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In Energy News Beat – Conversation in Energy, the host Stuart Turley and IBM’s energy leaders, Caroline Roche and Ken Saunders, explore how AI and hybrid cloud technologies are revolutionizing the energy industry. They discuss innovative grid modernization strategies—from microgrids and digital twin simulations to proactive maintenance and energy trading—highlighting how these technologies help utilities manage rising demand and operational challenges while integrating diverse energy sources like renewables, natural gas, and nuclear power.
Thank you, Caroline, for stopping by the Energy News Beat podcast. I had an absolute blast. The United States needs energy leaders like you and IBM to help us get to the next level of energy security.
Please connect with Caroline on her LinkedIn here: https://www.linkedin.com/in/caroline-roche/
Don’t hesitate to get in touch with Ken on his LinkedIn here: https://www.linkedin.com/in/saundersken/
Highlights of the Podcast
00:00 – Intro
02:04 – IBM’s Energy Solutions & Grid Modernization
04:00 – Grid Management Challenges & Integration
06:03 – Microgrids, Energy Trading & Load Growth
08:10 – Infrastructure Safety & Resilience
11:34 – Modernization Investments & Simulation Technologies
15:06 – Nuclear Energy Challenges & Hybrid Generation Strategy
18:08 – Global Energy Policy, Tariffs & Export Opportunities
21:11 – Operational Excellence & AI-Driven Maintenance
27:13 – Conclusion & Contact Information
Sturt Turley – President and CEO of Sandstone Group [00:00:07] Hello, everybody. Welcome to the Energy Newsbeat podcast. My name is Stu Turley, president of the Sandstone Group. Today is an outstandingly wonderful day. We’ve got a fantastic lineup for you. We are talking about not only energy as it applies to the United States. We’re talking about global energy, global AI, and how AI can really impact and solve solutions. But I’ve got guests from IBM here today. I’ve Got Caroline Roche, and she is here with IBM as a IBM industry leader. Welcome. Thank you for stopping.
Caroline Roche – Energy Industry Leader IBM [00:00:44] Thank you. It’s great to be here. Thank you for having me.
Sturt Turley – President and CEO of Sandstone Group [00:00:46] And you were so cute when you’re over there, you’re going, is he going to get my name right? I was like this close to messing up. Thank you very much for stopping by.
Caroline Roche – Energy Industry Leader IBM [00:00:56] Yeah, for sure. It’s awesome to be here today with you in Dallas.
Sturt Turley – President and CEO of Sandstone Group [00:00:59] And also we’ve got Ken Saunders. Ken, welcome. Thank you very much. Thanks for having us. And you’re not from these parts, are you? No, I brought the Bruce Jackson to come and give you some energy from over abroad. And you know, I just got word from the studio that we are not going to impound or put another 25% Trump tariff on this podcast. Yay. Thank you so much. But we’re gonna have a great discussion because you’re out of the UK And you’re out of Washington DC with IBM and IBM’s got some great things coming around this corner and the United States grid is in some serious. issues. We’ve got a great Secretary of Energy and Secretary Chris Wright with everything else. Drill Baby Drill is not going to solve all of our problems because it’s going to be Drill baby when fiscally responsible, but yet how do we get to where we’re going and we want to kind of open it up and if you guys, if you could give us what you’re doing at IBM right now in the energy space that would be a great start.
Caroline Roche – Energy Industry Leader IBM [00:02:04] Sure, would love to. So, as you mentioned, I lead the energy industry for IBM Consulting. We do a lot of work with large utilities, our oil and gas clients, as well as chemicals companies. And so one of the things that’s so interesting is that there’s so much convergence across the industry with oil and gas companies drilling, but also looking at other sources of hydrogen or sustainable energy, and utility companies also doing the same. So we’re seeing a lot of that across the industry, and a lot of need to balance OPEX costs and invest in technology to support operations. IBM as a corporation is very focused on AI and hybrid cloud as ways to drive that transformation. And so I think we’re seeing a lot of, it’s a very exciting time in the energy industry because a lot of what we’ve been focused on from a technology perspective is really driving the transformation of the energy industry as you look at AI and cloud technologies and data centers driving energy load growth. So very exciting from that perspective.
