According to the IEA, electricity consumption from data centres, artificial intelligence (AI) and the cryptocurrency sector could double by 2026. Factor in the global push to EVs.
Please consider the International Energy Agency IEA Electricity Analysis Report 2024-2026.
IEA Notable Points
- Global electricity demand rose moderately in 2023 but is set to grow faster through 2026
- Global electricity demand is expected to rise at a faster rate over the next three years, growing by an average of 3.4% annually through 2026.
- Electricity consumption from data centres, artificial intelligence (AI) and the cryptocurrency sector could double by 2026.
- About 85% of additional electricity demand through 2026 is set to come from outside advanced economies
- China provides the largest share of global electricity demand growth in terms of volume, but India posts the fastest growth rate through 2026 among major economies.
- EU electricity consumption is not expected to return to 2021 levels until 2026 at the earliest. Electricity prices for energy-intensive industries in the European Union in 2023 were almost double those in the United States and China.
- Despite energy prices falling from their previous record highs, EU electricity demand further declined in 2023. Lower industrial electricity demand was the most important factor, as in the previous year.
- Renewables are set to provide more than one-third of total electricity generation globally by early 2025, overtaking coal. The share of renewables in electricity generation is forecast to rise from 30% in 2023 to 37% in 2026, with the growth largely supported by the expansion of ever cheaper solar PV.
- By 2025, global nuclear generation is forecast to exceed its previous record set in 2021.
- Global CO2 emissions from electricity generation are expected to fall by more than 2% in 2024 after increasing by 1% in 2023.
Data Centers
We estimate that data centres, cryptocurrencies, and artificial intelligence (AI) consumed about 460 TWh of electricity worldwide in 2022, almost 2% of total global electricity demand. Data centres are a critical part of the infrastructure that supports digitalisation along with the electricity infrastructure that powers them. The ever-growing quantity of digital data requires an expansion and evolution of data centres to process and store it. Electricity demand in data centres is mainly from two processes, with computing accounting for 40% of electricity demand of a data centre. Cooling requirements to achieve stable processing efficiency similarly makes up about another 40%. The remaining 20% comes from other associated IT equipment.
There are currently more than 8 000 data centres globally, with about 33% of these located in the United States, 16% in Europe and close to 10% in China. US data centre electricity consumption is expected to grow at a rapid pace in the coming years, increasing from around 200 TWh in 2022 (~4% of US electricity demand), to almost 260 TWh in 2026 to account for 6% of total electricity demand. Growth will be driven by increased adoption of 5G networks and cloud-based services, as well as competitive state tax incentives.
Market trends, including the fast incorporation of AI into software programming across a variety of sectors, increase the overall electricity demand of data centres. Search tools like Google could see a tenfold increase of their electricity demand in the case of fully implementing AI in it. When comparing the average electricity demand of a typical Google search (0.3 Wh of electricity) to OpenAI’s ChatGPT (2.9 Wh per request), and considering 9 billion searches daily, this would require almost 10 TWh of additional electricity in a year.
In 2023, NVIDIA shipped 100 000 units that consume an average of 7.3 TWh of electricity annually. By 2026, the AI industry is expected to have grown exponentially to consume at least ten times its demand in 2023.
In 2022, cryptocurrencies consumed about 110 TWh of electricity, accounting for 0.4% of the global annual electricity demand, as much as the Netherland’s total electricity consumption. In our base case, we anticipate that the electricity consumption of cryptocurrencies will increase by more than 40%, to around 160 TWh by 2026. Nevertheless, uncertainties remain for the pace of acceleration in cryptocurrency adoption and technology efficiency improvements. Ethereum, the second largest cryptocurrency by market cap, reduced its electricity demand by an amazing 99% in 2022 by changing its mining mechanism. By contrast, Bitcoin is estimated to have consumed 120 TWh by 2023, contributing to a total cryptocurrency electricity demand of 130 TWh.
