The development and uptake of artificial intelligence (AI) has accelerated in recent years – elevating the question of what widespread deployment of the technology will mean for the energy sector. There is no AI without energy – specifically electricity for data centres. At the same time, AI could transform how the energy industry operates if it is adopted at scale. However, until now, policymakers and other stakeholders have often lacked the tools to analyse both sides of this issue due to a lack of comprehensive data. This report aims to fill this gap.

The report includes projections for how much electricity AI could consume over the next decade, as well as which energy sources are set to help meet it. It also analyses what the uptake of AI could mean for energy security, missions, innovation and affordability.

Policy remains key to ensuring AI and data centres play a constructive role in energy systems. The report proposes three principles to help ensure AI deployment is leveraged for the benefit of the energy sector, and that data centres minimise any adverse impacts on electricity systems. 

Key findings

• The AI and energy nexus continues to evolve rapidly.
• Energy consumption per AI query has declined massively, but much more energy-intensive use cases are becoming increasingly popular.
• Across the AI value chain, a scramble for electricity, grid connections, manufacturing capacity, chips and capital has set in.
• AI is pushing data centre power density to the limits of today’s technologies.
• In an unstable world, the links between AI and energy security have tightened.
• Social concerns around AI have grown, focusing particularly on the environment and electricity prices.

Principles

1. Proactive management of data centre project pipelines and electricity sector investment can support adequate and reliable electricity for the sector without adversely affecting prices.
2. Approaches that promote electricity system flexibility can help accelerate grid connections and ensure electricity affordability.
3. Removing barriers to AI adoption in the energy sector can ensure AI is leveraged to enhance energy security and sustainability.