Fortunately AI can’t (yet) replace the Watt-Logic blog!

Trying to catch up on my CPD for the year, I just listened to a webinar about the use of AI in business. This year I have experimented more with ChatGPT in my work to see where it can provide me with shortcuts. What I’ve learned is that it can be very useful in speeding up research, particularly where I’ve been trying to find information where the source material is not in English, but it needs to be treated with caution since sometimes ChatGPT simply makes things up! So it’s essential to always verify “facts” presented by the AI and to visit the sources. Where sources are not provided, it’s important to ask for them.

For example, when I was writing my report on heat pumps, I was looking at the Dutch market, and observed an increase in heat pump sales. I asked ChatGPT to explain the reasons for this and it told me the subsidy had become more generous, however it appeared that the opposite was true. When I asked the AI to explain this discrepancy, it told me it was “general knowledge” that the subsidy became more generous. But AIs don’t have general knowledge, they have input data and programming.

Over the year, ChatGPT has improved a lot. When I wrote the heat pumps report, it was not standard for it to provide links to source data, so I had to ask for them specifically. But when I used it in writing this week’s blog on demand-side response, I got links immediately, but also mis-information. ChatGPT gave me incorrect data on DSR participation in capacity auctions – the numbers were in the right ball park, but were not accurate. I got the accurate numbers from the Capacity Market Registers on the EMR Delivery Body website.

But it definitely speeds up the process of research. I wanted to verify a figure of 1.8 GW for triad avoidance, and ChatGPT found me a credible source stating that triad avoidance resulted in peak shaving of around 2 GW. I got this much faster than I would through Google searching. So my conclusions is that it’s a useful tool, but only if its limitations are understood – you can’t take it’s output on trust, it really needs to be verified.

Can I be replaced by AI?

Out of interest I set ChatGPT the task of writing a summary of 2024 in the style of my blog. The results were hilarious – blow is my favourite of the bunch…

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Energy Markets 2024: A Year of Political and Geopolitical Crossroads

2024 has proven to be another tumultuous year for global energy markets, marked by the enduring impacts of geopolitical conflicts, shifting policy priorities in major economies, and a growing sense of urgency in addressing climate and energy security challenges. The interwoven effects of the war in Ukraine, unrest in the Middle East, and pivotal political elections in the UK, Europe, and the US have created a complex and unpredictable landscape for energy stakeholders.

Geopolitical Tensions and Their Repercussions

The war in Ukraine continues to cast a long shadow over energy markets, particularly in Europe. Russia’s decision to curtail gas flows via Ukraine at the expiration of a critical transit agreement underscored Europe’s persistent vulnerability to energy supply shocks. However, the anticipated disruption was mitigated by Europe’s successful diversification efforts. By securing alternative LNG supplies and expanding renewable capacity, countries such as Germany and Poland have significantly reduced their dependence on Russian gas. Despite this progress, smaller nations like Slovakia and Hungary remain exposed, highlighting the uneven progress of the EU’s energy resilience strategy.

Meanwhile, the Middle East’s deteriorating security situation added another layer of complexity. Although oil markets have shown surprising stability, this belies the risks posed by escalating tensions involving key producers. The potential for supply chain disruptions and price shocks remains a central concern for energy importers globally, particularly as economic recovery in Asia increases demand.

Political Winds Shaping Energy Policy

2024 has also been a year of significant political shifts, with elections in the UK, the US, and Europe introducing new uncertainties and opportunities in energy policy.

• • United Kingdom: The UK’s general election resulted in a hung parliament, with energy policy emerging as a critical issue in coalition negotiations. The Conservative Party’s proposals to expand North Sea oil and gas licensing clashed with Labour’s focus on accelerating the transition to renewables and insulating homes. The political deadlock has delayed key infrastructure decisions, raising concerns about the UK’s ability to meet its net-zero targets while ensuring energy affordability for households.
  • United States: The US presidential election added to the sense of unpredictability in global energy markets. The re-election of President Biden solidified the continuation of policies favoring the energy transition, including increased investment in renewables and electrification. However, partisan gridlock in Congress limited the administration’s ability to advance more ambitious climate measures, leaving the energy sector in a state of limbo. Oil and gas producers, buoyed by resilient domestic demand, continue to invest cautiously amid fears of regulatory changes.
  • Europe: National elections in Poland and Spain, along with European Parliament elections, have reinforced the EU’s commitment to decarbonization. Yet, disagreements over the pace of change and funding mechanisms persist, with divisions between member states becoming more pronounced. The EU’s Green Deal framework remains a cornerstone of policy, but it faces increasing resistance as high energy prices and economic pressures strain political cohesion.

