Understanding AI in the energy sector: the benefits, the risks and rights

This joint blog from Ofgem and the Energy Ombudsman explains how artificial intelligence (AI) is increasingly used across the energy sector in Great Britain and what it means for consumers.

1. How AI is being used in the energy sector

AI is already shaping how energy companies operate and how customers experience energy services:

• Smart meters use AI to track energy usage and help tailor tariffs and billing.
• Customer service is increasingly supported by chatbots, automated email systems, and virtual assistants.
• System management: AI helps energy companies analyse large datasets, balance supply and demand, predict faults, and run networks more efficiently.

2. Benefits for consumers

AI can:

• Improve service efficiency and reliability
• Provide more personalised plans
• Detect issues early across the energy system
• Support customers who may need extra help by identifying signs of vulnerability

3. Risks and challenges

Ofgem highlights several risks if AI is not used responsibly:

• Bias and unfair outcomes if AI systems are trained on incomplete or skewed data
• Digital exclusion for people unable or unwilling to use digital tools
• Lack of transparency, e.g., consumers not realising they are interacting with AI

4. What Ofgem expects from energy companies

Ofgem requires that energy companies:

• Use AI fairly, transparently, and responsibly
• Protect consumers, especially vulnerable groups
• Ensure AI-driven decisions do not unfairly impact customers
• Provide clear routes for dispute resolution (supported by the Energy Ombudsman)