AI to predict the future of energy
Deloitte and SGN’s Future Horizons AI platform
Navigating the UK’s energy transition towards net-zero is a complex challenge, requiring a careful balance between affordability, accessibility and sustainability.
For those of us who use gas to heat our homes – that’s 23 million gas boiler owners across the country – decisions about how and when to lower our heating-related carbon footprint will be shaped by a range of factors, from cost and convenience to government policy and technological advancements.
British company SGN, which manages the underground gas pipes serving almost six million homes and businesses in the south of England and across Scotland, has taken a proactive approach to understanding its customers’ possible trajectories.
To support customers through the energy transition, while maintaining a commercially viable network, SGN and Deloitte co-created Future Horizons AI.
Capable of modelling and predicting the road ahead, it’s a sophisticated AI-powered cloud-based platform that enables SGN to shift its focus further towards customer needs.
Understanding more about when customers are likely to transition their energy supply gives SGN the intelligence to make informed decisions about how best to invest in its network.
A balanced energy transition
The UK is committed to phasing out fossil fuels, but the transition is far from straightforward.
Every home and business will follow its own unique low-carbon pathway, and while electrification is a key focus, the alternatives are not yet fully accessible or affordable for all.
In this context, piped natural gas – cleaner than many other fossil fuels – is expected to play a role in the UK’s energy mix in the years leading to 2050.
A diverse range of factors, including affordability and accessibility, will influence the transition plans of people all over the UK.
With an asset value of £7 billion, SGN’s network is 74 kilometres long and moves 130Twh (terawatt-hours) of energy each year. That’s just under a fifth of the natural gas consumed by the UK (based on consumption figures from 2024).
Already making a significant investment in its network, replacing cast iron pipes with modern PE (polyethylene) upgrades, the platform is enabling SGN to place a fuller understanding of customer transition journeys at the centre of a strategic balancing act for its business.
On one hand, the company is committed to continuing ongoing maintenance of its pipe-network infrastructure. On the other, it wants to support an affordable energy for customers, which means it must carefully consider investment in its network.
A simulation platform in the cloud, Future Horizons AI is capable of visualising how the energy network might evolve under different transition scenarios.
Visualising the network
With no existing detailed insight available on the future energy transition, building a deep understanding posed a significant challenge.
Bringing together SGN’s expertise with Deloitte’s future of energy team – spanning strategy, econometric modelling, analytics, AI and cloud engineering – we collaborated on a solution. Together, we approached the challenge from a new perspective: street level.
“Our approach was to use AI and simulation together with SGN’s data about its network and apply it to the decisions consumers and business owners have to make about their energy needs,” explains Deloitte partner Matthew Guest.
“We asked ourselves: what if we could use this to model and predict the energy transition pathways of SGN’s six million customers?”
The team combined data from various sources, including SGN’s customer and pipe data, property factors and proprietary survey data from Deloitte. By applying advanced modelling techniques, they created a simulation platform in the cloud, Future Horizons AI, capable of visualising how the network might evolve under different transition scenarios.
“The simulation considers factors including installation and running costs, available space and local environmental conditions, and it meticulously models the uptake of low-carbon technology at a granular property level,” Matthew adds.
“By integrating agentic AI, SGN can perform complex calculations about its assets and apply scenario planning capabilities. This enables SGN’s people to model what-if scenarios stretching up to 2050.”
Customer behaviour insight
Today, Future Horizons AI has positioned SGN as a leader in the energy transition, actively contributing to energy security and net-zero ambitions.
Providing unprecedented insights into customer behaviour, the platform has supported a shift at SGN, towards individual customer connections within its wider pipe-network asset. And comparing the data from the model with consumer surveys has shown the insights to be reliable.
Now able to model and predict optimal future network structures, SGN can strategically balance shareholder returns with the uncertainties of a shifting policy environment, supporting long-term resilience and adaptability.
By modelling how every home and business on its network is likely to transition under different scenarios, the tool provides a robust foundation for discussions with regulator OFGEM about where best to allocate resources for maintaining a critical national asset.
Through this innovative solution, SGN has emerged as a pioneer in the gas distribution sector’s response to energy security and climate change, actively shaping the future.
Get in touch
Bharath Krishnan
Director
+44 (0)20 7007 0885
bharathkrishnan@deloitte.co.uk
"By integrating agentic AI, SGN can perform complex calculations about its assets and apply scenario planning capabilities. This enables SGN’s people to model ‘what-if’ scenarios stretching up to 2050.”
Matthew Guest, Partner, Deloitte.
