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IEA Report Highlights AI’s Dual Role in Clean Energy Progress and Power Demand Surge

The International Energy Agency (IEA) has released a new report titled "Energy and AI", exploring how Artificial Intelligence (AI) can transform the global energy system while also raising significant power demand and security challenges.

AI offers powerful tools to accelerate clean energy and decarbonization—from optimizing power grids and forecasting energy demand to enabling smarter deployment of renewables. However, the report warns that AI-driven growth in data centres will significantly increase global electricity consumption. By 2030, data centre power demand is expected to more than double to 945 TWh—more than Japan’s current electricity use.

AI is the main driver behind this surge. In countries like the US, Japan, and Malaysia, data centres could account for up to half of electricity demand growth. By the decade’s end, the US may use more power for data centres than for all its energy-intensive industries combined.

Renewables and natural gas are expected to meet this growing demand due to their cost-efficiency. However, risks such as cyberattacks, critical mineral shortages, and grid congestion could delay 20% of data centre projects.

Despite challenges, AI is already helping energy firms improve efficiency, security, and sustainability—signalling the need for deeper cooperation between the tech and energy sectors.