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16 January 2026

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

  •   15 August 2024
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3 Comments
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!

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.

 

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