Artificial Intelligence (AI) is set to revolutionize the global energy landscape, according to a landmark report from the International Energy Agency (IEA). As AI adoption accelerates, it will both drive a surge in electricity demand from data centres and unlock groundbreaking opportunities to transform how the energy sector operates—ushering in a new era of innovation, efficiency, and environmental impact.
AI to Drive a Dramatic Increase in Global Electricity Demand
The IEA’s newly released special report, titled Energy and AI, presents the most comprehensive, data-driven global analysis of the evolving intersection between artificial intelligence and the energy sector. One of its most striking forecasts is the projected doubling of electricity demand from data centres by 2030, reaching approximately 945 terawatt-hours (TWh). That’s more than the entire electricity consumption of Japan today.
AI is identified as the single largest driver of this growth. By 2030, electricity demand from AI-optimized data centres is expected to more than quadruple, reshaping energy consumption patterns across industries and nations.
United States Leads in AI-Driven Power Surge
In the United States, this transformation is particularly pronounced. The report reveals that data centres are on track to account for nearly half of all electricity demand growth between now and 2030. What’s more, by that time, the U.S. economy is set to consume more electricity for AI and data processing than for manufacturing all energy-intensive goods combined, including steel, aluminum, cement, and chemicals.
This resurgence in demand is not limited to the U.S. In advanced economies worldwide, AI and data centres are projected to drive over 20% of electricity demand growth, reversing a long-standing trend of stagnation or decline in energy consumption.
The Energy Mix: Renewables and Natural Gas Take the Lead
To meet this rising demand, countries are expected to rely on a diverse mix of energy sources. The IEA highlights renewable energy and natural gas as the front-runners, citing their cost-effectiveness and broad availability in key global markets. This shift could pave the way for a more sustainable future—if managed wisely.
Balancing AI’s Potential with Energy Security and Emissions Goals
The report also addresses the dual-edged nature of AI in the energy domain. While AI offers the promise of emissions reductions, cost savings, and operational improvements, it also introduces new challenges—particularly in terms of cybersecurity and resource demands.
Cyberattacks on energy infrastructure have tripled in the past four years, and AI has contributed to the sophistication of these threats. Yet, AI is also emerging as a critical line of defense, helping energy firms anticipate and counteract attacks more effectively.
Another major concern is the growing need for critical minerals used in AI data centre hardware. These resources are currently highly concentrated in a few countries, posing potential risks to supply chain stability and geopolitical tensions.
Can AI Help Solve the Energy Crisis?
Despite these concerns, the report remains optimistic. The IEA suggests that AI could become a vital catalyst for energy innovation, particularly in technologies such as battery storage and solar photovoltaics (PV). As AI tools become more sophisticated, their role in scientific discovery and technological advancement is expected to expand rapidly.
Importantly, while the projected increase in electricity demand will lead to higher emissions, the net impact could be neutral or even positive if AI helps optimize energy systems, improve efficiency, and accelerate the deployment of clean energy solutions.
The Policy Imperative: Collaboration is Key
To harness AI’s full potential while mitigating its risks, the IEA urges governments, energy providers, and tech companies to act quickly. Key recommendations include:
- Accelerating investment in electricity generation and grid infrastructure.
- Improving energy efficiency and flexibility in data centre operations.
- Fostering stronger dialogue between policymakers, the energy sector, and the tech industry.
As IEA Executive Director Dr. Fatih Birol puts it, “AI is a tool, potentially an incredibly powerful one, but it is up to us – our societies, governments and companies – how we use it.”
IEA’s Global Leadership on AI and Energy
This report builds on the momentum of the IEA’s Global Conference on Energy and AI, held in December 2024, the largest such event to date, and its participation in the AI Action Summit chaired by France and India in February. To support ongoing analysis, the IEA is launching a new Observatory on Energy, AI, and Data Centres, designed to deliver the world’s most up-to-date data and insights on the topic.
Additionally, to make the report more accessible, the IEA has introduced an AI-powered interactive agent, allowing users to explore the findings in a conversational and user-friendly format.
AI’s Role in the Future of Energy
The relationship between AI and energy is complex, powerful, and rapidly evolving. As AI drives electricity demand to unprecedented levels, it also holds the key to solving some of the most pressing challenges in the energy sector—from efficiency and emissions to cybersecurity and
resource management.
The IEA’s Energy and AI report marks a pivotal step forward, offering data, guidance, and a clear call to action for global stakeholders. The choices made in the next few years will determine whether AI becomes a force for sustainable energy innovation—or a missed opportunity in our quest for a cleaner, smarter future.
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