Wood Mackenzie has unveiled its comprehensive AI strategy to help energy companies navigate the evolving energy system. Details of Synoptic, the company's proprietary AI capability, are outlined in Connected, a new book by CEO Jason Liu and Chair and Chief Analyst Simon Flowers, talking about the increasingly interconnected and complex nature of energy, published today.
The $117 trillion investment opportunity
The energy sector faces mounting challenges transitioning from fossil fuel-dependent systems to diverse, low-carbon futures. The global energy investment needed through to 2050 ranges from $78 trillion under current scenarios, to $117 trillion for net-zero goals, according to Wood Mackenzie.
"The energy system built around multiple fuels and technologies is becoming more interconnected and more complex," said Liu, "Companies can no longer afford to build strategic plans from within a silo.”
The end of siloed energy planning
According to Liu and Flowers, energy leaders need to embrace a new approach to planning. They must embrace scenarios that can adapt to real-time change. Wood Mackenzie's proprietary AI capability, Synoptic, harnesses Machine Learning, Generative AI, and Agentic Systems to deliver more accurate analysis and agile forecasting. The technology promises to reduce strategic planning cycles from months to days while enabling non-technical executives to engage directly with complex energy modelling.
The company describes Synoptic as adding a 'superpower' to its five decades of expertise and comprehensive datasets spanning oil and gas, power and renewables, upstream, carbon and metals and mining.
Flowers emphasized the urgency: "We are witnessing an 'energy evolution' where fossil fuels will remain the bedrock of supply for decades to come, complemented by growth in renewables and other emerging low-carbon fuels. The risks of diversifying into new energy verticals without proper integrated analysis have been exposed, with European Oil Majors seeing returns on average capital employed 3-4 percentage points lower than US Majors due to low-carbon investments."
Integrated modelling
The authors argue that the solution to today's energy challenges is integrated modelling. One example is the case of liberalised power markets, where wholesale electricity prices are typically set by gas-fired generation. This makes it impossible to accurately forecast power prices without understanding gas market dynamics. The authors suggest that many energy companies still rely on sector-specific data that misses the impacts of these relationships.
AI provides real-time intelligence
Wood Mackenzie's real-time sensor network provides unprecedented visibility into energy market dynamics. During a recent heat wave in Maryland, Wood Mackenzie's sensors detected how a major hyperscale data centre strategically shifted computing loads to avoid peak pricing. This demonstrates the type of real-time intelligence that will be crucial for future energy planning.
"Energy firms need to assess whether they are correctly positioned to make the most of the opportunities the evolving system presents," adds Flowers.
The book outlines how AI and data centres are creating new consumption patterns, adding to demand which is already surging, due to population growth and the electrification of infrastructure. Power demand is projected to double by 2050 under Wood Mackenzie's base case scenarios and triple under net-zero scenarios.
"The challenge to address climate change, provide energy security and fair access to energy is significant," says Liu. "An integrated view, leveraging AI capabilities will accelerate progress against these goals. Those who see this opportunity and embrace the technology will be the winners in this new era.”
ENDS
For further information about the book Connected, visit https://www.woodmac.com/connected-book/ or contact Wood Mackenzie's media relations team:
Mark Thomton – Americas
+1 630 881 6885
Mark.thomton@woodmac.com
Hla Myat Mon – APAC
+65 8533 8860
hla.myatmon@woodmac.com
Chris Boba – EMEA
+44 7408 841129
Chris.Boba@woodmac.com