Sturt Turley – President and CEO of Sandstone Group [00:03:18] You know, IBM has always been a wonderful company. In fact, I got my start going from a typewriter company selling Selectrix and IBM typewriters to IBM Token Ring, and really getting back into the IBM XT-80 days and everything else, and then going on to Intel and everything. But when we take a look at the grid, how are you going out and taking a look at we have wind, solar, call, you have all this stuff. Grid management for the utilities and IBM, what are the solutions there? Because that is how do you take disparate systems and make them talk together? This is a huge issue.
Caroline Roche – Energy Industry Leader IBM [00:04:01] Well, and I think kind of taking a step back and setting the stage, I think one of the things that’s so exciting is if you look at the CAGR for electric consumption, from 1975 to 2005, it was 2.5%. From 2005 to 2023, the CAgr was 0.15%. And the forecasted CAGR from 2023 to 2038 is between 6% and 15%. So as we talk about load growth, I think, from my perspective, those numbers really put into context the going from basically 0% load growth to up to 15% load growth. And this is researched by EPRI is we’re in a moment of dramatic transformation. So how are energy companies going to meet that need? Well, there’s a ton of construction. and new connections that need to be made while also managing the grid that they have today. And so that’s gonna require utilities to look at managing their resources differently. And I think that that’s where I get very excited about the promise of AI automation technology platforms to help them maintain what they have today while focusing their assets on this tremendous growth an investment in the grid that’s needed to be able to meet this demand growth.
Sturt Turley – President and CEO of Sandstone Group [00:05:26] You know, when you take a look at the growth, I love that, by the way, that is really cool. And you sit back and look at like, let’s take Stargate and Abilene, they’ve put in a natural gas power plant there in order to power that AI data center, but it would be powerful enough to do 90,000 homes on its own, but yet it’s not gonna be attached to the grid. So we’re seeing a micro grid. Uh, popping in and I’m seeing that that’s going to be, it’s almost going to be grid segregation into those that have it and those that don’t.
Caroline Roche – Energy Industry Leader IBM [00:06:04] Totally, you know, honestly, I think one of the things that’s really interesting right now is we’ve been talking about microgrids, we’ve been talking about the term prosumer, producers and consumers of energy. For a long time, for a while, it felt like these were ideas that would never come from a reality perspective. And I think actually, interestingly, technology has finally caught up with these things that we thought we were going to have. the ability to have on-site generation, whether that’s solar or wind or natural gas facilities powering specific assets, but then the need to balance between producing your own energy and consuming. Interestingly, we’re seeing a lot of energy companies really investing in energy trading because they have to make the decisions on is today a day where it’s cheaper to buy energy from the grid or is today that I need to be producing my own energy because of the price of energy. So I think that that’s where, again, I think technology is gonna really enable this because you’re gonna be able to make quicker and more real-time decisions based on weather conditions, based on price of, energy based on where your crews are and how do you do maintenance more effectively based on all of those things. So I that’s. a very exciting moment where, again, technology is kind of caught up with a lot of these concepts we’ve been talking about for a long time.
Sturt Turley – President and CEO of Sandstone Group [00:07:32] You bring up a great point. I mean, this is cool. And you sit back and sorry about this, this next part of the conversation, but Heathrow Airport last week, holy smokes, Batman, that brought up a gigantic switching issue. And then when it came out that the backup grid caught fire because it was biofuel because they were trying to be net zero compliant in the UK. Sorry about the UK today, but you know, when you take a look, IBM could really solve that problem through automatic switching and really figuring out that problem. I think we got you a new customer. Totally.
Ken Saunders – Global External Relations – Industries IBM [00:08:10] I think that also comes back to the governance of the energy supply and also the critical national infrastructure and people taking a hard look at what’s there to back up things. Have people looked at it and gone, is there going to be a fire in the substation or what’s the fall over on that? How do you get it back up and running really quickly? When was it last tested? I mean, but people can be relying on data, and all of this comes back to… data inputs and looking at that data and applying AI, for example, and get at those insights, but also looking at plans and going, have we actually tested them in the last few months? And we actually broken it intentionally to test it. Yeah, let’s see what happens.
