Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Register

25 March 2025

Home / White Papers 2024

AI and Electricity Demand: The Very Hungry Caterpillar

AI is a transformative technology with rapidly growing compute requirements that will significantly impact electricity demand well into the 2030s. This surge in demand, coupled with the increasing use of electric vehicles and the onshoring of manufacturing, will strain energy infrastructure, which has remained static from 2007 to 2022.

AI models’ immense need for electricity is evident from the 58% increase in demand by tech giants like Microsoft, Google, Amazon, and Meta between 2020 and 2022, primarily due to data center expansions. As data centers are major electricity consumers, their demand is expected to triple in the next decade, stressing generation capacity, transformers, and the T&D grid.

Without substantial investment and innovations in battery storage, small modular reactors, and efficient semiconductors, the electricity supply may lag behind demand, hindering AI progress and affecting innovation, productivity, national security, and equity markets.

This paper explores these challenges and their implications for energy infrastructure and investment.

Download the full paper

3 Comments
Dr David Arelette
August 19, 2024

In every gold rush there is somewhere an immutable Rate Determining Step - chemical reactions have one step which runs at a set rate, perhaps one molecule's outer electrons are more tightly packed at a lower energy level such that no matter how much core energy (heat and light) applied, the rate will not change. Same here, sun energy is limited by the sun's fusion rate and the side show effects of solar wind. Any time you see a Log graph start to worry, the 10 times every increment soon gets to a Trillion times and in scientific language, you are stuffed.

Cam
August 15, 2024

Did anyone say nuclear?
Our current plan seems to be to convert large chunks of farmland into solar farms. Of course we still need food, so somewhere trees will be cut down to open up new farmland, maybe here or maybe we'll export the jobs, deforestation and income overseas and get food from there.
If you've not seen a solar farm, head out of your capital city and have a look. Its thought provoking seeing these on good arable land. The local communities will value you visiting and there's a surprising number of quality tourist attracts to experience.

Mark
August 18, 2024

Cam… Nuclear power stations generate about 1Gw. Coal fired are around 2.5Gw. Apart from the massive costs and delays to built nuclear you are still going to have less than half the output. It’s just another spin on the old “climate change denier” rhetoric. Let’s just get on with it please!

 

Leave a Comment:

     
Firstlinks is sponsored by:
banner

Most viewed in recent weeks

16 ASX stocks to buy and hold forever, updated

This time last year, I highlighted 16 ASX stocks that investors could own indefinitely. One year on, I look at whether there should be any changes to the list of stocks as well as which companies are worth buying now. 

UniSuper’s boss flags a potential correction ahead

The CIO of Australia’s fourth largest super fund by assets, John Pearce, suggests the odds favour a flat year for markets, with the possibility of a correction of 10% or more. However, he’ll use any dip as a buying opportunity.

2025-26 super thresholds – key changes and implications

The ABS recently released figures which are used to determine key superannuation rates and thresholds that will apply from 1 July 2025. This outlines the rates and thresholds that are changing and those that aren’t.  

Is Gen X ready for retirement?

With the arrival of the new year, the first members of ‘Generation X’ turned 60, marking the start of the MTV generation’s collective journey towards retirement. Are Gen Xers and our retirement system ready for the transition?

Why the $5.4 trillion wealth transfer is a generational tragedy

The intergenerational wealth transfer, largely driven by a housing boom, exacerbates economic inequality, stifles productivity, and impedes social mobility. Solutions lie in addressing the housing problem, not taxing wealth.

What Warren Buffett isn’t saying speaks volumes

Warren Buffett's annual shareholder letter has been fixture for avid investors for decades. In his latest letter, Buffett is reticent on many key topics, but his actions rather than words are sending clear signals to investors.

Latest Updates

Investing

Finding the best income-yielding assets

With fixed term deposit rates declining and bank hybrids being phased out, what are the best options for investors seeking income? This goes through the choices, and the opportunities and risks involved.

Shares

What history reveals about market corrections and crashes

The S&P 500's recent correction raises concerns about a bear market. History shows corrections are driven by high rates, unemployment, or global shocks, and that there's reason for optimism for nervous investors today. 

Shares

The ASX is full of old, stodgy, low-growth companies

Eight of the ASX's top 10 stocks are more than a hundred years old, while in the US there's just one. It points to our market being filled with low-growth dinosaurs compared to the US where innovation and renewal rule.

Retirement

Time to review the family home's exemption from Age Pension test

Improving housing mobility in Australia is crucial for enhancing both individual well-being and the economy. Potential reforms include ensuring greater rental security and incentivising downsizing among older homeowners.

Superannuation

Death benefits from super don't need to be this complicated

This may surprise you, but a person's super balance does not automatically form part of their estate. A simple change could bring greater certainty to Australians, quicker payouts for families, and lower super fees.

Economy

The RBA deserves kudos for a job well done

Over the past few years, the Reserve Bank of Australia has been subjected to a blizzard of criticism. Yet, despite its flaws, it may just have engineered that rarest of beasts: the fabled soft economic landing.

Investing

Asia deserves a closer look from investors

As part of their global exposure, Australian investors typically allocate most to Developed Markets equities, and a smaller portion to Emerging Markets. This looks at the latter position and whether there might be a better way.

Sponsors

Alliances

Site Map

About Firstlinks

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.