Report: AI, crypto drive spike in data-center energy demands

The rapid growth of emerging technology such as artificial intelligence (AI) and cryptocurrency is driving higher electricity consumption from data centers, which could see consumption double globally by 2026, according to a new report.

Energy-intensive data centers are “an important new source of higher electricity consumption” and play a significant role in driving the growth of electricity demand in many regions, according to International Energy Agency’s (IEA) Electricity 2024 report. The report offers an analysis of recent policies and market developments in all things electricity, providing forecasts through 2026 for electricity demand, supply and carbon dioxide emissions.

According to IEA, global data-center energy consumption could get so high that it equals that of the entire country of Japan, or more than 1,000 terawatt-hours (TWh), by 2026. This is an increase from consumption of an estimated 460 TWh in 2022. Moreover, in the US alone, data-center consumption is expected to account for more than one-third of all energy demands by 2026.

This overall surge in consumption by computing power – which is necessary for technologies like AI and cryptocurrency to exist and evolve – will require updated regulations and technological improvements regarding efficiency to moderate the effects of such a dramatic increase, according to the report.

Meanwhile, strong growth in emerging economies paired with an anticipated recovery in industry and ongoing electrification of the residential and transportation sectors in many global regions “will be the mainstays of increasing electricity over the next two years,” the IEA report found.

Balancing tech benefits and energy needs

Technology providers are aware of the strain that emerging technologies are putting on energy consumption, as they require ever-more compute power driven by large clusters of machines that require electricity as well as cooling to maintain always-on availability.