The electricity demand from ‘AI-optimised’ data centres is projected to more than quadruple by the end of the decade.
Electricity demand from data centres is set to more than double from 415TWh in 2024 to 945TWh by 2030 – and artificial intelligence (AI) is the primary driver, according to the International Energy Agency (IEA) in its ‘Energy and AI’ report.
The comprehensive report finds that AI will be the most significant driver of this surge, with electricity demand from “AI-optimised” data centres projected to more than quadruple by the end of the decade.
Data centres in the US will account for nearly half of the growth in electricity demand in the country between 2025 and 2030, the IEA reports.
Estimates from 2023 suggest that the US is the second highest energy consumer, using more than 4,000TWh of electricity annually. This however, is leagues behind that of the top consumer, China, which sits at more than 8,300TWh a year.
The US government places significant emphasis on the growth of the AI sector. Earlier this year, president Donald Trump announced a private sector funding of $500bn into OpenAI’s infrastructure, which is said to “secure American leadership in AI”.
More recently, AI-usage has been promoted and encouraged within government departments.
“Driven by AI use, the US economy is set to consume more electricity in 2030 for processing data than for manufacturing all energy-intensive goods combined, including aluminium, steel, cement and chemicals,” the IEA writes.
While data centres in advanced economies – which includes much of the Global North – are expected to drive more than 20pc of the growth in electricity demand between now and 2030.
This development sets some of these countries back on a track for higher energy demand after years of being in stagnation or decline, the report says.
A 2024 Central Statistics Office report showed that data centres accounted for more than a fifth of Ireland’s electricity consumption at 21pc, overtaking urban dwellings, which consumed 18pc of the total electricity used in 2023.
“AI is one of the biggest stories in the energy world today – but until now, policymakers and markets lacked the tools to fully understand the wide-ranging impacts,” said IEA executive director Fatih Birol.
“Global electricity demand from data centres is set to more than double over the next five years, consuming as much electricity by 2030 as the whole of Japan does today. The effects will be particularly strong in some countries.
“For example, in the United States, data centres are on course to account for almost half of the growth in electricity demand – in Japan, more than half and in Malaysia, as much as one-fifth.”
Innovation is the silver lining
Generative AI represents a technological milestone. And along with it comes both heightened security concerns as well as innovative opportunities, which could very well offset some concerns.
Cyberattacks on energy utilities have tripled over the last four years, as well as proving to be more sophisticated than before. The IEA points to AI as the cause.
At the same time, it has become a critical tool for businesses trying to defend itself against such attacks.
While the increase in electricity demand for data centres led by AI will drive up emissions, this will be small in the context of the overall energy sector, the report finds.
Moreover, AI could accelerate innovations in the energy industry, as the technology continues to become integral to scientific discoveries. This could lead to advancements in energy tech such as batteries and solar.
“With the rise of AI, the energy sector is at the forefront of one of the most important technological revolutions of our time,” Birol said.
“AI is a tool, potentially an incredibly powerful one, but it is up to us – our societies, governments and companies – how we use it.”
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