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Energy industries

AI Revolution in Energy Sector: Balancing Ambitions and Decarbonisation Concerns

Strategic Insights

— 2 min read

The use of artificial intelligence (AI) in the energy sector is transforming the way electricity is generated, distributed, and consumed. Data centres, which are driving the growth of AI, account for a significant amount of electricity demand, raising concerns about their impact on existing infrastructure and sustainability. According to the International Energy Agency, data centres currently account for only 1.5% of global electricity consumption, but their electricity demand is expected to more than double by 2030. In the EU, data centres account for around 3% of total electricity demand, with Ireland being the highest at over 20%.

Key Takeaways:

  • The EU's 2020 digital strategy aims for data centres to become climate neutral by 2030, while the 2023 EU Energy Efficiency Directive requires data centres to report on their energy consumption, water usage, and use of renewable energy.
  • The upcoming EU initiatives, including the Cloud and AI Development Act and the strategic roadmap for digitalisation and AI for the energy sector, will aim to balance ambitions on competitiveness and concerns over decarbonisation.
  • Data centres use energy not only to train and run AI models but also to cool servers and maintain equipment, contributing to the high energy demand.
  • AI-focused data centres tend to cluster in geographical locations, putting pressure on local grids and involving trade-offs with climate goals, land use, and energy affordability.
  • A large data centre is estimated to consume as much electricity annually as 100,000 households, and a ChatGPT query uses 10 times more electricity than a traditional Google search.
  • Renewables and natural gas are the main energy sources used to power data centres globally, with nuclear and small modular reactors also on the rise.
  • The EU's upcoming data centre energy efficiency package and rating scheme will require data centres to report on key performance indicators on energy and sustainability.

Statistics:

  • Data centres currently account for 1.5% of global electricity consumption, but their electricity demand is expected to more than double by 2030 (International Energy Agency).
  • Data centres account for around 3% of total electricity demand in the EU, with Ireland being the highest at over 20% (EU data).
  • A large data centre consumes as much electricity annually as 100,000 households (estimated).
  • A ChatGPT query uses 10 times more electricity than a traditional Google search (depending on the complexity of the question and the format used).

Sources:

  • International Energy Agency
  • European Parliament
  • EU Digital Strategy (2020)
  • EU Energy Efficiency Directive (2023)
  • EU Data Centre Energy Efficiency Package (2024)
  • EU Cloud and AI Development Act (forthcoming)
  • EU Strategic Roadmap for Digitalisation and AI for the Energy Sector (forthcoming)

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