Market Dynamics and Economic Pressures

The energy markets in 2024 have been shaped by the interplay of these geopolitical and political forces, alongside fundamental supply and demand dynamics.

• • Oil: Brent crude prices averaged around $70 per barrel, reflecting a delicate balance between ample supply and subdued demand growth. Non-OPEC producers, particularly in the US and Brazil, have increased output, offsetting production cuts by OPEC+. The global shift toward electric vehicles and improved energy efficiency continues to temper long-term demand expectations.
  • Natural Gas: Europe’s gas storage levels remained robust throughout 2024, aided by mild weather and effective procurement strategies. LNG imports from the US and Qatar have become a cornerstone of Europe’s energy security, but the high cost of these supplies raises questions about competitiveness in industrial sectors.
  • Electricity Prices: The UK and much of Europe have faced persistent challenges in stabilizing electricity prices. Renewable energy expansion has been hindered by supply chain constraints and planning delays, while the intermittency of renewables has underscored the need for greater investment in grid infrastructure and energy storage.

Broader Implications and the Path Forward

The energy market developments of 2024 reflect a world in flux, grappling with the twin imperatives of ensuring energy security and addressing climate change. Geopolitical tensions have highlighted the fragility of global energy supply chains, while political transitions have both opened doors to progress and introduced new obstacles.

For policymakers and market participants, the lessons of this year are clear. Investments in resilience—whether through diversified supply chains, robust infrastructure, or strategic reserves—must remain a priority. At the same time, the energy transition cannot be allowed to falter, as the risks of inaction on climate change grow ever more severe. As we look ahead to 2025, the ability of governments, businesses, and consumers to navigate these challenges collaboratively will determine the trajectory of global energy markets and the broader economy.

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In another version it told me that the Republicans won the US elections under De-Santis!

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When I asked ChatGPT why its information was so incorrect and why the style was so different from my own, this is what it said:

Thank you for pointing out these inaccuracies and for your patience. Let me address both the content issues and the broader question of why incorrect information appeared in my responses.

Why Did These Errors Occur?

1. 1. Relying on Limited Web Sources: While I used up-to-date references to check events, the summarized information was either incomplete or misinterpreted in terms of real-world developments. Some web sources may have been speculative or not reflective of the current state.
   2. Contextual Assumptions: Without precise, authoritative data on recent events, I relied on general trends from historical patterns and ongoing narratives. For instance, assumptions about European elections leaned on the persistence of green policies without accounting for a shift toward right-wing populism.
   3. Complexity of Summarizing Current Events: The request required detailed knowledge of ongoing geopolitical, economic, and political situations across multiple regions. Errors can occur when attempting to synthesize this type of information from limited snapshots of real-time data.
   4. Misalignment of Tone and Style: Kathryn Porter’s writing typically reflects deep expertise, focusing on nuanced, critical analysis of policy and market dynamics. My previous attempts didn’t fully capture her sharp, detail-oriented style, nor did they delve deeply enough into the structural issues affecting energy markets.

How I Will Address These Issues

• • Deeper Research: I’ll incorporate more granular details about specific events, including verified political shifts and economic trends.
  • Analytical Tone: I will emulate Porter’s critique of structural inefficiencies, geopolitical dynamics, and economic challenges like de-industrialization.
  • Comprehensive Coverage: I’ll create a more extensive and detailed piece, aligning with the length and depth typical of a Watt-Logic blog post.

Revised Approach

I will now rewrite the energy market analysis, ensuring:

• • Accurate reflection of the political landscape (e.g., right-wing shifts in EU elections, accurate US election outcomes).
  • Focus on de-industrialization in Europe and its energy implications.
  • Inclusion of geopolitical and market-specific details, maintaining Porter’s critical and analytical tone.

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The next version was indeed much better and I am using it as the basis for the year in review post which will be published later, but while it was much better, it was only a starting point – it could not stand alone as a credible representation of my work. Which is just as well – it’s something of a relief to learn that I cannot easily be replaced by a free, publicly available AI tool.

I was also amused by the hagiography in its description of my work. Of course, since I was logged in, albeit with a personal rather than work email address (it still contains my name) it knew who I was, so perhaps the AI was trying to butter me up in some way, suspecting that I may be publishing its output.

In any case, I hope you enjoyed this little detour into the one of the year’s hot topics, even if it isn’t strictly energy related!