Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Register

6 July 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

The case for the $3 million super tax

The Government's proposed tax has copped a lot of flack though I think it's a reasonable approach to improve the long-term sustainability of superannuation and the retirement income system. Here’s why.

7 examples of how the new super tax will be calculated

You've no doubt heard about Division 296. These case studies show what people at various levels above the $3 million threshold might need to pay the ATO, with examples ranging from under $500 to more than $35,000.

The revolt against Baby Boomer wealth

The $3m super tax could be put down to the Government needing money and the wealthy being easy targets. It’s deeper than that though and this looks at the factors behind the policy and why more taxes on the wealthy are coming.

Meg on SMSFs: Withdrawing assets ahead of the $3m super tax

The super tax has caused an almighty scuffle, but for SMSFs impacted by the proposed tax, a big question remains: what should they do now? Here are ideas for those wanting to withdraw money from their SMSF.

The super tax and the defined benefits scandal

Australia's superannuation inequities date back to poor decisions made by Parliament two decades ago. If super for the wealthy needs resetting, so too does the defined benefits schemes for our public servants.

Are franking credits hurting Australia’s economy?

Business investment and per capita GDP have languished over the past decade and the Labor Government is conducting inquiries to find out why. Franking credits should be part of the debate about our stalling economy.

Latest Updates

Superannuation

Here's what should replace the $3 million super tax

With Div. 296 looming, is there a smarter way to tax superannuation? This proposes a fairer, income-linked alternative that respects compounding, ensures predictability, and avoids taxing unrealised capital gains. 

Superannuation

Less than 1% of wealthy families will struggle to pay super tax: study

An ANU study has found that families with at least one super balance over $3 million have average wealth exceeding $19 million - suggesting most are well placed to absorb taxes on unrealised capital gains.   

Superannuation

Are SMSFs getting too much of a free ride?

SMSFs have managed to match, or even outperform, larger super funds despite adopting more conservative investment strategies. This looks at how they've done it - and the potential policy implications.  

Property

A developer's take on Australia's housing issues

Stockland’s development chief discusses supply constraints, government initiatives and the impact of Japanese-owned homebuilders on the industry. He also talks of green shoots in a troubled property market.

Economy

Lessons from 100 years of growing US debt

As the US debt ceiling looms, the usual warnings about a potential crash in bond and equity markets have started to appear. Investors can take confidence from history but should keep an eye on two main indicators.

Investment strategies

Investors might be paying too much for familiarity

US mega-cap tech stocks have dominated recent returns - but is familiarity distorting judgement? Like the Monty Hall problem, investing success often comes from switching when it feels hardest to do so.

Latest from Morningstar

A winning investment strategy sitting right under your nose

How does a strategy built around systematically buying-and-holding a basket of the market's biggest losers perform? It turns out pretty well, so why don't more investors do it?

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.