China
In China, the post-pandemic economic recovery paved the way for a strong increase in electricity demand of 6.4% in 2023, with the services and industry sectors experiencing the most robust rebound. With the country’s economic growth expected to slow and shift away from heavy industry, we forecast the pace of electricity demand growth to ease to 5.1% in 2024, 4.9% in 2025 and 4.7% in 2026, which is well below the average growth rate of 6.5% observed over the prepandemic period of 2016-2019. Electricity consumption per capita in China surpassed that of the European Union at the end of 2022. This is, however, propped up by the industry sector, as electricity use per household is still below that in the European Union. The rising consumption of electricity by Chinese households will remain a driver of electricity demand. Continued electrification of China’s industrial sector and strong growth in road transport (EV charging) accounts for an increasing share of China’s electricity demand over the forecast period. The rapid adoption of EVs, which now account for over 8% of the vehicles in the country, is markedly eroding growth in gasoline consumption in favour of electricity.
What About EVs?
Other than country-specific uses of EV including China there were only 6 mentions of EV in 170 pages, none of them for the US.
Artificial Intelligence’s ‘Insatiable’ Energy Needs Not Sustainable
The Wall Street Journal reports Artificial Intelligence’s ‘Insatiable’ Energy Needs Not Sustainable, Arm CEO Says
Rene Haas, chief executive of Arm, spoke ahead of an announcement Tuesday by the U.S. and Japan about a $110 million program to fund AI research at universities in the two countries. U.K.-based Arm and its parent, Tokyo-based SoftBank Group, are together offering $25 million in funding for the program.
AI models such as OpenAI’s ChatGPT “are just insatiable in terms of their thirst” for electricity, Haas said in an interview. “The more information they gather, the smarter they are, but the more information they gather to get smarter, the more power it takes.”
Without greater efficiency, “by the end of the decade, AI data centers could consume as much as 20% to 25% of U.S. power requirements. Today that’s probably 4% or less,” he said. “That’s hardly very sustainable, to be honest with you.”
the International Energy Agency said a request to ChatGPT requires 2.9 watt-hours of electricity on average—equivalent to turning on a 60-watt lightbulb for just under three minutes. That is nearly 10 times as much as the average Google search. The agency said power demand by the AI industry is expected to grow by at least 10 times between 2023 and 2026.
“It’s going to be difficult to accelerate the breakthroughs that we need if the power requirements for these large data centers for people to do research on keeps going up and up and up,” Haas said.
What’s Missing?
As noted the report barely touched on EVs with nothing on EVs in the US.
There were 13 mentions of the word “transformer” all related to weather related damage or the war in Ukraine.
There was no analysis of the need for more of them or updating the grid.
The deindustrialization of the EU is notable. But that will be replaced by exponential growth in India.
It’s nice that wind and solar are replacing coal but it would be faster and better to replace coal with nuclear and natural gas.
Note that Global CO2 emissions from electricity generation is only expected to fall by 2% in 2024 after increasing by 1% in 2023. Will it?
What happens when India and Africa industrialize?
There’s a lot of good and bad in the report but a lot that’s not covered as well. The infrastructure to handle a push to EVs and AI are not in place.
Those rooting for the end of fossil fuels by 2032 or even 2050 have no idea how foolish their demand are.
Good News
Looking for good news? I have some.
Please note Ford to “Re-Time” New EV Production, Expand Hybrid Production
EV adoption in the US is slowing.
If Trump wins the election, and I think that’s likely (See Trump Leads Biden in 6 of 7 Swings States, Pennsylvania is Key), he will set back EV adoption by years when he unwinds ridiculous EPA and Biden mandates.
In the EU, I expect a big anti-Green push in the upcoming European Parliamentary elections on June 6-9.
Back in the US, Tesla’s Deliveries Drop for First Time Since 2020, It’s Demand Not Supply
Finally, please note there are 4 Million Semis on the Road, Only 35 Class 8 Truck EV Charging Stations
Electrek says Tesla’s giga factory is only about 30% complete and Tesla hasn’t expanded the facility for years.
All of this is good news. The EV push is too fast. Neither the US nor EU is ready.
