The International Energy Agency (IEA) forecasts a transformative impact of artificial intelligence (AI) on the energy sector over the next decade, primarily driven by a significant surge in electricity demand from data centers worldwide. A new IEA report highlights AI’s potential to unlock cost reductions, boost competitiveness, foster innovation, and reduce emissions. The report emphasizes the growing connection between energy and AI, identifying that global data center electricity demand is projected to more than double by 2030, reaching approximately 945 terawatt-hours – exceeding Japan’s current total electricity consumption.
AI is expected to be the primary catalyst for this increase, with AI-optimized data centers’ electricity demand projected to quadruple by 2030. Currently, data centers account for less than 10% of projected electricity demand growth to 2030 globally. However, in the United States alone, data centers are anticipated to account for nearly half of the total growth in electricity demand. To meet this rising demand, the IEA suggests a diverse range of energy sources, with renewables and natural gas taking the lead due to their cost-effectiveness and availability.
The IEA also notes that AI presents both challenges and opportunities for energy security. Cyberattacks on energy utilities have tripled in recent years and become more sophisticated due to AI. Conversely, AI is becoming a critical tool for energy companies to defend against these attacks. IEA executive director Fatih Birol suggests that while increased electricity demand for data centers could slightly increase emissions, the increases could be offset by AI-enabled emission reductions if the technology is widely adopted. AI could also accelerate innovation in energy technologies, such as batteries and solar PV.
