy failures, reduce downtime and maintenance costs, and even optimize energy production by accurately predicting energy demand. A recent report by McKinsey estimated that AI could potentially enable the energy sector to realize up to $1.3 trillion annually by 2035.
In this episode of Supply Chain Now, sponsored by Microsoft, hosts Scott Luton and Kevin L. Jackson explore the transformative impact of AI on the energy sector. Discover how AI-driven innovations are enhancing operational efficiency, predicting failures, optimizing energy production, and driving sustainability goals. Learn from industry leaders like Georgia Power and Constellation Energy on their AI journey towards improved operations, safety, and achieving net zero commitments. Tune in for an insightful discussion on the future of energy.
Episode Transcript
Intro/Outro (00:03):
Welcome to Supply Chain. Now the voice of global supply chain supply chain now focuses on the best in the business for our worldwide audience, the people, the technologies, the best practices, and today’s critical issues, the challenges and opportunities. Stay tuned to hear from Those Making Global Business happen right here on supply chain now.
Scott Luton (00:31):
Hey, good morning, good afternoon, good evening, wherever you may be, Scott Luton and the one and only Kevin L. Jackson with you here on Supply Chain. Now, welcome to today’s show, Kevin. How you doing today?
Kevin L. Jackson (00:42):
Hey, man, it’s a great spring day, I think, although it’s getting in the nineties, so maybe it’s already summer.
Scott Luton (00:49):
Oh man. Well, it’s gorgeous here in metro Atlanta today, and yes, summer weather is just around the corner. And you know what that means? That puts so much pressure on our energy infrastructure as we all crank up the ac.
Kevin L. Jackson (01:03):
Yes, absolutely. Yeah. Talk about timing. You ready to crank up that ac? We’ve got to talk about energy. How do we protect that
Scott Luton (01:11):
Critical part of our infrastructure? We’re going to be diving into the energy industry rather, and how it’s transforming thanks to technology such as artificial intelligence, and much, much more. So stay tuned for an informative, enlightening, and entertaining conversation. Kevin should be going, huh?
Kevin L. Jackson (01:28):
Oh yeah. Artificial intelligence is all the rage. Everybody’s talking about it. It’s jumping into all aspects of our lives, but we don’t really think about it when it comes to energy and it’s important part energy, present and future.
Scott Luton (01:45):
That’s right. It’s a readily part of our everyday life, as I heard you say the other day.
Kevin L. Jackson (01:50):
Yes,
Scott Luton (01:51):
Sometimes we’re not aware of just how much it is powering our everyday life. So stay tuned for a great episode. Today’s episode, in fact, is presented in partnership with our friends at Microsoft who is doing some pretty cool things in industry, helping to move us all forward successfully. More on that a bit later. Okay, Kevin, before we get into our energy focused, our transformation focused episode here today, I got a little fun warmup question. So a handful of our viewers out there may not know that you spent some time at NASA on some really cool missions at an earlier point in your career. Now you know that I love to nerd out on all things space related whenever we get together. And I’ve got a question for you. So Amanda and I watched a brilliant documentary on HBO Max of the day focused on the space shuttle Columbia, the final flight, and we all knew what took place about 18 or so years ago with the space shuttle Columbia. But on a much lighter note, the space shuttle program was fascinating and captivated so many minds and imaginations really around the globe. So I want to use that and folks check out that documentary. Fascinating. I want to use that to ask you, Kevin, what’s one of favorite more recent space related movies or TV shows or what have you?
Kevin L. Jackson (03:04):
Well, it’s recent for me. That’s not mean. They’ve been on off for a long time, but I just started looking at a show called Another Light, and it has sort of a different spin where the aliens are already on earth and no, they’re not invading. They’re came in peace as they always say. So the stupid earthlings sending a faster than light spacecraft to go to the Aliens Planet LA used to ask the Hitch a ride, but it’s been pretty interesting some of the ins and outs of this show. I’m just about halfway through the first season.
Scott Luton (03:43):
Well, I’m so glad you mentioned it. I watched the first season a couple years ago. It’s really fascinating. It’ll make you really think about technology, next generation technology as it applies to all things space. And if I’m not mistaken, I think the second season has come out, but I think I watched that with very fractured attention span. I think I was working on some stuff as the episode, so I’m going to have to dive back into that. But folks, check out the Space shuttle Columbia, the final flight on HBO Max and check out afterlife, which I believe is on Netflix. Is that right, Kevin?