Caroline Roche – Energy Industry Leader IBM [00:08:56] One of the things, so IBM has an Institute of Business Value. It’s a top rated research capability within IBM that does research on technology and business value. And we’re here in Dallas at Distribute Tech today and we’re launching a study around grid modernization for electrification. And there are a couple things that really like jumped out to me from the study. All utilities report that they’re investing in grid modernization. Interestingly, on average, utilities are investing 9.6% of their revenue in grid modernization right now. This is a ubiquitous time to be investing in this space. we’re really seeing only 14% of utilities as advanced in how they simulate a grid performance and doing things like digital twin and scenario modeling. And I think that this is one area, again, where I get very excited. Generative AI is the buzzword these days. And there are a lot of different categories of generative AI. I think what most of us think about when we think about generative of AI is chat GPT and chat bot. There are other parts of this that are called foundation models. And I think one of the things that’s very cool with foundation models is the ability to run more simulations. And so as we look at these, what we call pioneering integrators, people who are investing in grid modernization, and really at the forefront of it, they’re simulating grid performance. They’re doing scenario planning on storms, you know, one utility we’re working with Run’s model that allows them to simulate wind damage on their poles and identify which poles will fail in a storm. what that allows them to do is to place their crews differently during the storm, but then also do scenario planning as they’re doing normal operations on pole maintenance using data based on the age of the pole, the wind speed, the location to help have a more resilient grid. And I think that that’s where, again, those pioneering integrators have been able to reduce outage times from like sometimes hurricanes used to take two to three weeks of outage to rebuild the grid to now, some of them are doing three to four days. So really seeing this investment in technology driving really improved operational outcomes.
Sturt Turley – President and CEO of Sandstone Group [00:11:35] I’m sitting here thinking like a Governor DeSantis, when you see him line up and you see a storm or a hurricane coming in, I could see him really needing and having the grids in Florida needing your technology to have simulations and dry runs for those states that actually have leaders that will line up the trucks ahead of time. How did they get the data to figure out how many minemen and how many trucks? and how many things ahead of time, there’s a lot of data that you could be saving lives ahead of times. Totally. I didn’t mean to sound like a commercial for IBM, but I’m over here thinking, this is important.
Caroline Roche – Energy Industry Leader IBM [00:12:20] Well, and so I think what we’re seeing as an investment perspective, I think people, the data is important, but then there’s the kind of core technology platforms underpinning that, that run the work and asset management function that run, the outage management function that do the mapping. And so there’s a huge challenge in terms of how do you drive more integration across those technologies? Not all of them are IBM technologies. We love working with our partners. at from across the energy industry, but really investing in consolidating processes across platforms into a more cohesive technology stack, enabling it. investing in data, and then looking at opportunities for AI and automation. And so I think that that’s where, again, we see those pioneering integrators really driving that. And I was talking about storms. I think another big area that there’s opportunity for this is in wildfire prevention and response. So really, I think all types of extreme weather and looking at how do you better prepare, plan, and respond to those events.
Sturt Turley – President and CEO of Sandstone Group [00:13:28] Oh, that is so cool. When we sit back and take a look at our growth patterns and where we’re going, I’ve been trying to rip apart the budgets for new plants online that have been approved, the demand in different parts of the country, and I’m taking all the different things, and I found that Texas ERCOT is okay for the next three years, and they’ve done a great job. They’ve got several billion dollars assigned to natural gas power plants. But, and I’m throwing this out. We haven’t talked about this ahead of time. So I’m not trying to throw a curve ball. I’m really wanting to know. And that is, I’m seeing that we do not have a way forward with nuclear. I love nuclear. I’m an oil and gas executive that has signed the oil and gas executives for nuclear group. And we love nuclear, but it takes so many years. Like the last one was the UAE. They did four and a half years, they came in on budget. The United States, 20 years. Georgia, I believe they just put theirs in. Great job, but it was 20 years to get done. We’ve got 92 ballpark reactors in there. We need more. And so I see some real problems coming because of supply chain in natural gas. and coal, if we try to turn on our coal plants again, we don’t have the turbines. And we’re now sold out through 2028. You match that number to new growth. I’m like, how does IBM help solve that problem?
Caroline Roche – Energy Industry Leader IBM [00:15:06] Well, I think I would say I don’t anticipate… I don’t anticipate that there’s going to be a one size fits all strategy in terms of generation. And so nuclear will not be the perfect answer, it will be part of the solution. In the time that it will take to stand up nuclear, we’re going to need to be looking at other types of generation and interestingly, I think some of the leading utilities are about the cost and time to stand up some of the you know wind or solar or whatever is a lot faster a lot cheaper and so I think you’ll see some of those technologies augmenting some of that perhaps longer term solutions like nuclear but I think that that’s where we’re seeing a resurgence and you were mentioning natural gas I think your we’re saying a resurgents and natural gas where you know electrification was the topic but I will play a complement in terms of driving the generation. from that perspective, so. almost like IBM placed the bet on hybrid cloud being a thing and that there would always be some on-premise loads and then people would be using multiple clouds, Amazon, Microsoft, Google, and others. I think it’s kind of similar. It’s gonna be a hybrid generation strategy of really looking at how do you use a blend, and then also do long-term planning with things like nuclear and building new facilities and some kind of maybe quicker, shorter term things that can help augment that load and demand in the short term.
