How AI could transform global energy efficiency

Artificial intelligence could unlock a new wave of energy savings across industries and buildings worldwide, helping tackle one of the most overlooked yet cost-effective tools in the fight against climate change, according to experts cited by the Financial Times.

Despite decades of recognition as a crucial pathway to reducing emissions, energy efficiency remains significantly underutilised globally. Experts say the challenge often lies not in the technology itself but in the complexity of identifying where energy is being wasted and implementing improvements at scale.

Artificial intelligence is increasingly being viewed as a solution capable of overcoming these barriers by processing vast amounts of operational data and identifying inefficiencies that humans would struggle to detect.

“AI can understand where the problems are and where the waste is — and you don’t need five people with PhDs looking at monitors all day,” said Brian Motherway, head of energy efficiency at the International Energy Agency (IEA).

In industrial facilities containing thousands of motors, pumps, valves and other components, AI systems can continuously analyse performance data and recommend adjustments to reduce energy consumption. According to Motherway, the volume of information generated by modern industrial operations exceeds what humans can realistically manage.

“It’s beyond the power of anyone to handle all that data,” he said.

The need for progress is becoming increasingly urgent. IEA data shows that advances toward global energy-efficiency targets have slowed in recent years, particularly within the industrial sector.

“In some ways that’s surprising because it’s where the financial case is clearest,” said Motherway.

However, he noted that practical and cultural obstacles often hinder investment in efficiency measures.

“Maybe the CEO loves the idea of cutting ribbons on solar-panelled roofs but it’s hard to get excited about a boiler.”

Experts argue that efficiency projects often attract less attention than renewable energy developments because their benefits are less visible and typically emerge over longer periods.

“It’s not such a big story to tell,” said César Quilodrán-Casas, an advanced research fellow in machine learning at the Grantham Institute for Climate Change and the Environment at Imperial College London.

Unlike large-scale renewable projects, improving efficiency frequently requires customized upgrades at individual facilities.

“Companies need to go factory by factory investing in bits of kit that are often bespoke,” said Sam Kimmins, director of energy at the Climate Group.

Yet complexity is precisely where AI may offer the greatest advantages.

“AI is really good when you’ve got complex and highly unpredictable data,” Kimmins said.

One promising application involves combining AI with digital twin technology, which creates virtual models of physical assets and facilities. Originally developed for NASA spacecraft simulations in the 1960s, digital twins allow operators to test changes digitally before implementing them in real-world environments.

According to research cited by the Financial Times, AI-powered digital twin systems deployed at renewable energy facilities reduced unplanned downtime by 35%, increased energy production by 8.5%, improved fault-detection accuracy by 98%, and lowered energy costs by 26%.

Similar opportunities are emerging in sectors such as agriculture, where AI can optimise greenhouse heating and irrigation systems to reduce power consumption.

Nevertheless, experts caution that AI is not a standalone solution.

“Given the phenomenal amount of energy AI uses, it’s going to have to do a lot of heavy lifting on energy efficiency to wash its face,” said Kimmins.

“A lot of people want to throw AI at everything, but systems need to be ready for it,” added Quilodrán-Casas.

Industry leaders stress that AI must be supported by broader investments and policy measures.

“AI is unquestionably a powerful enabler, but it works best when combined with electrification, infrastructure investment and supportive policy,” said Stephen Horrax, UK and Ireland director of energy at engineering consultancy Ramboll. “Without those, its impact will be incremental.”

Still, many experts believe growing enthusiasm around artificial intelligence could help bring long-overdue attention to energy efficiency.

“If it makes it more exciting to engage with energy efficiency, that’s great,” said Kimmins. “Because we have a lot of really simple solutions that we need to implement to save a lot of money and energy.”

Motherway believes the technology could mark a turning point for global efficiency efforts.

“We could be at a moment where we could step up efficiency progress, particularly in industry, unlocked by AI.”

By Sabina Mammadli