Kevin L. Jackson (04:11):
Yeah, another light on Netflix. Yes.
Scott Luton (04:14):
Awesome. Okay, and great segue here, because the energy industry, including the next generation energy industry, is what’s going to power human exploits across space. We’re really in a fascinating time of our space program, so we’ll have to do some more shows on that. But today, energy industry, especially from digital transformation standpoint. So Kevin, I thought we do this. I want to share a few factoids related to the energy industry that folks may find interesting. It may in fact surprise. So let’s start there. So let’s see here.
Kevin L. Jackson (04:44):
Yeah, you have all your numbers, don’t you? I
Scott Luton (04:46):
Always have all the numbers. Kevin, I am data driven, right? As many supply chains out there are. Alright, so the first up, first here, according to the International Energy Agency, the IEA, we love our acronyms. Renewable energy will make up about 35% of global power generation by 2025. Now, when it comes to renewable energy categories, according to the Energy Institute hydropower, that’s right, hydropower provides about half of all renewable energy worldwide, at least as of 2022. That might surprise some folks. Now in the US, renewable sources produced about 22% of electrical power generation in 2023. In fact, renewables check this out, renewables surpassed nuclear sources in power generation for the first time in 2021. Now, there’s some really cool things going on to reinvigorate the nuclear power industry. So don’t sleep on nuclear power just yet. But also, renewables surpassed coal sources in power generation for the first time ever in 2022.
(05:46):
Now in particular, solar power that’s going to reach 7% of all electricity generated in the US in 2025, up from 4% in 2023. So big gains in solar. Now, one last note, Kevin, especially when it comes to solar, not only is China the biggest user and builder of solar energy infrastructure, but that country is also far and away the world’s largest supplier of solar power components supplying about 80% of the market well positioned. I would say, Kevin, respond to any of those fact toys. What might surprise you the most or doesn’t surprise you the most? Your thoughts before we move on? Well, the
Kevin L. Jackson (06:22):
Thing that sort of jumps out at me, and I’m not doing any China basing today, but China actually is, along with India, are world’s leading consumers of coal, right? The economy is really building fast and cold, the dirty energy being consumed. But this is a great contrast to the fact that they are the world’s leader in providing these renewable technology. So it’s good. I mean, I guess they’re trying to work about that’s right, but they’re transitioning to renewables as well.
Scott Luton (06:57):
Massive shifts, massive shifts, surely in China and elsewhere when it comes to the energy industry. So speaking of shifts, I want to shift gears over to how the energy industry is indeed transforming in real powerful ways. Kevin, I’m going to pose some questions to you. Yes, you, Mr. Digital Transformer, especially focused on AI and the energy sector, right? That intersection. So here’s for starters, Kevin, from your perspective and expertise, how will artificial intelligence help increase operational profitability and productivity by securely connecting and maximizing existing assets out there across the energy infrastructure to help those companies operate in the now and the future? Kevin?
Kevin L. Jackson (07:38):
No, I just want to check before I go. Is this a test?
Scott Luton (07:42):
Yes, A quiz will come later,
Kevin L. Jackson (07:46):
But you know, ai, artificial intelligence algorithms analyze data from the sensors and equipment to predict future failures before they occur. This really reduces downtime and maintenance costs, which extends the lifespan of these assets. They also enable processes known as continuous monitoring of asset health by using AI to ensure optimal performance and early detection of these issues to prevent costly repairs or unplanned outages of your air conditioning over the summer. So you want to make sure this actually optimizes energy production because the AI model can accurately predict energy demand, allowing companies to adjust production and distribution in real time, or this minimizes any waste of the energy and local to you. Georgia Power is really leading the industry in doing these. They use artificial intelligence to enhance many, many aspects of their operations and customer service. The company is focusing on integrating AI technologies to improve grid management, to optimize energy distribution, and to enhance their predictive maintenance. This allows Georgia power to anticipate and address issues before they impact customers leading to more reliable service and efficient operations. So your air conditioning is safe there.
