The IEA’s new Energy and AI research has revealed that growth in the use of Artificial Intelligence (AI) will lead to the global electricity demand from data centres more than doubling in the next 5 years, reaching 945 terawatt-hours (TWh) in 2030. Notably this figure is equivalent to Japan’s current annual electricity usage, and represents an almost 128% increase from the 415 TWh of power used by data centres in 2024.
"AI will be the most significant driver of this increase, with electricity demand from AI-optimised data centres projected to more than quadruple by 2030,"[i] the IEA has claimed. The researchers credit a step change in the capabilities of AI with soaring demand, explaining that this has been driven by falling computation costs, a surge in data availability, and technical breakthroughs. Further, AI has moved from an academic pursuit to a trillion-dollar industry; the market capitalisation of AI-related firms in the S&P 500 has grown by around $12 trillion since 2022.
“AI is one of the biggest stories in the energy world today – but until now, policy makers and markets lacked the tools to fully understand the wide-ranging impacts,” IEA Executive Director Fatih Birol said in a statement[ii].
“With the rise of AI, the energy sector is at the forefront of one of the most important technological revolutions of our time,” Birol added. “AI is a tool, potentially an incredibly powerful one, but it is up to us – our societies, governments and companies – how we use it.”[iii]
Artificial Intelligence poses a double-edged sword, on the one hand it raises concerns that data centre growth may fuel climate change, yet alternatively, it raises hopes that AI could help reduce emissions by unlocking new optimisations and efficiencies within the energy sector.
In the IEA’s forecasts electricity use by data centres grows from 180 million tonnes (Mt) today to 300 Mt in its ‘Base Case’ by 2035. While these emissions remain below 1.5% of the total energy sector emissions in this period, data centres are among the fastest growing sources of emissions. Further, data centres are among the few sectors – along with road transport and aviation – that see an increase in their direct and indirect emissions by 2030.
Source: IEA
A separate long-range forecast from BloombergNEF found that electricity demand of data centres will grow from 4.5% of total global power demand in 2035, to 8.7% in 2050. As such, BNEF estimates that an additional 362 gigawatts of power generation capacity will be needed to meet data centre demand by 2035, attributing the energy demand increase to the global growth in AI[iv].
A new study by Seagate has explored the barriers faced in developing sustainable data storage facilities. The recently launched Decarbonising Data Report suggests that billions of dollars in investment will be required to meet funding requirements for renewable energy, energy-efficient IT systems, infrastructure upgrades and sustainability tracking tools.
Seagate surveyed 330 data centre professionals across the following 11 markets: Australia, China, France, Germany, India, Japan, North America, Singapore, South Korea, Taiwan, and the United Kingdom. The study found that globally, an average of $4.9 billion would be required to establish sustainable data storage solutions[v].
Nearly 95% of respondents said that they are concerned about the environmental impacts of data centres, but only 3.3% said they prioritise it in purchasing decisions, with many focusing on the total cost of ownership and purchasing costs. Respondents identified their top three sustainability issues as high energy consumption and resulting carbon emissions (53.5%), extensive raw material requirements for infrastructure (49.5%) and high operational energy demands (35%).
When identifying the barriers to embedding sustainable practices into data storage projects, the report singled out the high cost of green infrastructure and lack of physical space. Further, while 61% of respondents reported that their companies currently use renewable energy sources to power their data infrastructure, nearly 80% said they have no access to sustainable electricity options in their region.
“Data centres are under intense scrutiny – not only because they support modern AI workloads, but because they are becoming one of the most energy-intensive sectors of the digital economy,”[vi] said Jason Feist, senior vice president of cloud marketing, Seagate. “This calls for a fundamental shift in how we think about data infrastructure – not as a trade-off between cost and sustainability, but as an opportunity to optimize for both.”[vii]
"Sustainability cannot be solved in isolation. A holistic approach spanning infrastructure, life cycle management, and industry-wide accountability could ensure that the growth of AI and data centre operations does not come at the expense of the environment,"[viii] he added.
[i] Executive summary – Energy and AI – Analysis - IEA
[iii] Ibid
[iv] New Energy Outlook 2025 | BloombergNEF | Bloomberg Finance LP
[v] The Decarbonizing Data Report | Seagate UK
[vii] Ibid
[viii] Ibid
Lauren has extensive experience as an analyst and market researcher in the digital technology and travel sectors. She has a background in researching and forecasting emerging technologies, with a particular passion for the Videogames and eSports industries. She joined the Critical Information Group as Head of Reports and Market Research at GRC World Forums, and leads the content and data research team at the Zero Carbon Academy. “What drew me to the academy is the opportunity to add content and commentary around sustainability across a wealth of industries and sectors.”
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