The cost of governmental reports is is inversely proportional to their usefulness. Lots of time and money went into this report and it takes 5 minutes to see its shortcomings. It provided jobs and economic activity but little useful information concerning delivering the energy we’ll need.
When they wheelchaired Biden into the Oval office in 2021, Biden promised he would depose Mohamed Bin Saud (aka “MBS” in western media) from power because a half wit Saudi reporter from the Bezos Post had been killed in Turkey. MBS laughed at every part of the story, but still welcomed Biden in Riyad to beg for more oil.
Then Biden promised to remove Putin from power, and exact the mother of all economic sanctions on Russia. Putin just got more election votes from Russians than Biden and Trump got combined from US voters (and Russians had options to vote none of the above or to just stay home). Even if Zuckerberg’s mail in “ballots” are counted, Putin still has more democratic support from his constituents than Biden has from illegal aliens.
Now Biden promises to depose Netanyahu from office. Third time must be a charm!
Officially, the President (Biden, not Obama or Harris) has commander and chief authority over the US military. He doesn’t have control over the army of insurrectionist lifetime bureaucrats at the DoE, EPA, and various transmission regulatory agencies. The lifetime bureaucrats know they can’t be fired unless their union goes the way of the UAW, so they can laugh at Biden’s energy pronouncements like the hollow threat they are.
Solar farms.can power many more data centers. These will become more efficient over time. The reason Nvidia was offered 3x market value for their real estate is it is extremely energy efficient and can scale.
I remember Nvidia stating unequivically that their previous generation of GPUs were not going to crypto miners… and then it came out Nvidia was selling GPU directly to crypto miners by the pallet load. Ergo why nvidia stock was trading below 200 about a year ago.
Now Nvidia says they aren’t selling to crypto miners! Again! They are selling pallets of GPU to Amazon, Google, Oracle and IBM data centers… who are leasing GPU time to octogenarian SP500 CEOs. The CEO’s figure they can cut headcount and costs, then raise their own bonuses. If they invest their bonuses into nvidia and amazon stock, they win twice! Sell nvidia and amazon to the TD ameritrade day traders at the top! Triple score!
In a few months, nvidia will admit the true demand for GPU is a function of software that can make use of it… and chatGPT has some serious limits that are just beginning to emerge from beneath the AI hype. Stock brokers will act just as surprised as they did when the crypto-mining “news” emerged.
Meanwhile, it doesn’t matter how efficient Casual Observer thinks the GPU are (or are reported to be by “journalism” majors). The US electrical grid is failing all over the place even under base loads
“Search tools like Google could see a tenfold increase of their electricity demand in the case of fully implementing AI in it.”
Will Governor Newsom kick Google out of California, so he can shut down the last nuclear power plant in the state? Net Zero or bust.
This report is about GLOBAL electricity growth, not USA growth or even G7 growth.
Assuming India, southeast Asia, Africa and Latin America raise their living standards (and energy use), this report is probably conservative. The thing is, those developing economies do not have eco-terrorists like the G7 — they will build economical energy generation (natural gas, coal, etc). The power will be used for basic things like refrigeration, LED lights at night, A/C (the ductless kind).
The G7 is not going to see much growth at all, because it doesn’t have the electrical grid to make it happen. Power generation “growth” has been negative. Transmission grids are radically inadequate. Transformers, just like lithium batteries, are made in China. Its absurd to argue about EVs that can’t be charged, or massive AI data centers envisioned by octogenarian CEOs who still can’t program a VCR and still don’t know VCRs are history.
Data centers have been built geriatric CEOs who think they can cut costs to increase their own bonuses… I’m surprised Mish (a retiree himself) is buying into the “economic growth” via slashing costs to increase CEO bonuses.
Davos’ attack on the west’s own energy industry is going to limit economic growth (and Davos’ global influence). Without low cost energy, the G7 economies will struggle to maintain any growth at all.
