The global energy market is poised for significant transformation as AI adoption accelerates, a trend underscored by recent findings from Goldman Sachs Research. Notably, a ChatGPT query consumes nearly ten times the electricity of a Google search, signalling a profound shift in energy consumption patterns across the US, Europe, and beyond.
Historically, data centres maintained a stable appetite for power despite increasing workloads. However, as AI technologies gain traction, Goldman Sachs Research projects a striking 160% increase in data centre power demand by 2030. Currently accounting for 1-2% of global power consumption, data centres are anticipated to escalate to 3-4% by the decade’s close, driving unprecedented electricity growth.
Goldman Sachs Research, led by analysts Carly Davenport, Alberto Gandolfi, and Brian Singer, emphasises the critical implications of this surge in their recent reports. While data centre workloads nearly tripled from 2015 to 2019, energy consumption remained relatively flat at 200 terawatt-hours annually, buoyed by efficiency gains. Since 2020, however, efficiency gains have plateaued, paralleling an uptick in power consumption, particularly driven by AI advancements.
AI’s expanding footprint in data centres, projected to represent 19% of total demand by 2028, also forecasts a substantial rise in carbon dioxide emissions. Goldman Sachs Research estimates a “social cost” ranging from $125-140 billion due to these emissions by 2030. Notably, technology firms are poised to counterbalance these environmental impacts with investments in renewable energies and emerging nuclear technologies, while leveraging AI to foster innovation across sectors such as healthcare, agriculture, and energy efficiency.
In the United States, where data centres are anticipated to consume 8% of total electricity by 2030, significant infrastructural investments are imminent. Goldman Sachs forecasts a $50 billion expenditure on new generation capacities to meet escalating demands, alongside an increase in natural gas demand necessitating new pipeline developments.
Across the Atlantic, Europe faces a comparable transformation, with power demand projected to surge by 40-50% from 2023 to 2033, fuelled by data centre expansions and electrification drives. With approximately 15% of global data centres located in Europe, investments exceeding €800 billion in transmission and distribution infrastructure are anticipated, complemented by €850 billion in renewable energy initiatives to sustainably meet rising demands.
Amidst these developments, disparities in power availability across European nations highlight varied strategies, from leveraging abundant renewable sources in Nordic nations, Spain, and France, to attracting data centres with fiscal incentives in Germany, the UK, and Ireland.
Navigating this transformative phase in data centre evolution demands strategic foresight and proactive investment in sustainable energy solutions. As global business leaders brace for increased electricity demands and environmental responsibilities, informed decisions will be pivotal in shaping the future of energy consumption in the AI era.