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This article was originally published by The Financial Times, September 2025. Read the full report and the Microsoft perspective.
AI is rapidly emerging as a transformative force – empowering the workforce, streamlining operations and accelerating scientific discovery at a pace not seen in decades.
As the world works to accelerate towards net zero, the climate and energy landscape presents both extraordinary challenges and unprecedented opportunities. And we believe that innovation – powered by cloud, data and AI – is key to unlocking a sustainable future.
The complexity of the energy transition demands a global, cross-sector ecosystem of collaboration. The path to decarbonisation is not linear, and it is clear there is no single solution. From ageing infrastructure and workforce shortages to regulatory hurdles and market volatility, the energy sector faces multi-faceted challenges. At the same time, these challenges are fertile ground for innovation, with technology as the catalyst that can bring it all together.
But transformation isn’t a switch that flips overnight; it’s a journey made of countless small steps that, together, create a giant leap forward over time.
AI for permitting: Unlocking grid modernisation
One of the most persistent bottlenecks in clean energy deployment is permitting. Around the world, permitting processes for grid expansion and developing new generation assets such as wind and nuclear are notoriously slow, complex and costly – often spanning thousands of pages, taking up to a decade to complete and costing hundreds of millions of dollars.
Generative AI offers a new pathway forward. Microsoft’s GenAI for Energy Permitting Solution Accelerator is designed to transform this space. It can rapidly assess documents to identify missing information, discrepancies, or areas of non-compliance. It drafts new documents by refining relevant data for human review and enables experts to query Copilot for insights across datasets and regulations.
By reducing administrative burdens and enhancing compliance, AI is already helping energy systems scale faster, integrate more carbon-free energy and improve grid reliability.
Reshaping energy trading with agentic AI
AI is also transforming energy trading and grid operations, enabling smarter, cleaner and more responsive systems. With real-time sentiment analysis and agentic AI, traders can anticipate shifts in market psychology and price volatility and make faster, more informed decisions and manage risk dynamically. Today, agents can summarise current and historical commodity prices, accelerate counterparty risk assessments, and automate the creation of trade contracts.
Advanced AI models that integrate weather, grid, commodity and geopolitical data are helping grid operators optimise costs and balance supply in real time, while enabling customer-led flexibility to maximise clean energy use. As energy markets become more complex and decentralised, AI is driving greater resilience, sustainability and competitive advantage.
Accelerating scientific discovery
Beyond operations, AI is revolutionising the pace of scientific discovery, especially in the search for climate-critical innovations. Microsoft recently used novel AI models to digitally screen over 32 million potential materials, identifying more than 500,000 stable candidates. Traditionally, this process would take years of high performance computing and costly lab experimentation. AI has compressed that timeline to weeks, or even days.
In collaboration with the US Department of Energy’s Pacific Northwest National Laboratory, Microsoft’s Azure Quantum team applied advanced AI to discover a new material not found in nature, with potential for resource-efficient batteries. PNNL scientists synthesised and tested the material, demonstrating its unique properties and viability as a sustainable energy storage solution, using significantly less lithium than current alternatives.
This breakthrough matters. Solid state batteries are assumed to be safer and offer higher energy density than traditional lithium-ion batteries. Lithium is scarce, expensive and environmentally challenging to mine. A battery that reduces lithium use by approximately 70% could deliver enormous environmental, safety and economic benefits.
A transformative force for the energy sector
Generative AI is not just a tool, it’s a transformative force for the energy sector. And these innovations are not hypothetical, they’re happening today. From streamlining permitting to accelerating discovery and optimising trading, AI enables us to tackle the energy sector’s most persistent challenges with speed and scale.
At Microsoft, we see every challenge as an opportunity to innovate. That’s how we’ve operated for more than 50 years. By harnessing the power of cloud, data and AI, we’re committed to working together to advance net zero goals and power the energy future.
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About Microsoft
With Microsoft, energy operators and providers have access to a global partner ecosystem and modern productivity platform at the scalability and reach they need with the security to protect their IP assets, operations and data. By uniting AI and data platforms, as well as productivity, intelligent cloud and intelligent edge, Microsoft enables companies to solve their most complex challenges, accelerate the energy transition, and deliver better outcomes.
