Feb 25, 2025 04:24 PM IST
The report also says that only 17 per cent are bullish and are aactually investing in AI while another 17 per cent are in a wait-and-watch mode.
Generative AI (GenAI) will play an important role in India’s energy sector, according to an EY India report which found out that 49 per cent of the respondent energy companies to its survey are actively exploring the use of artificial intelligence for their functions.
This is because GenAI is capable of improving efficiency, sustainability, and cost-effectiveness, according to the report titled ‘How much productivity can GenAI unlock in India? The AIdea of India: 2025.’
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However, only 17 per cent are bullish and actually investing into AI while another 17 per cent are in a wait-and-watch mode with small experiments.
This is despite 66 per cent of the respondents having initiated Proof of Concepts (POCs) for GenAI.
Proof of Concepts refer to demonstrations which show that a proposed idea is actually feasible or viable in real life applications.
What energy firms are using GenAI for
The survey also highlighted that mature enterprises usually allocate 0.4 per cent to 0.7 per cent of their revenues to AI and Machine Learning (ML) initiatives, and that they achieve a Return on Investment (ROI) of around 2 per cent of their annual revenues.
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The energy companies in question are using GenAI for functions such as predictive maintenance, real-time grid optimization, and personalized customer engagement.
Fifty per cent of the respondents believed AI has been instrumental in reducing costs, 33 per cent said that AI has improved customer satisfaction, and 17% have said it contributed to employee satisfaction.
GenAI has been most used for marketing applications in the oil and gas sector, boasting 50 per cent of its implementations, followed by procurement, R&D, finance and operations at 33 per cent.
Exploration, production, refining and distribution functions are also increasingly using GenAI to streamline operations, enhance safety, and reduce costs.
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The crucial point of learning here is that “companies that prioritize modernizing their data infrastructure before implementing advanced GenAI applications are seeing significantly better returns,” said Gaurav Moda, Partner and Leader, Energy Sector, EY-Parthenon India.
“It’s not just about adopting the technology – it’s about building the right foundation to leverage it effectively,” he added.
However, there are some challenges for the sector too, such as poor data quality due to legacy systems, cybersecurity risks, and limited availability of AI talent.
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