Scott Luton (09:29):
That’s good because the heat is no joke down here in Georgia. Kevin, I love those examples and I got a couple others I want to share as well. Along these lines, constellation Energy, big player out in the industry has implemented AI in a variety of ways across the organization, including at its energy generation facilities where kind of what you’re touching on, where it uses AI to be able to better predict failures as well as optimize its scheduled maintenance, right? And goodness knows, Godspeed, all those incredible maintenance pros out there across global supply chain, including energy, energy industry that keep us all moving forward. One of the quick example, Kevin, the Ontario Power Generation organization, they’re leveraging AI and machine learning to better understand the wealth of data it pulls in every single day from a wide variety of sources, all to better make sense of energy, demand patterns, be able to analyze it in ways that probably only technology can analyze in terms of the sheer wealth of data, and that enables them to plan and manage the grid more effectively and efficiently from ACS to all other uses of power out there. Alright, if y’all can’t tell, by the way, quick aside if y’all can’t tell, Kevin and I both were born in the American South where it gets really hot. So the AC is really important, as we all know, as part of life. So Kevin, great examples there. Great starting point. Got a few other questions for you here. I want to move along to gen ai, right? Generative ai. How is that helping to accelerate the energy transition and the transformation of the industry we’re talking about, Kevin?
Kevin L. Jackson (10:57):
Well, it does a lot more than just creating cool pictures. Generative AI can actually detect anomalies across the power grid and suggest optimal load distribution. This really leads to a much more efficient mix and more reliable supply. It facilitates the integration of renewable sources like wind and solar by forecasting production and balancing it with demand and reliant on fossil fuels. By preventing these unexpected breakdowns and optimizing maintenance, the companies can reduce, once again their operational costs. And you brought up Constellation Energy. They actually use AI to optimize the nuclear reactor operations. They have implemented machine learning tools to improve operational efficiency and prevent costly issue that the nuclear plants, that’s a good thing. That includes AI to predict sensor malfunctions, optimize fuel usage, and to enhance overall plant reliability. This saves millions, I mean millions in operational costs. It’s about that all of the above strategy when it comes to energy. We got to use all the tools we had
Scott Luton (12:28):
So true. And in fact, speaking of the nuclear energy industry, not too long ago, I think you and I covered it on one of our live streams, Kevin, the US and a group of other countries have committed to investing tons of money and elbow grease into the next generation of energy that’s produced by the nuclear industry. So stay tuned on that. I think there’s big developments and innovative developments to safe, powerful nuclear energy that will help with the drive to greener and less reliance on fossil fuels. So stay tuned on that. Good stuff there, Kevin. Man, this is one of our favorite topics to talk about, right? Because universal, of course, it’s in an energy industry, but it’s everywhere else. It’s, we’ll talk about the human factor. So Kevin, how will artificial intelligence help to reinvent the energy industry by building an inclusive and collaborative culture that attracts, engages and retains employees? Your thoughts?
Kevin L. Jackson (13:21):
You know me, when it comes to humans we can’t get rid of, we got to work with them. But all joking aside, artificial intelligence can work with humans to provide and enhance personalized energy saving recommendations. And this actually enhances communications between the users of the energy and the providers and managers of this energy. This promotes sustainable behavior by those humans and by analyzing consumption patterns, AI can suggest participation in those demand response programs where consumers can adjust their usage during peak hours in exchange for incentives like cold, hard cash, and all the humans like cash, including me and you mentioned Ontario Power Generation. They have an AI tool to enhance their employee productivity and safety. They’ve partnered with Microsoft to create what’s known as chat OPG. It’s an AI powered assistant that helps employees access information and perform their own tasks in a more efficient manner. The tool supports operational efficiency by improving and safety among the workers. So AI is on both sides of the coin.
Scott Luton (14:59):
Yes, I love that, Kevin. I love how you touched not only helping the human factor be more productive and probably more easily be more productive, and that usually creates other time in the day for the human factor to focus on more creative and fulfilling aspects of the job. So I love that. And then of course, one of my favorite reinvigorated trends over the last couple of years, especially during the pandemic, is the safety of our workforce. And I love what you touched on there. In fact, I was reading about how Georgia Power also has been using AI and data analytics to drive proactive measures to enhance their team member safety. That’s so important. Okay, Kevin, quick follow
Kevin L. Jackson (15:36):
Up.
Scott Luton (15:36):
Yeah, related to the workforce and talent there, I was at an industry event recent weeks that featured tons of senior supply chain leaders include a couple of chief supply chain officers, especially out in the food industry. And a big theme in many of those conversations. One of the biggest themes I took away was focus squarely on digital talent and those digital skill sets because it’s critical. We’ve talked about for years on end, it feels like we’ve talked about the talent gap in many industries, especially global supply chain for a long time. However, to narrow that focus more on hiring and developing digital talent, not only bringing new digital talent into organizations, but investing in developing the digital skill sets of our current workforce and upskilling them with new digital knowhow. That’s absolutely critical moving forward, right Kevin?