COSTCO GOLD SALES NUMBERS!
link to zerohedge.com
Had a cousin visit a few months back… along with her friend. One had tinnitus and hair loss after her Covid Booster… the other has extreme lethargy … both experiencing brain fog.
The friend admitted this and she hinted that she thought something was not right with this Covid thing…
She at one point said to us that she believes this is an end of times moment. No specifics but she clearly believed that there would be a very grim outcome.
The gold buying is a symptom of this dystopian outlook…. people can see young people dying from strokes, heart attacks, cancer… they see the athletes dropping on the pitch… they want to believe it is normal … and bbccnn is desperately trying to convince them that this is normal – it has always happened
But it hasn’t. Deep down most people know this is a lie.
Few will admit it — but what my cousin’s friend said out loud… is what a whole lot of people are thinking…
What most people do not know — and do NOT want to know… is the cause:
SEE PAGE 59 – THE PERFECTSTORM : The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy. Butt he critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel link to ftalphaville-cdn.ft.com
We must build more coal fired power plants to power all this Asinine Intelligence. Or, the Asinine Intelligences can just turn us into batteries … Wait a second …
At 300 watts each for short term output we are not very effective batteries.
100 watts is more reasonable.
link to princeton.edu
I can believe the demand forecast. But do not believe the supply source forecast as there would be tremendous political pressure to make that look good.
They cannot consume it unless someone builds the generating plants to create it. These days that is a bit problematical…..l
Hard work and common sense will always prevail. To spend this much energy on people who do not want to think for themselves is a travesty. It gets even worse in that this energy will be spent on exploiting those who do not want to think for themselves. The “don’t work hard, work smart” crowd who often times does no gainful work at all, is applauding this new technology’s capital gains, but the cosmos has a greater sense of humor than they have smarts. The problem for them will be with any degree of Dystopia they create, will cause their economic prowess will have an equal but opposite affect on survival. Be it health, pocketbook, peace or safety, no one leaves this world alive. Many young people I know see right through this and have already figured out they are smarter than AI. This is all a boomer thing, as they are falling for this the most because they only look at their net worth, and 401Ks as there success barometer. It reminds me of how boomers junked their Nikon film cameras for video cameras, and now the video cameras sit on a thrift store shelf, and nobody wants to buy them. AI is truely a generational Mal-investment of resources.
What happened to those Nikon and Canon film cameras?
Asking for a friend.
Is AI and the paperclip problem the answer to the Fermi Paradox?
AI and the paperclip problem | CEPR
Energy demand continues to grow, worldwide. Because of AI, EV, PHEV, Crypto, and a billion people who still want access to electricity, demand for electricity will grow faster than for other energies over the next several decades.
This extra electricity will come from whatever source is readily available. Since the extra demand cannot be met entirely by renewables and nuclear, coal and natural gas will still be in demand.
Emissions are unlikely to drop by much, if at all. Which means global warming will continue to get worse.
Got oil?
Global Warming is bs… it serves to vilify fossil fuels (better to vilify than to have the mob realize we are running low on affordable energy)
Let’s go Big Picture… I will now explain in detail… why EVs…. which are not in any way shape or form ‘Green’…. exist.
Why the Ministry of Truth runs endless hype campaigns on cnnbbc….and why governments subsidize them to the tune of hundreds of billions…
Consider this statement: We are steaming oil out of sand, drilling miles beneath oceans for oil, drilling hundreds of thousands of holes in the ground, dropping in bombs – then sucking up the dregs.
Surely — given we are completely reliant on fossil fuel energy to power our civilization — we should be concerned that these methods of oil extraction … appear to be … shall we say … desperate.
Surely any objective observer would look at this and think…. hmmm…. if there is so much of the easy stuff remaining … why are we doing these things
The thing is … we are desperate… see link to energyskeptic.com
So how do EVs fit into this equation … and renewable energy… and how about climate change????
These are what I refer to as The Three Pillars of Bullshit.
It goes like this… the Men Who Run the World need their barnyard animals to remain productive… positive… happy. If the animals were to get wind of the desperate situation with respect to energy … they would get spooked… in fact they would panic.
