Riding the wave of data centre investment

In a new International Energy Agency (IEA) commentary, Siddharth Singh and I shed some light on the critical issue of electricity demand from data centres.

Here I want to summarise the insights in four key messages:

1. Data centre investment is booming, particularly in the United States, but also elsewhere. In the US, investment in data centres has doubled in the last two years.
2. This has understandably raised concerns about growing demand for electricity. However, as we noted in our new World Energy Outlook, the energy sector is set to enter the New Age of Electricity. After having grown about 4 300 TWh over the last decade, total electricity demand is set to grow around 6 750 TWh in the decade to come. At the global level, data centres will be one driver of this, but not the dominant one.
3. However, data centre demand growth can cause problems for regions or countries in which they are concentrated. Unlikely other energy infrastructure, data centres are both power hungry and cluster close together. That combination can create real challenges for grids and generation capacity.
4. We need more data and analysis to understand the data centre demand outlook. It's time to work together with the tech industry to create scenarios that the energy industry can use for the uptake of AI and its implications for energy demand. We need new public-private partnerships to increase data availability on the data centre project pipeline, efficiency potential, and operational characteristics.

Our December 2024 Global Conference on Energy and AI will provide a space to start this dialogue.