AI helps to navigate decisions in the era of uncertainty. Hitachi’s approach.
The current global situation is marked by deep uncertainty, with geopolitical factors playing a crucial role in shaping energy and commodity markets. Several key challenges are influencing decision-making in these sectors:
- Political instability and conflicts can lead to disruptions in critical supply chains, affecting energy production, transportation, and distribution.
- The pace and scale of renewable power proliferation remain uncertain, as policy decisions, technological advancements, and investment levels fluctuate.
- Geopolitical tensions have a direct impact on commodity prices, leading to unpredictable fluctuations that complicate long-term planning.
- Inflation, interest rates, and exchange rate variations add another layer of complexity to the already volatile market environment.
In such an unpredictable setting, decision-makers must adopt a strategic approach that incorporates data-driven insights and advanced modeling techniques. The following elements are crucial:
- Realistic “What-If” Scenarios: These scenarios must be grounded in a vast array of historical and current data, both structural and unstructured. AI-powered analytics can process a huge amount of data and help uncover hidden dependencies and interconnections that may not be immediately obvious.
- Comprehensive Asset and Market Modeling: Accurate models of energy assets, transportation networks, and trading opportunities enable organizations to simulate different market conditions effectively. These models help decision-makers assess potential risks and optimize their strategies under various scenarios.
Looking at the power market, it is evident that policymakers recognize the need for significant investment in the network to support the continued growth of renewable energy in power systems. Many countries have planned substantial investments in the power grid and related infrastructure. Effective planning requires sophisticated modeling of the power network and realistic scenarios for supply and demand development. AI-driven market simulations can optimize investments in power networks and related infrastructure. AI also plays a crucial role in forecasting demand, supply, and price trends, enabling power producers to make informed investment and operational decisions.
Hitachi positions itself as a key player in providing solutions for both network and asset modeling, as well as AI-driven scenario management and forecasting. In a recently published paper (5) Energy Transition in an Uncertain World: Why Predictability Matters More Than Ever | LinkedIn, Huge Stappers, Hitachi Energy’s Global Sales Leader, explains how their offerings can help companies navigate the challenges, with a particular focus on power and renewable energy.
For instance, for power grid expansion Hitachi’s solution suite includes a transmission modeling system with a wide range of planning capabilities. These include zonal and nodal Locational Marginal Price (LMP) forecasting, renewable siting and curtailment analysis, Financial Transmission Right (FTR) valuation, environmental impact assessment, asset valuation, interconnector socio-economic welfare analysis, and transmission congestion analysis.
Market simulations provide a testing environment for various market conditions by modeling factors such as regulatory changes, fuel price fluctuations, and demand shifts. The AI-powered forecasting solution, Nostradamus AI, offers advanced capabilities by leveraging historical data and machine learning algorithms to predict demand, production, and price fluctuations.
Hugo believes that with Hitachi’s solution suite, companies such as transmission operators, planners, renewable asset developers, marketers, and traders can transform uncertainty into opportunity.
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