And panicked barnyard animals are NOT productive. If they conclude that the cheap and easy energy are on the downslope … they fall into despair. They begin to believer there is no future… why breed – why study – why invest — etc… alcoholism and drug abuse would explode higher … etc…
Barnyard animals MUST believe the future is awesome — they must believe their progeny will have the same opportunities to pillage and buy lots of stuff just like they did.
The Men Who Run the World – and their minions … are very much aware of this.
They need to cover up the desperation situation with some fancy PR.
One bright thing in the Ministry of Truth — which was tasked with the coverup … suggested inventing this thing call Global Warming (they changed it to Climate Change cuz some places were cooling .. no problem the barnyard animals will believe whatever cnnbbc tells them).
Notice how fossil fuels are The Enemy? How we Must wean off them? No mention of the fact that they are in deep depletion… that’s a no-no. Instead they are evil — we must ditch them…
Enter renewable energy — transitioning to renewables is IMPOSSIBLE link to en.wikipedia.org
Doesn’t matter. The Ministry of Truth overcomes this by pounding the barnyard animals with messaging (and catch phrases)… convincing them that we are on the path to a green wonderful future — where everyone gets to buy loads of stuff – HURRAH!!! HURRAH!!!
Let’s insert EVs here… ICE vehicles are EVIL. We must transition to EV’s … Zero Emissions. Well ya they are charged and manufactured with fossil fuels … But..BUT (hat tip to Jeff Green) … eventually we will phase out fossil fuels and go totally green.
Unfortunately… this is impossible link to en.wikipedia.org
Governments know this … the bosses of governments (The Men Who Run the World) know this … of course they do — they are not stupid.
But they also know that they MUST ensure that the barnyard animals remain hopeful … positive… productive…
They cannot be allowed to understand that we are f789ed.
THE PERFECT STORM (see p. 59)
The economy is a surplus energy equation, not a monetary one, and growth in output (and in the global population) since the Industrial Revolution has resulted from the harnessing of ever-greater quantities of energy. But the critical relationship between energy production and the energy cost of extraction is now deteriorating so rapidly that the economy as we have known it for more than two centuries is beginning to unravel link to ftalphaville-cdn.ft.com
“Global CO2 emissions from electricity generation are expected to fall by more than 2% in 2024 after increasing by 1% in 2023.”
I think that this is wishful thinking. I suspect that C02 emissions will go up and up and up, as China and others increasingly generate electricity from coal. I do agree with Mish that the solution is nuclear power.
That being said, I have not lost a moment of sleep over climate change. Any fearmongering over C02 emissions is simply that, fearmongering — which is a step toward totalitarianism.
Global GDP is tethered to the burning of fossil fuels. If we reduce the burn of fossil fuels that means growth has gone negative. If that persists the global economy will collapse and the Gates of Hell will Open
The New and Improved Totalitarianism – powered by CO2.
I suspect that energy cost will limit the application and availability of AI. If AI is a money loosing proposition, why offer it. Especially as inflation grinds on making people poorer and advertisers pull back.
Remember 3D printing? We were supposed to be able to print the parts of a bicycle … and assemble them.
AI is similar to that… it’s hype…
I remember only one accurate economic forecast. Keynes said “In the long term everybody will be dead”.
Long term is now the short term
The super-hyped AI will crash the Chinese economy as they try to keep up. Like the star wars waporware crashed the USSR in the 1980-ties. This time, the Wall Street did it.
China has twice as many engineers as the US does. Plus they have a real economy based on making things and not on fiscalization and fake government make work projects.
But roughly 3.5x the population.
So on a percentage of population basis, the US has a better ratio of engineers.
China will always have more of everything on a raw numbers basis because they have 3.5x the population.
Any way you count the US has way more lawyers.
I guess you have not seen all the ghost cities. And the collapsing property developers.
Is there something unfair to rest of consumers of energy for these enterprises to take away from the broader population? Why not require such enterprises to provide their own energy sources thus reducing demand to be allotted to the broader community at large? Or, Perhaps these enterprises should pay a handsome premium?
