- The IEA warned that booming AI demand is straining power grids and could delay up to 20% of planned data centre projects.
- Data centre electricity use could more than double by 2030, exceeding Japan’s current consumption.
The International Energy Agency has warned that the rapid growth of artificial intelligence is putting unprecedented pressure on electricity grids worldwide. It stated that AI capabilities have advanced due to falling computing costs, wider data availability, and major technical breakthroughs.
The agency stated that electricity grids are already under strain in many regions. It cautioned that, without action, around 20 per cent of planned data centre projects could face delays. It explained that grid connection queues are long and complex. Moreover, building new transmission lines and installing components such as transformers and cables can take years.
The IEA stated that data centres accounted for approximately 1.5 per cent of global electricity consumption in 2024. This represented roughly 415 terawatt-hours of demand. It projected that data centre consumption will more than double to about 945 TWh by 2030, slightly higher than Japan’s current consumption. The United States, China and Europe are expected to drive most of this growth.
In the United States, the IEA noted that data centres account for nearly half of projected electricity demand growth through 2030. By decade end, the country could use more power for data centres than for producing aluminium, steel, cement, chemicals and other energy-intensive goods combined. The agency said AI-focused accelerated servers are driving the increase.
While data centres still form a small share of total power use, the IEA warned that AI-focused facilities can draw as much electricity as power-intensive factories. However, they are more geographically concentrated. Nearly half of US capacity sits in five major clusters, creating local grid challenges.
The IEA said policymakers must address these risks through careful planning. It recommended locating new data centres in regions with strong power and grid availability. It also recommended more flexible operation of server fleets and on-site generation and storage assets.
At the same time, the agency highlighted the benefits of AI for the energy system. Energy companies already use AI to optimise mineral supply, electricity generation, transmission and consumption. Objectives include reducing costs, improving supply, extending asset lifetimes and lowering emissions. The IEA stated that AI could increase transmission capacity, reduce renewable energy curtailment, and detect grid faults. It is estimated that as much as 175 GW of transmission capacity could be unlocked without building new lines if these tools are widely applied.
The report also raised concerns about energy security and critical materials. It said AI compounds certain risks while offering cyber and physical solutions. It noted that China currently supplies about 99 per cent of global refined gallium, a key material.
The IEA called for deeper collaboration between the technology and energy sectors. It argued that delivering energy for AI and using AI for energy will require joint planning. It also said it will continue to provide data and analysis to help both sectors prepare as AI adoption accelerates.