Electricity Demand for Data Centers, AI, Crypto Could Double by 2026

It’s no secret that data centers are electricity hogs, but the explosion in artificial intelligence and continued interest in cryptocurrency mean global electricity demand from data centers could double by 2026, according to a report from the International Electricity Agency (IEA).

Global data centers, AI, and crypto consumed an estimated 460 terawatt-hours (TWh) in 2022, or almost 2% of total global electricity demand. That’s expected to top 1,000TWh in 2026, which “is roughly equivalent to the electricity consumption of Japan,” the IEA says.

In the United States, electricity demand fell by 1.6% last year after a 2.6% increase in 2022, but that was (perhaps ironically) due in part to “milder weather.” It’s expected to increase again in the next two years, though most of the global growth in data center electricity demands will probably happen in Ireland and Denmark, the IEA says.

There are more than 8,000 data centers globally; 33% are in the US, 16% are in Europe, and about 10% are in China. The biggest US data center hubs are in California, Texas, and Virginia.

On AI, the IEA predicts a “tenfold” increase in electricity demand for Google as it further embraces the technology. “When comparing the average electricity demand of a typical Google search (0.3Wh of electricity) to OpenAI’s ChatGPT (2.9Wh per request), and considering 9 billion searches daily, this would require almost 10TWh of additional electricity in a year,” it says.

Similarly, cryptocurrency uses about as much electricity as all of the Netherlands and is forecast to increase by 40% in the next few years. IEA, however, acknowledges that “uncertainties remain for the pace of acceleration in cryptocurrency adoption and technology efficiency improvements.”

Fortunately, it seems like energy creation is also growing on pace to handle all of the extra electricity usage. Bloomberg notes that renewable energy sources are growing at a faster rate than electricity demand, so there will be enough electricity to go around. The IEA says renewable energy will overtake coal as the largest source of electricity in the world by 2025.

“The power sector currently produces more CO2 emissions than any other in the world economy, so it’s encouraging that the rapid growth of renewables and a steady expansion of nuclear power are together on course to match all the increase in global electricity demand over the next three years,” IEA Executive Director Faith Birol tells Bloomberg.

Fresh water usage has also been steadily increasing as tech companies try to keep all of their data centers cool. Microsoft and Google reported a 34% and 21% spike in water consumption, respectively, in 2022 vs. 2021.