Integrating artificial intelligence into business

Luis F. Gonzalez, Chief Power Operations, Aboitiz Data Innovation

About the Author

As Chief Operating Officer of Aboitiz Data Innovation (ADI) Power and Chief Data Officer of Aboitiz Power Corporation (AboitizPower), Luis is focused on scaling the development and implementation of AboitizPower data science and artificial intelligence solutions to support operational efficiency, revenue generation, risk Stewardship and ESG initiatives.

Luis has 24 years of experience leading and developing artificial intelligence solutions, enterprise software, and digital transformation of industrial enterprises. He has worked with more than 50 clients in Asia Pacific, North and South America, Europe and the Middle East. He is the co-founder of the Asia Pacific Institute for Artificial Intelligence, a non-profit research organization dedicated to the ethical deployment of learning algorithms in society. He is also a guest lecturer in Nanyang Technological University’s MBA program and Kellogg’s and Harvard’s data science course Emeritus Platform. Luis serves on the advisory boards of several startups applying machine learning to NFTs, social media, education, and neuroscience.

Prior to joining ADI, Luis served as Managing Director of Element AI Asia, a Canadian deep learning startup. He also served as Vice President and Chief Customer Success for GE Digital, where he was responsible for the delivery and execution of all GE Digital projects in the power, aerospace, oil and gas and transportation sectors. He served as Chief Digital Officer of GE Power and was responsible for Asia Power Digital PNL.

Luis holds a bachelor’s degree in international business and computer science from Victoria University and a postgraduate degree in software engineering from the Chinese University of Hong Kong. He also holds graduate diplomas from MIT in the areas of Machine and Deep Learning, Data Science, Internet of Things, and Smart Manufacturing.

Impact of emerging developments in artificial intelligence

In the power industry, as in all industrial sectors, the main competitive advantage used to be efficiency. We continually make small improvements to eliminate inefficiencies and maximize return on investment in fixed assets. The disciplines of Six Sigma and Kaizen grew out of a focus on improving the efficiency and effectiveness of technology. However, with the drive for sustainability and the urgent need to achieve net zero emissions, our engineering and technology are almost reaching their limits, requiring adjustments to existing models.

“Build an ecosystem of solution providers around you and develop a culture that understands how to be a digital enterprise and the ability to work with data science teams.”

The next competitive advantage for electric utilities will be adaptability. For large industrial companies, becoming flexible and adaptable is a major challenge. Therefore, access to near-instantaneous data is critical for making fast decisions, allowing companies to adapt to climate change, volatile market conditions, new emissions targets, and dynamic demands from fuel sources and customers. The speed of decision-making, the vast amounts of data generated, and the ability to address these challenges would not be possible without artificial intelligence. Only with artificial intelligence can we dynamically optimize power generation in response to market demand, intelligently distribute energy where it is needed most, and more importantly, help ensure the reliability, affordability and sustainability of the energy system.

The experience you gain from successful data initiatives that positively impact decisions and business outcomes

Aboitiz Data Innovation (ADI) is working closely with AboitizPower to transform its commercial plant operations to further connect its assets and commercial operations. This integrates end-to-end processes for generation, asset management, contracting and energy asset trading. We also help them transform their power plants into smart power plants, which will eventually be combined with their trading operations to realize their strategic vision of virtual power plants. Finally, we have taken steps to improve the reliability of AboitizPower’s assets through the implementation of anomaly detection and asset health identification algorithms for critical components of power plants and grids.

Business challenges that current services cannot solve

By far the most significant challenge facing AI solutions is their development under real-world conditions, with all the key considerations required for an operating organization in the power industry. Even working with partners in industry, we often find that there is a gap between proof of concept and true market fit that is difficult for pure-play technology companies to close.

Recognizing this, we took the initiative in adapting, recognizing that our AI investment strategy projects must be within a paradigm where we are at the core of solution development, not just consumers of pre-made products. This means participating in the development and maturation of solutions rather than waiting for others. This is the raison d’etre of Aboitiz Data Innovation and underlines the importance of developing digital capabilities capable of managing product development within the Aboitiz Group and beyond.

Data and artificial intelligence shape the future of our industry

Data and artificial intelligence will profoundly reshape industries. In the power sector, we expect the emergence of more adaptable power plants, marking the end of the era of large generation facilities. The future will usher in hybrids – combining fuel-based generation, renewable energy and energy storage systems in a more decentralized and integrated way. Data will enable better design of power installations and diversified asset risk management. Additionally, we will become better at brokering demand, responding to energy consumption faster, and predicting trends and seasonality better. Power sharing schemes and distributed generation may increase grid resiliency. Finally, we must complement the traditional energy paradigm with a consumer perspective. Once customers become more involved and aware of energy savings, they make trade-offs between saving money and helping the environment.

Advice for tech industry pros on the dos and don’ts

If you’re a technology vendor, understand that technology’s adaptability is its most important strategic asset. This will require the creation of almost “tailor-made” solutions or productized services. This means evolving your client relationships into true partnerships that consider shared ownership, revenue sharing, and other market-making growth for both parties. Success lies in new business models, not just marginal benefits (e.g., efficiency vs. adaptability). If you think you can leverage your customers’ profiles to develop universally applicable and scalable technology solutions, then that business model is outdated and will hinder growth. We are entering an era of closer relationships, and insights from the model should foster deeper understanding and strengthen partnerships.

If you operate energy assets or sell energy, learn to build and operate new solutions with partners. Develop an ecosystem of solution providers around you and cultivate a culture that understands how to be a digital enterprise and the ability to collaborate with data science teams. Transformation comes from building these partnerships and co-developing new business models. Believing that you can simply adopt the next best-in-class AI solution as a fast follower is risky; you may not be able to adapt your business fast enough to survive. The way we produce, distribute and consume electricity and other services will fundamentally change over the next 20 years. Incumbent utilities may not be able to continue with the model they have had since the early 1900s. The transformation of large industrial enterprises will take at least 7 to 10 years, and all enterprises will not have time to adapt.