Sturt Turley – President and CEO of Sandstone Group [00:16:39] You know what’s fun is when we sit here and when we talk about energy, I get excited. Even though I went to Oklahoma State University, I go Cowboys, especially when we’re wrestling. But now I’ve become Italian because I get excited about talking about the great things that energy, low cost energy does for humanity.
Caroline Roche – Energy Industry Leader IBM [00:17:01] Yeah, you know, actually Sam Altman, who is the founder of OpenAI, he has a quote that he believes that the cost of energy and technology are gonna be the barrier or enabler of human growth. Yep. But. when you really think about that I think so much as you think about the market and and the growth companies you know energy isn’t necessarily always part of that and so you think about it’s not just technology it’s the cost of energy enabling that technology is really what will drive human progress and I think that that again much of like when I joined IBM out of college I IBM has changed a lot and it’s made it a really fun and interesting place to work but You know, many years ago, we were talking about micro grids and prosumers and all these things. And we had until now, we really hadn’t seen that take hold. And so it’s such an exciting time because I think many of these concepts that we’ve been thinking about for a long time are here. And that’s the exciting time why it is exciting to be in this industry for sure.
Sturt Turley – President and CEO of Sandstone Group [00:18:08] It is, and I think that as the United States and President Trump, I got to hand it to President Trump. And if you’re listening to this podcast, President Trump you’re always welcome. But we sit back and look at the tariffs that he is looking at doing. And when you realize his actions… are not matching up to what he’s talking about, and tariffs are actually the carrot to get them to the table, they’re not going to be that bad. When he backed off and he said, oh, by the way, we’re only going to do reciprocal tariffs, all of a sudden that changed the whole thing. Everybody started, you mean they tariff us? Is what I heard down here at the 7-Eleven. We get tariffed on our stuff from Canada. Yes, we get tarifed on all of our stuff, but what’s that going to do for energy as an export? I think the United States could be a great energy exporter of technology. And this came about with the discussion of a possibly President Trump taking control of the Russian nuclear facility in Ukraine. and having us do that, think about this as a business model. This would be absolutely huge for us to control a grid and sell that at IBM as a service, as a United States export to offset tariffs. This is a huge discussion as you go start looking at management as an export service.
Caroline Roche – Energy Industry Leader IBM [00:19:44] You know, and we’re, we, uh, we are, yeah, totally. We are a multinational company that operates around the world. Um, and so. Obviously, providing support throughout the world is a core part of our business model. And so I think that there’s a lot of opportunity here. But I think really it comes back to how are we going to enable human progress? And so aside from the geopolitical issues of which there are many, I think it really comes back too enabling human progress and thinking about how energy enables that and really the haves and have nots of, there are still billions of people in the world who don’t have access to energy and what energy enables people to do in terms of advancing society and creating a better life for themselves and their families. And so I think that that’s really kind of the core foundation of. what’s exciting from that perspective.
Sturt Turley – President and CEO of Sandstone Group [00:20:42] Outstanding. Well, what do you see Caroline coming around the corner for you and your group, right?
Caroline Roche – Energy Industry Leader IBM [00:20:48] So I think we’re seeing a ton of investment in this space. Again, I mentioned the average utilities investing about 10% of their revenue in this grid technology from a utilities perspective. And so I started to mention this a little bit earlier, but I think right now the current investment is around platform consolidation, looking at how do you invest to drive resilience.
Sturt Turley – President and CEO of Sandstone Group [00:21:12] Invest to drive resilience.
