A new report from the International Energy Agency digs into the details of energy and AI, and I think it’s worth looking at some of the data to help clear things up. Here are four charts from the report that sum up the crucial points about AI and energy demand.
1. AI is power hungry, and the world will need to ramp up electricity supply to meet demand.
This point is the most obvious, but it bears repeating: AI is exploding, and it’s going to lead to higher energy demand from data centers. “AI has gone from an academic pursuit to an industry with trillions of dollars at stake,” as the IEA report’s executive summary puts it.
Data centers used less than 300 terawatt-hours of electricity in 2020. That could increase to nearly 1,000 terawatt-hours in the next five years, which is more than Japan’s total electricity consumption today.
Today, the US has about 45% of the world’s data center capacity, followed by China. Those two countries will continue to represent the overwhelming majority of capacity through 2035.
2. The electricity needed to power data centers will largely come from fossil fuels like coal and natural gas in the near term, but nuclear and renewables could play a key role, especially after 2030.
The IEA report is relatively optimistic on the potential for renewables to power data centers, projecting that nearly half of global growth by 2035 will be met with renewables like wind and solar. (In Europe, the IEA projects, renewables will meet 85% of new demand.)
In the near term, though, natural gas and coal will also expand. An additional 175 terawatt-hours from gas will help meet demand in the next decade, largely in the US, according to the IEA’s projections. Another report, published this week by the energy consultancy BloombergNEF, suggests that fossil fuels will play an even larger role than the IEA projects, accounting for two-thirds of additional electricity generation between now and 2035.
Nuclear energy, a favorite of big tech companies looking to power operations without generating massive emissions, could start to make a dent after 2030, according to the IEA data.
3. Data centers are just a small piece of expected electricity demand growth this decade.
We should be talking more about appliances, industry, and EVs when we talk about energy! Electricity demand is on the rise from a whole host of sources: Electric vehicles, air-conditioning, and appliances will each drive more electricity demand than data centers between now and the end of the decade. In total, data centers make up a little over 8% of electricity demand expected between now and 2030.
