The International Energy Agency (IEA)’s Energy and AI report forecasts that electricity demand from data centres worldwide is set to more than double by 2030, to around 945 TWh. AI will be the most significant driver of this increase, with electricity demand from AI-optimised data centres projected to more than quadruple by 2030.

In the US, power consumption by data centres is on course to account for almost half of the growth in electricity demand between now and 2030, says the report. Driven by AI use, the US economy is set to consume more electricity in 2030 for processing data than for manufacturing all energy-intensive goods combined, including aluminium, steel, cement and chemicals, suggests the report. In advanced economies more broadly, data centres are projected to drive more than 20% of the growth in electricity demand between now and 2030. ‘[This will put] the power sector in those economies back on a growth footing after years of stagnating or declining demand in many of them,’ notes the IEA.

A diverse range of energy sources will be tapped to meet data centres’ rising electricity needs, says the report. Renewables and natural gas are expected to take the lead, ‘due to their cost-competitiveness and availability in key markets’.

‘AI is one of the biggest stories in the energy world today – but until now, policy makers and markets lacked the tools to fully understand the wide-ranging impacts,’ comments IEA Executive Director Fatih Birol. The report aims to fill this gap based on new global and regional modelling and datasets, as well as consultation with governments and regulators, the tech sector, the energy industry and international experts.

The report emphasises the significant uncertainties that remain, from the macroeconomic outlook to how quickly AI will be adopted. It also notes questions over how capable and productive AI will become, how fast efficiency improvements will occur, and whether bottlenecks in the energy sector can be resolved.

AI could intensify some energy security strains while helping to address others, says the IEA. It notes that cyberattacks on energy utilities have tripled in the past four years and become more sophisticated because of AI. At the same time, AI is becoming a critical tool for energy companies to defend against such attacks. Another energy security concern relates to the expanding demand for critical minerals used in the equipment in the data centres that power AI. The report provides estimates of demand from data centres for critical minerals, whose global supply is today highly concentrated.

While the increase in electricity demand for data centres is set to drive up emissions, this increase will be small in the context of the overall energy sector and could potentially be offset by emissions reductions enabled by AI if adoption of the technology is widespread, notes the IEA. Additionally, as AI becomes increasingly integral to scientific discovery, the report finds that it could accelerate innovation in energy technologies such as batteries and solar PV.

According to the IEA, countries that want to benefit from the potential of AI ‘need to quickly accelerate new investments in electricity generation and grids, improve the efficiency and flexibility of data centres, and strengthen the dialogue between policy makers, the tech sector and the energy industry’.

Alongside the report, the IEA has published a new ‘AI agent’, available on the report’s main web page, to help readers interact with its findings.  

Challenges and opportunities ahead

Meanwhile, an updated Economic Transition Scenario (ETS) in BloombergNEF’s (BNEF) recently published New Energy Outlook 2025 report echoes the IEA’s forecasts. It too projects faster growth in power demand due to increased use of AI, presenting ‘both a major challenge and opportunity for businesses’. According to the report, demand for electric power rises 75% by 2050 as economic development, electric vehicles (EVs), cooling needs and data centres increase overall use.

Growing economies in Asia, the Middle East and Africa account for a large portion of the increase. David Hostert, Global Head of Economics and Modelling at BNEF, and lead author of the report, comments: ‘It is here that the greatest opportunities for power infrastructure investment will lie. We expect data centre power demand in these markets to grow by six to 16 times by 2035 and reach 260 TWh.’

Data centres are emerging as one of the most important new sources of electricity demand, reports BNEF, representing 4.5% of total global power demand in 2035 and rising to 8.7% in 2050. It estimates that an additional 362 GW of power generation capacity will be needed globally by 2035 to meet data centre demand.  

As noted by the IEA, the US stands out as the single most important market in this trend. According to BNEF analysis, US data centres are projected to grow from 3.5% of total electricity demand in 2024 to 8.6% by 2035 – ‘a faster rise than any other major load class’, it says. Over the next five years, demand from US data centres could outpace even EVs’ incremental demand, driven by the surge in AI training workloads that require significant compute capacity and highly energy-dense infrastructure, concludes BNEF.