Caroline Roche – Energy Industry Leader IBM [00:21:14] Yeah. And so that’s looking at things like predictive AI, VAR optimization, looking at their advanced distribution management systems and switching, you mentioned earlier, fault detection. So we’re seeing utilities investing in their core platforms, making it easier to have data consolidated and make informed decisions with that data. I think that that really goes to accelerating that hybrid generation transition of being able to not only have better sources of generation, but work with their customers who are generating their own power and managing that from a distributed energy resources perspective. And then I think the third piece that we’re really seeing right now is investing in operational excellence. So I think honestly, the grid and the field management is a place where the the end users are really doing a lot of work with their hands. And so not necessarily, you know, the. always wanting to use technology as they’re climbing poles, et cetera, but I think a lot of opportunity in terms of how do you better use data, how do better route crews, how do you be more effective, you know, climbing a wind turbine really exposes you to weather. And so how do make sure that there’s safety underpinned and leveraging that. So really looking at operational excellence. But what really gets me the most excited is the promise of what technology holds in terms of some of the big rocks that are out there that have been a little bit unsolvable. And I mentioned weather. I think that there is a lot of great weather modeling now. But I think with foundation models, the ability to run more scenarios from a weather, do more longer term weather forecasting, do more location-specific weather forecasting. IBM research is working on some of these challenges with NASA and other industry partners. And so I think. Like these three things, investing in resilience, accelerating the transition and operational excellence, I think are going to really lay the foundation that allows these companies to invest in things like what they’re doing, foundation models for asset management, foundation models for weather. And so I think that that’s really the promise on the horizon. That’s very exciting in terms of, again, solving some of these big rocks that we haven’t been able to solve before with technology.
Sturt Turley – President and CEO of Sandstone Group [00:23:51] You know, one of the things that I enjoy most about podcasting is a meeting people, but it’s also meeting people that are excited and you can truly see for our podcast listeners, Caroline’s eyes light up and she believes in her mission. And so honestly, you are believing in your mission. And that to me is about as cool as it gets. So I’m, I’m very excited about everything that you’ve got going on there. So what do you see coming around the corner?
Ken Saunders – Global External Relations – Industries IBM [00:24:20] Well, I think from my point of view, a lot of things around how job roles are going to change for people in the utilities. So there might be somebody doing maintenance crew, for example, who’s looking at a transformer or whatever it might be. But actually, how is AI going to help them do their job better? So visual inspection with AI, for examples, Maximo technology, that’s going to change how they perform and do things more efficiently, more smartly. So it takes some of the dull way, but allows them to free up and start thinking about other things and doing it in a better way.
Caroline Roche – Energy Industry Leader IBM [00:24:59] Let me give you an example of that that I think is interesting. Right now, many utilities in the U.S. have invested in drone technology to take video footage of their assets. But right now, the which even that, you know, 10 years ago was, you know very futuristic. But I think. Right now, the barrier to using that data is someone looking at the drone footage and then creating a work order because they’ve seen something wrong. I think the promise of technology is also augmenting some of that with AI of having the AI be able to review the image, see something’s wrong. and then create the work order for the crew to go out there. So I think that they’re- All bonkers. Yeah. That’s cool. Yeah, so I think that that’s one example of like the limit then becomes not a human limit of the time that it takes to review a picture and then the work-order and go. The limit becomes now getting crews out there which is a different challenge but I think the ability to identify problems faster and get crews to solve those issues in a more proactive way is a very, and again, this is all things we can do now with some of the AI. I think it requires confidence in the AI and training the AI to make sure that it’s. creating work orders accurately, so you aren’t spending a lot of money on non-issues, but I think that that’s one of the things that’s very exciting in terms of how roles will change.
Sturt Turley – President and CEO of Sandstone Group [00:26:35] That’s what a great point you guys this is great. I’ll tell you
Ken Saunders – Global External Relations – Industries IBM [00:26:39] kind of fun. How do people get a hold of you? So I go into ibm.com and there’s multiple ways of contacting us that way but also you know reach out to Caroline and lead on LinkedIn.
Caroline Roche – Energy Industry Leader IBM [00:26:50] Yeah, LinkedIn, yeah.
Sturt Turley – President and CEO of Sandstone Group [00:26:51] Okay. And that’s fantastic. So, well, with that, thank you all very much for stopping by the Energy Newsbeat podcast. My name’s Stu Turley, president CEO of the Sandstone Group. And I’ll tell you what, I had an absolute blast today. Thank you guys. And, I hope to have you back again. If you guys have another announcement or you want something out there, we want to get your story out there.
Caroline Roche – Energy Industry Leader IBM [00:27:13] Us too, and thank you so much for having us. All right.
Sturt Turley – President and CEO of Sandstone Group [00:27:15] All right. Thanks, guys.
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