Kevin L. Jackson (16:24):
The thing I always say is, change is constant, and if you’re not changing today, you’re going to be behind tomorrow. And that goes with every aspect of our lives. So personalized education and training program or critical to upskilling staff and keeping them relevant to these changes and requirements and technology and everything that goes on in our lives. The tech technology is also very useful when it comes to blending and enhancing the curricula of regional universities and colleges and even high schools, right? This improves local job opportunities and the economic resilience of your community. When you think about it, this technology is not only improving and making our power more efficient, more reliable, but it’s also enhancing our everyday lives. This is good. It’s that win-win win that we’re all looking for.
Scott Luton (17:27):
I would add another element to your win-win win equation for folks that really volunteer and are willing to learn new things. All of this technology revolution we’re end is going to offer new jobs, new promotions, new advances, big new ideas and study after study will share. I know there’s a lot of concern out there, but study after study shares is going to create far jobs than it replaces out in the industry. So folks, there’s a lot of good news here. Okay, speaking of good news, Kevin, let’s touch on the sustainability imperative that has been taking shape for years, of course, and how AI is helping energy companies make bigger strides when it comes to achieving net zero commitments through things like emissions reductions, grid decarbonization, and renewable energy optimization. Kevin, your thoughts?
Kevin L. Jackson (18:15):
Well, sustainability comes in many forms and Pacific Gas and Electric, for instance, is using generative AI to enhance many aspects of their wildfire detection and prevention. You got to protect the trees that provide the oxygen for us to live,
Scott Luton (18:37):
Right? That’s
Kevin L. Jackson (18:39):
Talk about being sustained. Okay. So p and g has installed high definition cameras equipped with AI technology in high fire threat regions and districts. These AI systems analyze video feeds to detect smoke and other signs of fire. This allows for much quicker response times. And this early detection capability has proven to be very, very effective with AI spotting smoke signals before the manual detection systems alert. In addition to that, PG and i leveraging AI to make the grid management and their predictive maintenance more effective, these sort of different sensors that they put out across the state of California and these applications of AI not only enhance safety and reliability, but it provides a real boost to sustainable operational efficiency, ultimately creating more resilient and responsive energy infrastructure. So sustainability, you have to come at it from many, many directions.
Scott Luton (19:57):
Excellent point. And going back to those cameras that are out there actively monitoring forests and stuff on the heels of some devastating, a variety of really terrible forest fires in recent years. I’m looking forward to seeing how we can take that technology and that, I think what was the company mentioned,
Kevin L. Jackson (20:16):
Pg e
Scott Luton (20:17):
Pg e. I’m hoping we can apply their approach across many other geographic markets and regions, no matter what industry or who owns a property, how we can maybe better manage and minimize these devastating forest fires. I love that AI application there, Kevin. Okay, moving right along. I want to talk. Both you and I are entrepreneurs and I love entrepreneurial components of our conversations. We’re seeing organizations certainly leverage technology every day and the art of the possible to build new business models. So Kevin, how do you see business leaders leveraging AI to develop ESG first innovations, expanding market position and uncovering new growth opportunities? Your thoughts?
Kevin L. Jackson (20:59):
Well, the power of artificial intelligence is creating new ways to do old things. So AI enabled business models can offer tailored renewable energy packages to customers by analyzing their consumption patterns and preferences. And it facilitates this subscription-based models where customers can pay for energy services rather than the energy itself. We’re going away for about the past 10 years, we’ve gone away from buying things to buying services, right? People don’t buy cars anymore, they just use a car service like Uber. And the same thing is happening with our electric grid. This enables and promotes the use of renewable sources and energy efficient technologies. AI can also help create and offer carbon off offset programs with tools to monitor and reduce your carbon footprint by suggesting personalized actions and offering options for you to offset the carbon that you’re putting in the air. I wonder why all of these things are coming out of California, but Southern California, Edison leverages generative AI and other advanced technologies to enable these options to be brought up to the consumers.
(22:34):
They’re also using drones for aerial inspections, and these drones are equipped with AI and machine learning capabilities to inspect the infrastructures. They conduct over 200,000 annual inspections of these electrical assets that are in high fire risk areas. And by quickly analyzing the high definition images, AI can identify issues like equipment degradation, which may not be visible. And these technologies are integrated into their smart grid system to detect and isolate faults very quickly. Overall, Southern California Edison is using generative AI and related technologies to position it themselves as a leader in integrating this innovative solutions to meet the challenges of the modern utility management. So they have that innovation, that entrepreneurial spirit from the inside to create these new sustainable offerings.
