The global AI craze has given data centers yet another boost as all the helpful and unhelpful comments that ChatGPT, Gemini and other artificial intelligence tools generate are associated with a high level of computational power that these centers provide. However, when looking at projected global electricity demand increases until 2030, the International Energy Agency expects that despite data centers’ known energy hunger, other sectors will increase their energy use even more.
Non-heavy industries are projected to see the biggest increases in electricity use between 2024 and 2030, at an additional 1,533 terawatt hours. This is the same amount of energy that around 145 million average U.S. households would consume annually. In the IEA analysis, data centers come fifth, also running behind the growth sector of electric transport as well as appliances and space cooling. Yet, data center use going up by 530 terawatt hours over the course of six years would still constitute an increased energy need equivalent to the annual use of 50 million households.
“Other key drivers, such as industry output growth and electrification, the deployment of electric vehicles and the adoption of air conditioning, lead the way”, the IEA says about the expected rise in global electricity demand, acknowledging that data centers’ contribution of around 10% to this (depending on the scenario) still constitutes a “strong increase”.
According to the IEA calculation, 8% of the increase of global electricity demand until 2030 would be due to data centers in the organization’s base scenario. In another scenario in which AI adoption is to speed up even more in the future, this share could reach as high as 12% by 2030 and even higher by 2035, making up as much as 4.4% of overall global electricity demand then.
But the agency has also run through opposing frameworks, for example a case where better energy efficiency is achieved going forward. In this scenarios, only 2.6% of global electricity demand would be caused by data centers in 2035. Likewise, if AI use failed to lift off further than it already has, its share of global electricity use would stay below 2% by that time, compared to 3.2% in the 2035 base scenario and 1.5% today.
Where Energy-Hungry Data Centers Are Located
Depending on the location, however, data centers can be a bigger energy hog. They already consumer 20% of metered energy supply in Ireland, 25% in Virginia and above 10% in five more U.S. states where data centers are common. Virginia leads the world in data center capacity, with almost seven gigawatts installed as of 2024, ahead of Beijing, Chicago, Singapore, Shanghai, the southern Chinese Pearl River delta, Dallas, Dublin and Omaha.
Taking a broader view, data centers are just one aspect of a world that is rapidly electrifying, driving up demand everywhere. It is not just cars and other vehicles that are making the switch to electricity from other power sources. Industries, especially non-heavy industries, are not only scaling up production, they are also increasingly seeing electrification as a way to be more competitive, taking advantage of sinking prices for renewable energy installations while reducing volatility stemming from purchasing energy off the world market. This became clear to many when the invasion of Ukraine by Russia led to the price of oil and natural gas soaring, hurting especially energy-intensive production plants.
Additionally, rapid international development is driving up the need for industrial goods of all kinds as more and more people enter the consumption class. The same development is prompting a massive demand for cooling and heating, which uses copious amount of electricity, same as the appliances people who become more affluent will inevitably be buying and using. While data centers added a notable chunk to global energy demand, and did so fast as AI use blew up overnight, they are yet another cog in the global machinery of the rapid electrification about to come.
Charted by Statista