These four graphs encapsulate the current status of AI and energy.
A new report from the International Energy Agency explores the intersection of energy and AI, providing data that clarifies key trends. Here are four charts from the report that highlight essential insights regarding AI and energy demand.
1. AI is power hungry, and the world will need to enhance electricity supply to meet this demand.
This point cannot be overstated: AI is rapidly expanding, leading to increased energy demand from data centers. According to the IEA report’s executive summary, “AI has gone from an academic pursuit to an industry with trillions of dollars at stake.” Data centers consumed less than 300 terawatt-hours of electricity in 2020, but this number could surge to nearly 1,000 terawatt-hours within the next five years, which surpasses Japan’s current total electricity consumption. Currently, the US holds about 45% of the global data center capacity, with China following closely behind. These two nations are expected to dominate the majority of capacity through 2035.
2. The electricity required to power data centers will primarily be sourced from fossil fuels like coal and natural gas in the short term, but nuclear and renewable energy sources could become increasingly important after 2030.
The IEA report expresses optimism regarding the potential for renewables to supply energy for data centers, forecasting that nearly half of global growth by 2035 will be met with renewables such as wind and solar. In Europe, the IEA anticipates that renewables will satisfy 85% of new demand. However, in the near term, natural gas and coal will still play significant roles, with an additional 175 terawatt-hours from gas projected to meet demand over the next decade, primarily in the US. Other analyses indicate that fossil fuels may contribute even more than the IEA estimates, potentially accounting for two-thirds of additional electricity generation by 2035. Nuclear energy, favored by major tech firms aiming to power operations with minimal emissions, could begin to see a shift in usage after 2030, based on the IEA’s findings.
3. Data centers represent only a small fraction of the anticipated electricity demand growth this decade.
When discussing energy consumption, it’s important to consider appliances, industry, and electric vehicles (EVs) as well. Overall electricity demand is rising from a variety of sources: Electric vehicles, air conditioning, and appliances are predicted to drive more electricity demand than data centers through the end of the decade. In total, data centers are projected to account for just over 8% of the anticipated electricity demand between now and 2030.
