Artificial intelligence is set to fuel a rapid rise in global electricity demand as data centers expand while presenting new opportunities to reduce emissions and boost energy sector efficiency, the International Energy Agency said in a landmark report released on Wednesday.
In its special report, Energy and AI, the Paris-based agency forecasts that data center electricity consumption will more than double by 2030, reaching around 945 terawatt-hours — roughly equivalent to Japan’s current annual electricity use.
AI-optimized data centers alone are expected to account for a fourfold increase in power consumption over the same period.
“AI is one of the biggest stories in the energy world today – but until now, policymakers and markets lacked the tools to fully understand the wide-ranging impacts,” said IEA Executive Director Fatih Birol.
US and Advanced Economies to Lead in Electricity Growth
In the United States, data center demand is projected to account for nearly half of the country’s total electricity growth through 2030. By the end of the decade, the US will use more electricity for data processing than for producing energy-intensive materials such as steel and cement combined, the report said.
More broadly, advanced economies are expected to see over 20 percent of their power demand growth come from data centers, reversing a trend of stagnation in electricity use seen in recent years.
The IEA noted that renewables and natural gas are likely to meet the bulk of the increased demand, driven by cost advantages and supply availability. However, the report also highlights mounting concerns over energy security, cyber threats, and the critical minerals required to build AI infrastructure.
AI Raises Security Concerns – and Solutions
Cyberattacks on energy utilities have tripled over the past four years, with AI both increasing the sophistication of such attacks and enhancing defensive capabilities. Meanwhile, the concentration of global supply chains for minerals used in servers and cooling systems poses another potential risk.
Despite the energy demands, the report suggests AI could be a net positive for emissions in the long run, provided the technology is widely adopted to improve energy system efficiency and accelerate clean technology development.
“With the rise of AI, the energy sector is at the forefront of one of the most important technological revolutions of our time,” Birol said. “AI is a tool, potentially an incredibly powerful one, but it is up to us – our societies, governments and companies – how we use it.”
Global Cooperation and Investment
The IEA urged governments to ramp up investment in power grids and low-carbon generation while improving data center efficiency. The report also called for greater collaboration between policymakers, the tech industry, and energy providers to mitigate risks and harness AI’s benefits.
The publication builds on discussions from the IEA’s Global Conference on Energy and AI in December 2024 and the AI Action Summit co-chaired by France and India in February. The agency plans to launch a new Observatory on Energy, AI and Data Centres to track developments and support policy-making with updated global data.
An interactive AI agent has also been released alongside the report, enabling users to explore key findings conversationally.
