Electricity Demand at Data Centers Could Double in Three Years

(Bloomberg) -- Global electricity demand from data centers, cryptocurrencies, and artificial intelligence could more than double over the next three years, adding the equivalent of Germany’s entire power needs, the International Energy Agency forecasts in its latest report.

There are more than 8,000 data centers globally, with about 33% in the US, 16% in Europe, and close to 10% in China, with more planned. In Ireland, where data centers are developing rapidly, the IEA expects the sector to consume 32% of the country’s total electricity by 2026 compared to 17% in 2022. Ireland currently has 82 centers; 14 are under construction and 40 more are approved.

Overall global electricity demand is expected to see a 3.4% increase until 2026, the report found. The increase, however, will be more than covered by renewables, such as wind, solar, and hydro, and all-time high nuclear power. 

Low-emissions sources are expected to account for almost half of the world’s electricity generation by 2026, up from under 40% in 2023, the report found. This includes nine million battery electric vehicles and 11 million heat pumps in Europe.

“The power sector currently produces more CO2 emissions than any other in the world economy, so it’s encouraging that the rapid growth of renewables and a steady expansion of nuclear power are together on course to match all the increase in global electricity demand over the next three years,” said IEA Executive Director Fatih Birol.

The global intensity of emissions from power generation – or the amount of carbon dioxide produced per unit of energy – is expected to decline by an average of about 3.5% a year through 2026, the IEA said. For Europe, more intense decarbonization efforts mean that decline is expected to be 13% per year.