Artificial intelligence is set to significantly reshape the global energy landscape, with soaring electricity demand from data centres expected to place new pressures on power systems, according to a new report from the International Energy Agency (IEA).
The IEA’s Energy and AI report projects that global electricity use by data centres will more than double by 2030, reaching around 945 terawatt-hours (TWh)—roughly equal to Japan’s current total electricity consumption. AI is identified as the primary driver of this increase, with AI-optimised data centre electricity demand alone expected to quadruple over the same period.
“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 Fatih Birol. “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 United States is forecast to see some of the most pronounced impacts, where data centres are projected to account for nearly half of the country’s electricity demand growth between now and 2030. The IEA estimates that by the end of the decade, more power will be used in the U.S. for processing data than for producing aluminium, steel, cement, and chemicals combined.
Advanced economies as a whole will see data centres contribute over 20% of electricity demand growth in the same timeframe, reversing years of flat or declining electricity consumption in many regions.
To meet this growing demand, the report notes that a variety of energy sources will be deployed, with renewables and natural gas expected to dominate due to their cost advantages and availability in key markets.
The IEA report also highlights both risks and opportunities linked to AI in the energy sector. AI could increase vulnerabilities, such as the rising frequency and sophistication of cyberattacks on energy utilities, which have tripled in the past four years. However, it is also being used to bolster cybersecurity efforts and improve efficiency across power systems.
Another emerging challenge lies in the increased demand for critical minerals used in data centre equipment. The report provides initial estimates for mineral demand from this sector, flagging concerns about supply concentration.
While emissions from increased data centre electricity use are expected to rise, the IEA suggests this impact may be modest within the wider energy sector. It also notes that AI could enable deeper emissions cuts if broadly adopted across industries.
“With the rise of AI, the energy sector is at the forefront of one of the most important technological revolutions of our time,” said Birol. “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 calls for accelerated investment in electricity generation and grid infrastructure, improved data centre efficiency, and stronger collaboration between governments, the tech industry, and energy providers to fully leverage AI’s benefits while managing its challenges.
The report is part of the IEA’s broader initiative on energy and AI, following its 2024 Global Conference on Energy and AI and its role in the AI Action Summit led by France and India. The agency also plans to launch a new Observatory on Energy, AI and Data Centres to provide up-to-date insights into the sector.