Perhaps I’m being picky, but something does not sit right with me about all this.
Jackdaws love my big sphinx of quartz.
Jackdaws are known for their love of sphinxes of all types.
Smoky quartz?
Yeeesh! In LA for top tier residential we are already paying $.625 a kWh plus taxes and fees. Much more of this and it’ll be worth installing off grid solar just to run my AC in the summer
It will never be worth doing anything; doing nothing is a far safer strategy.
Governor Gruesome forbid electric companies to trim trees around power lines. So homes in the forest burned to the ground. CA sued and bankrupted the power companies. You are not paying for electricity. You are paying for fire and bankruptcy insurance.
SCE is probably self insured. I’m referring to SCE, because Jackula lives in that territory. How bad have the fires been in SCE territory? I don’t know off hand. Also, can you point me to some backup for the assertion that the CPUC didn’t allow tree trimming? Basically, I’m doubting everything that KGB typed above, but I’ll be happy to be proved wrong.
Infuriating.
For a comparison to LA, I randomly selected Duke energy. It’s a big one, and l am aware they provide service in a lot of the Southeast. I googled Duke elec rates and then I randomly selected South Carolina.
RATE:
I. Basic Facilities Charge per month $11.96
II. Energy Charges For the first 1000 kWh used per month, per kWh 12.6545 ¢
For all over 1000 kWh used per month, per kWh 13.3448 ¢
link to the rates docs: link to duke-energy.com (the link doesn’t look right. you would expect SC somewhere in the URL)
Here’s Evergy, from eastern Kansas. Another random selection.
NET MONTHLY BILL, RATE: WCRS, WSRS, WCRSNM, WSRSNM, WCRSPG, WSRSPG, WCRSSLR, WSRSSLR
Customer Charge $14.25 ENERGY CHARGE
Winter Period – Energy used in the billing months of October through May. $0.08288 per kWh first 500 kWh $0.08288 per kWh
next 400 kWh $0.06775 per kWh additional kWh
Summer Period – Energy used in the billing months of June through September. $0.08288 per kWh first 500 kWh $0.08288 per kWh
next 400 kWh $0.09143 per kWh additional kWh Plus all applicable adjustments and surcharges.
Res customer on time of use (TOU)
Customer Charge: $14.25
ENERGY CHARGE:
Winter Period – Energy used in the billing months of October through May.
On-Peak: $0.21152 per kWh Off-Peak $0.06043 per kWh Super
Off-Peak $0.03022 per kWh
Summer Period – Energy used in the billing months of June through September O-Peak: $0.23790 per kWh
Off-Peak: $0.06797 per kWh
Super Off-Peak: $0.03399 per kWh Plus all applicable adjustments and surcharges.
I find all this pretty interesting. There are not doubt many reasons why Jackula’s paying so much, in SCE territory, what someone pays in South Carolina or Kansas. Also consider that folks in eastern Kansas or SC probably use a lot more electricity during the year for AC.
You don’t even have to go that far from LA, there are local municipal owned electric utilities that have the per kwh charges less than 20 cents (Turlock irrigation district, Merced irrigation district, Modesto irrigation district). I thought private sector was supposed to be better/more efficient than public, but clearly this is not the case with PG&E, SCE, or SDGE.
The thing I dislike most about electricity is that they won’t let you return it if it doesn’t work out for you.
“Margin debt levels, like valuations, are not useful as a market-timing device. However, they are a valuable indicator of market exuberance.
While it may “feel” like the market “just won’t go down,” it is worth remembering Warren Buffett’s sage words “The market is a lot like sex, it feels best at the end” link to realinvestmentadvice.com
It has to go down; it has to go up; looks like the system will tear apart doing that.
With Repubs generally seeing no problem with elec for crypto and AI (and the money they will make off of them), lets consider it just a 50/50. Demos get their elec cars and windmills, and Repubs get their next big income source/tax evasion all powered.
Bibble bobble bubble babble.