By Bryony Collins, Bloomberg New Energy Finance editor. This article first appeared in BNEF’s ‘New Energy Deals’ publication, available to clients on the web and on the Bloomberg Terminal.
Microsoft Corp. is building a business in the power and natural resources sectors, where its machine learning and artificial intelligence expertise may help give some companies an edge.
The software giant is working with Norwegian utility Agder Energi AS to fine-tune the supply-and-demand balance on electricity grids using AI technology, according to Egbert Schroeer, Microsoft’s managing director for the process manufacturing and resources industries.
“We want to make the power grid more efficient and predictable,” Schroeer said in an interview with Bloomberg New Energy Finance. “The more Agder expands into distributed generation, like rooftop solar, batteries, smart homes and facilities, the (Azure) system can help provide support back to the grid at times of high demand.”
Azure is Microsoft’s cloud computing platform, which finds patterns in data collected by sensors in the real world, interprets this data, and can make decisions about maintenance or remote monitoring as a result of its AI capabilities. In Germany, Microsoft has a partnership with EnBW AG to develop smart street lights, which can do a host of things from collect emissions data to charge electric vehicles.
With ABB Ltd., Microsoft will “launch the next generation of electric vehicle charging platforms”, together with the “world’s largest industrial cloud platform”, which will encompass 70 million connected devices, Schroeer said. The Swiss power and automation company already runs on Microsoft’s Azure platform and its Cortana Intelligence suite. Other customers in the AI space for Microsoft include Siemens AG, Schneider Electric SE and Halliburton Co.
The trend to gather more data and deploy machine intelligence to interpret it, is disruptive for the technology industry, Schroeer said. Amid this change, customers are becoming more like partners, he said. “Our typical engagements with these companies no longer starts with simply selling software, but with a workshop where we envision a new business model and combine forces to reach the next level of a system of intelligence,” Schroeer said in the following interview.
BNEF: How is Microsoft working with machine learning (ML) and advanced intelligence (AI)?
Schroeer: At the end of last year, Microsoft expanded its artificial intelligence efforts with the creation of a new Microsoft AI and Research Group. Microsoft’s deep investments in the field are advancing the state-of-the-art in machine intelligence and perception, enabling computers that understand what they see, communicate, answer complex questions and interact with their environment. Digital technology is transforming our lives, businesses and the world, but also generating an exponential growth in data and information. Today’s assets are more intelligent thanks to technologies such as AI and machine learning.
To reach this level, we must fulfill the needs of industry standards such as GxP or NERC CIP [requirements to ensure the reliability of the electrical system] for power and utilities. The team works on how to enable the cloud under regulatory compliance, which is very prevalent in the energy sector.
Q: What companies or projects has Microsoft been involved with in the ML, AI space related to energy?
A: One of our engagements is with Agder Energi, [whom] we worked with to use machine learning and AI to optimize energy consumption and energy load on the electricity grid, because you have regional dependencies and weather dependencies.
Another example is Ecolab Inc. Ecolab has partnered with Microsoft to use cloud computing to speed up how industries tackle water scarcity. Ecolab 3D Trasar technology, built on the Microsoft cloud and using the Azure IoT suite, uses sensors in facilities around the world to gather data from in-plant water monitoring equipment.
This data is transferred in real-time to the cloud, providing [useful data for] cooling towers and other water-intensive processes. We realized this was not limited to just water consumption, but that it was also relevant to the energy industry in terms of coolers and condensers. Machine intelligence can be used for predictive maintenance for example.
Q: So is Microsoft working on projects to forecast power demand and generation, or to maintain steady power grid supply?
A: We have invested in that area in three core technologies – predictive maintenance, remote monitoring and asset management. So, with more or less one click, you can enable your sensors to connect to the Azure cloud and find patterns based on AI and ML, which tell you when you need to make proactive changes.
Through our partnership with Agder Energi, we want to make the power grid more efficient and predictable. The more Agder expands into distributed generation, like rooftop solar, batteries, smart homes and facilities, the system can help provide support back to the grid at times of high demand.
Another company we have been working with is EnBW in Germany, where we collaborated on a smart street light project. These street lights are light sensitive, movement sensitive, act as Wi-Fi hot spots and also as a power charging station for electric cars. The street light is becoming a data collection station tool – to monitor air pollution, carbon dioxide emissions and so on.
That brings me to our partnership with ABB. Microsoft and ABB have joined forces to launch the next generation of electric-vehicle charging platforms. This platform is run by the Azure cloud and improves the way an electric vehicle is charged.
We also have a strategic partnership with ABB to create the world’s largest industrial cloud platform, using 70 million connected devices and more than 70,000 digital control systems. ABB uses Microsoft’s Azure IOT suite and Cortana intelligence suite.
In the public sector, we also run a project and solution area called City Next. Here we are delivering innovative digital services that optimize city operations and infrastructure, and we use smart grid and energy management tools.
Q: How is the automation and intelligence trend changing the technology industry?
A: Digital transformation is disrupting the industry, because our customers like ABB and EnBW are becoming more like partners than customers, and we work together on these innovative technologies, such as smart grids or EV charging. Our typical engagements with these companies no longer starts with simply selling software, but with a workshop where we envision a new business model and combine forces to reach the next level of a system of intelligence.
Our partner ecosystem includes Rockwell Automation Inc., Schneider Electric SE, Siemens AG and Halliburton Co. – which are moving into the cloud and show digital leadership.
We recently announced a partnership with Schneider Electric to accelerate the development of Open IoT applications such as simulation in the cloud, virtualizing power plants and production plants, so that the engineer can learn from the simulation.
Artificial intelligence can even extend to areas like precision farming. A sprinkler irrigation system can be controlled to cover a specific area by doing an overhead survey with a drone and connecting the sprinklers up to AI. Farmers can then achieve better yields by controlling specific quantities of fertilizer.
This relies on an ecosystem of farmers, equipment suppliers, traders and a technology provider like Microsoft. These stakeholders need an artificially intelligent shared data platform to support this precision farming and prevent drought.
Every company is becoming a data company and everything a data source, including the tractor in the precision farming area. Here we touch the “connected vehicle” approach in a new and different way.
Q: What are the opportunities for blockchain in this space?
A: Blockchains can help track products in warehouses or in transit and ensure quality and integrity across the value chain. Blockchain can help with the authenticity of products and processes run in real time to pro-actively mitigate supply-chain risks. Blockchain has certainly grabbed the attention of the regulated power industry. [It has relevance to] smart grids and new forms of energy trading. Both utilities and consumers will produce and sell electricity and blockchain is a supporting capability in the cloud.