Harnessing AI for Climate Resilience: The Future of Utility Infrastructure

Welcome to FinTech TV.

I'm Remy Blair.

Artificial intelligence is playing a big role in helping utilities build infrastructure that can withstand extreme weather and be more prepared for climate change.

As such, utilities are turning to AI to boost climate resilience and the technology can improve grid reliability, help predict and prevent outages and better manage.

The growing challenges from extreme weather caused by climate change.

AI-driven tools also help utilities analyze real-time data from sensors, weather forecasts, and past trends.

And with this data, AI can't predict which parts of the grid are most at risk from storms, heat waves, or wildfires.

Joining me live at the New York Stock Exchange is Jeff Gitterman, CEO.

Of Gitterman Asset Management.

Jeff, great to have you here.

Thank you so much for joining me.

Thanks.

Great to be here.

Well, as the UN General Assembly gets underway, it is also climate week here in the city.

So of course when we're talking about utilities, how are they actually balancing some of the regulatory challenges with some of the resilience strategies?

So it's interesting because we have kind of converging issues.

On one side we have incredible increased energy demand for the first time in decades, going from really almost 1 to 2% or flat energy demand over the last few decades to 6 to 8% predictions on energy demand because of AI, but at the same time we also have utilities really digging deep and you know, on big scale.

Just trying to find ways to enhance the grid technology.

So there's a bunch of different areas that they're looking at.

You mentioned a few of them.

Some additional ones are really where is vegetation a potential fire issue.

So you've got Drones that are now flying over these sites that the utilities have wiring through or infrastructure through and that they can now start analyzing and measuring the grid risk of potential fire due to excess vegetation.

So getting crews out there much quicker than they would have before to pare back the vegetation.

They're also looking at peak flows.

They were In 2 week weather forecasting on utility grids up until very recently.

Now all of a sudden they're out at like 7 month predictive capabilities on peak energy demand.

You imagine that gives them a much longer leeway to avoid brownouts and downed infrastructure and energy for clients, and that's really the biggest problem for utilities. when the energy demand is high and it isn't available, it's the biggest criticisms, the biggest complaints of customers.

So if they can tackle that ahead of time and really think about where we deploying or getting more energy from during those cycles, then it again is a huge help towards the utilities and profitability of the utilities and resilience of the utilities.

Yeah, and we're talking about artificial intelligence and what it can actually do as a use case for utilities, but at the same time we're talking about consumption and how that is increasing given the demands for energy given AI.

But what about scaling some of these resilience plans?

What needs to happen?

I mean when you're scaling you need really big interconnectedness among grids and a lot of the problems that we have right now is a lot of these grids, they're all state operated, so they're just bad and then sometimes even within states like Texas, all the different silos are not integrated at all.

Even cross state, you can have the grid support from one state into.

Other state if in advance that's all looked at and talked about and discussed and agreed upon.

So the idea that you can know 7 months in advance that you're going to have potential grid failures in New Jersey allows you to then communicate to New York and reach out and say, are there off supplies that we can get accumulated wind or solar storage that's built up that isn't.

In peak demand, battery storage capability is really ramping up quickly.

That's going to be probably the biggest impact is to know that 7 months from now without these problems, can we deploy battery storage into some of those areas so that we can stock up on some of this energy flow that isn't needed now but is going to be needed in the dead of winter in January or February.

Yeah, and I'm not looking forward to the winter months as we head into the final quarter of this year, but you mentioned several states there, so as states think about investing, what are we talking about when we're looking at actual figures here for planning?

I mean unfortunately right now you're seeing mostly blue states do the investments, so you're seeing big investments by Massachusetts, New Jersey, New York, Maryland.

You're not seeing it as much across red states right now, although Texas has been the biggest developer of renewable energy.

It's surpassed California.

It's getting a lot of its energy at this point, new energy coming from renewable wind and solar.

So that's one of the exceptions on the red state side, but blue states are putting a lot of money.

Because they have resilience kind of quotas that they have to meet on this forward looking infrastructure issues and now we know the energy demand is coming, we know it's ramping up.

There's, you know, going to have to be decisions made of do I make sure that the town of Phoenix has lights and air conditioning during the summer months, or do I make sure that the brand new data center is getting the energy flow that they need and the water that they need and It's very difficult for humans to predict that going forward without the benefit and help of AI.

It won't happen well.

It'll become much more problematic.

AI could potentially solve a lot of those problems for us right now.

And finally, I do want to ask you about grid resilience nationwide when it comes to utilities.

So what needs to happen as we move into hurricane season, move past it and into 2026.

So one of the things that AI can do is it can actually do storm damage assessments, which is something that we haven't been very good at before.

So we can literally say, and there's a lot of different programs now that are doing this.

Yeah, but Taiwan in Taiwan you have a monsoon that Hitting a typhoon that is hitting, it can do predictive analysis.

I actually saw reports coming out as early as the beginning of last week saying it looks like 23rd to the 25th there's going to be a typhoon hitting.

It's going to be very large and extensive.

You can start modeling out.

There's these twins, so they run literally like a duplication of the world on a software data system, an AI run, and you can look at what is the storm potential damages.

Where do you need to get crews in in advance so they're positioned so as soon as the storm passes, those crews are there and waiting to start working on rebuilding grid and infrastructure.

So the best thing you can do right now is be predictive, and AI is an extreme help on predictive analysis.

The models aren't perfect.

You can do a lot of predictions and then locally you can have events that don't track the way that you think they're going to track, but It's much more beneficial than the current situation that we're under.

Yeah, and Jeff, while you were talking about this, I had an image in my head from a weather disaster movie that I've seen in the past.

So even with this technology, this predictive technology, as you mentioned, the probability of an event turning out the way that it predicts, we don't know whether that will happen.

But when it comes to enforcement and what actually happens, what do you think needs to be done on a massive?

Scale for this technology to be actually adopted.

I mean, we've talked about it before.

The threat of removing FEMA as a backstop is going to force states and municipalities to take this much more seriously than they have in the past because now they're looking at their whole revenue model on their municipal bonds on climate migration issues.

If a storm becomes too bad post, people can't rebuild, they can't stay there, so we're seeing way more state.

Interest in resilience also post Helene and post the LA fires where we saw incredible amounts of damage occur that will have a long term lasting impact on the revenues for those states.

So we're seeing much more focus and demand again.

So far much more on blue states.

I think that'll start carrying over into red states for sure because storm damage is storm damage and you have to deal with it in advance if FEMA is coming to pay all the bills and pump money into the system post these storms.

So I think what needs to be happening is starting to happen on the ground and you're seeing a lot more awareness of we need to build resiliency into the communities that we live in.

Well Jeff, a lot to consider as climate week gets underway here in New York City, so thank you so much for joining me and thank you for sharing all of your insights.

Thanks for having me.