The surge in demand for artificial intelligence (AI) is driving an unprecedented growth in data centers, which are significant power consumers. According to the International Energy Agency (IEA), global electricity demand from data centers is expected to more than double by 2030, reaching around 945 terawatt-hours (TWh), roughly equivalent to Japan's current electricity consumption.
AI will be the primary driver of this increase, with electricity demand from AI-optimized data centers projected to quadruple during the same period. The United States is expected to be the fastest-growing market for data centers, with demand increasing from 25 GW in 2024 to over 80 GW by 2030.
Data centers can draw power around the clock, with some variation, and their power needs are expected to grow to about three times higher than current capacity by the end of the decade. Renewables and natural gas are set to lead the way in meeting data centers' rising electricity needs due to their cost-competitiveness and availability.
However, limitations on reliable power sources, sustainability, and upstream infrastructure for power access are significant challenges. Meeting the growing demand for data centers could create significant economic opportunities, including hundreds of thousands of jobs.
The rise in electricity demand for data centers will drive up emissions, but this increase will be small in the context of the overall energy sector. As the demand for AI continues to grow, finding sustainable solutions to power data centers will be crucial to minimizing its environmental impact.