Scott Luton (23:47):
Love it, as you said, new ways to do old things, but also I love how one of the common themes of our conversation here today has not been around addressing current problems and finding new band-aids, which is part of global supply chain, right? The reacting side of global supply chain. This goes with the territory, right? But more and more it’s about proactively preventing the problems from even coming up, which I love. And of course, AI and technology plays a massive role there. So good stuff there. Kevin. So you’ve already touched on this, but I’m going to ask you again. You mentioned how Microsoft’s involved in a couple of things that we’ve talked about, but what are some of the other neat things that Microsoft’s doing out there in this age of digital transformation, whether it’s in the energy sector or other industries?
Kevin L. Jackson (24:34):
Well, the Microsoft Cloud is critical to providing data and crunching the numbers so that the operators can get real insight into what’s happening. Think about it. The drone is flying around getting data, and you have to put that data in the cloud so that the numbers can be crunched and the AI can be used to drive the predictive maintenance requirements. They’re also enable that connectivity to the customers so that these carbon offset opportunities are readily available at the push of a button. And the sustainable energy solutions that Microsoft provides includes the ability to empower the workforce to build an inclusive culture that attracts, retains and inspires employees. And this in turn increases operational profitability for the actual companies and creates new and improved and sustainable business models to expand your market position. So energy is really at the forefront of innovation and optimization by they’re there because they’re using data from the Microsoft cloud.
Scott Luton (25:59):
Really cool, Kevin, really cool. And the first part of your response, I love how you touched on that critical connectivity with customers, as we all know, that’s important in a variety of ways, but one in particular, a past guess with us, Kevin Caroline Tix with the L’Oreal group talked about how they’re using that connectivity to become more customer-centric than ever, and gaining these critical insights to serve their customers in ways they value. They’re not doing things, they’re really making sure, coming up with innovative ways to listen to their customers and act on that critical feedback. And of course, none of that happens without really powerful and progressive way of being connected to your customers. So I love that, Kevin,
Kevin L. Jackson (26:42):
Where else you connect the beauty parlor to nuclear power. That’s
Scott Luton (26:48):
Right.
Kevin L. Jackson (26:48):
But here, that’s right.
Scott Luton (26:50):
These conversations, Caroline was great, by the way. What a great past guess. But folks, hope you enjoyed this conversation here today. I love these conversations we’re having. There’s so much to learn in the energy industry and not just how it’s always been, but much more exciting how again, it’s being transformed and being ready to take on the future that lies ahead. So Kevin, really have enjoyed your perspective here today. How can folks connect with the cool things you and the digital Transformers team are doing? Kevin?
Kevin L. Jackson (27:21):
Well, we just recently released a show on how digital assets can support decarbonization to protect Coral in the Pacific Ocean. This was on a digital Transformers recent episode, so it’s really important that you keep track and understand all these new changes by following us on supply chain now.com, digital Transformers. And you can catch us on YouTube. We’re on Apple for podcasts and also Amazon and everywhere, anywhere that you get your podcasts.
Scott Luton (28:03):
So true. And it’s easy and convenient wherever you get your podcasts. Look up digital Transformers with Kevin L. Jackson and where the innovation is a steady stream. Ain’t no sleeping in Kevin’s world, hey, but going back to the Coral, we’d have to have a future conversation around Jacque Cousteau. Imagine what he would do with modern technology when it comes to protecting coral and sea life and our oceans around the world. That’s always fascinating. So we’ll save that for the next conversation. But big thanks to of course, Kevin O. Jackson, be sure to find and subscribe to Digital Transformers wherever you get your podcasts. Hey, big thanks to our collaborative partners over at Microsoft as well, helping us bring interesting conversations, actionable conversations like the one we’re having right here to our global audience. And most importantly, speaking of our global audience, thank you for tuning in. Thank you for all of your feedback you send via social and email and texts. You name it, keep it coming. It’s helping us shape our programming, the more we’re connected with you and we’re listening to your suggestions and all. So thanks for tuning in. Alright folks, as Kevin knows the onus on you now though, because you’ve got to take something that we touched on here and put it into action to change not only the future, but the current status quo, right? Deeds, not words. So with all that said, on behalf of our entire team here at Digital Transformers and supply chain now, Scott Luden challenging you do good, give forward, be the change that’s needed, and we’ll see you next time right back here on Supply Chain now. Thanks everybody.
Intro/Outro (29:32):
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