Data centers could consume twice as much electricity by 2026, thanks in large part to cryptocurrencies and artificial intelligence, according to a new report from the International Energy Agency (IEA).
We store all our emails, photos, cat videos, and anything else floating around in the cloud in our data centers. More and more data centers are being built for Bitcoin mining and AI training.
This has already sparked a backlash against the environmental impact of cryptocurrencies and AI tools like ChatGPT, as all these data centers are responsible for the greenhouse gas emissions associated with their electricity usage. The world will need more renewable energy to remove pollution from the power grid and at the same time meet the rapidly increasing power demand from data centers.
This growth is equivalent to adding the electricity demand of one more country.
Data centers, cryptocurrencies and AI accounted for about 2% of global electricity demand in 2022, using 460 TWh of electricity, according to the IEA’s annual electricity report released today. Cryptocurrency mining alone accounts for almost a quarter of electricity consumption, and is estimated to consume 110 TWh by 2022.
Depending on the pace of technological development, electricity consumption from data centers (including those used for cryptocurrencies and artificial intelligence) could increase to up to 1,050 TWh by 2026. This increase is equivalent to adding one more country’s worth of electricity. A more conservative scenario would be Sweden, or at most Germany.
Currently, the United States has the most data centers, accounting for 33 percent of the world’s approximately 8,000 data centers. It is also the country with the most Bitcoin mining. The IEA predicts that US data center electricity consumption will grow at a “rapid pace” in the coming years, rising from about 4% of US demand in 2022 to 6% by 2026. I am. Other drivers of its growth are the expansion of 5G networks and cloud-based services.
Ireland has one of the lowest corporate tax rates in the European Union and is expected to see a boom in new data center construction. 82 data centers already account for his 17 percent of the country’s electricity consumption in 2022. An additional 54 data centers are under construction or have recently been approved to begin construction. By 2026, all these data centers could meet nearly a third of the country’s annual electricity needs.
“The rapid expansion of the data center sector and increasing electricity demand may pose challenges to the power system,” the IEA report said. This risk is not limited to Ireland. In London, the power demands of data centers are making residential development difficult. Texas, the US Bitcoin mining capital, is grappling with new crypto mines (also known as crypto data farms) that will put added pressure on an already aging and stressed power grid.
Data centers are essentially warehouses for computers, so 40% of their electricity demand comes from computing. Cooling all equipment accounts for another 40% of demand, with other IT equipment accounting for the rest.
Adding AI to the mix increases the overall power demand of the data center. In a scenario that fully incorporates AI, Google search could consume up to 10 times more power, the IEA report says. Similarly, the AI industry predicts that in 2026 it could consume 10 times more power than it did last year.
Cryptocurrency electricity demand is expected to jump 40% by 2026. There are also some examples of success in limiting the energy and environmental footprint of cryptocurrencies. The Ethereum blockchain was able to reduce power usage by more than 99% by switching to a much more energy-efficient method of validating blocks of new transactions. Still, the Bitcoin network has refused to follow suit and is responsible for the majority of carbon emissions caused by crypto mining.
Fortunately, the IEA also predicts that renewable energy growth will accelerate around the world, overtaking coal to generate more than a third of the world’s electricity by 2025. Still, we haven’t solved all the challenges that new data centers pose. Improving energy efficiency, such as adopting highly efficient cooling systems, is probably just as important, as growth in electricity demand could outpace growth in renewable energy.