Electricity Demands of AI Data Centers to Double by 2030: IEA Report

A new report from the International Energy Agency (IEA) says there will be a steep rise in the electricity needed to power AI data processing, which will use more power in the United States by 2030 than the manufacturing of all other energy-intensive goods, including cement, aluminum, steel and chemicals.

In the world’s advanced economies, data centers are predicted to drive over 20 percent of the increase in electricity demand through the end of the decade.

To meet the rise in electricity needed to power these data centers, a wide array of energy sources will be needed, the report said. Renewable energy, along with natural gas, will be the biggest sources due to their availability and cost-competitiveness in key markets.

“AI is one of the biggest stories in the energy world today – but until now, policy makers and markets lacked the tools to fully understand the wide-ranging impacts,” said IEA Executive Director Dr. Fatih Birol in a press release from IEA. “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.”

The IEA report pointed out that questions remain about how productive and capable AI will become and how quickly efficiency improvements will happen, saying it could intensify some strains on energy security while helping address others.

“Cyberattacks on energy utilities have tripled in the past four years and become more sophisticated because of AI. At the same time, AI is becoming a critical tool for energy companies to defend against such attacks,” the press release said.

Increased energy demand for data centers will drive up emissions, but the report said the increase would be small relative to the energy sector as a whole. It also underscored the potential for AI to enable emissions reductions if the technology is widespread.

The report found that AI could speed up innovations in energy technologies like solar PV and batteries as it becomes more integral to scientific discovery.

“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. The IEA will continue to provide the data, analysis and forums for dialogue to help policy makers and other stakeholders navigate the path ahead as the energy sector shapes the future of AI – and AI shapes the future of energy.”

The report said countries must quickly accelerate their investments in electricity grids and generation; improve the flexibility and efficiency of data centers; and make the dialogue between the tech sector, energy industry and policymakers stronger in order to benefit from AI’s potential.

The beneficial uses of AI could offset some of its massive energy demands, but the report found that greater direction from governments is likely to be needed to make that happen, reported The Guardian. Left to its own devices, AI’s rapid growth could post serious issues for energy systems globally, as well as for the environment.

AI’s rapid growth means companies will seek out energy sources that are most readily available, which could mean gas — an energy source that was being phased out in a growing number of developed countries. Coal could even be used to meet the demand for energy to feed AI’s massive data centers in the U.S., aided by President Donald Trump’s support for resurrection of the dirty fuel.

Claude Turmes, Luxembourg’s energy minister, said the IEA’s picture of the future of AI was far too optimistic.

“Instead of making practical recommendations to governments on how to regulate and thus minimise the huge negative impact of AI and new mega datacentres on the energy system, the IEA and its [chief] Fatih Birol are making a welcome gift to the new Trump administration and the tech companies which sponsored this new US government,” Turmes said, as The Guardian reported.