Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Register

30 June 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

Australian house prices close in on world record

Sydney is set to become the world’s most expensive city for housing over the next 12 months, a new report shows. Our other major cities aren’t far behind unless there are major changes to improve housing affordability.

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.

Latest Updates

Planning

Will young Australians be better off than their parents?

For much of Australia’s history, each new generation has been better off than the last: better jobs and incomes as well as improved living standards. A new report assesses whether this time may be different.

Superannuation

The rubbery numbers behind super tax concessions

In selling the super tax, Labor has repeated Treasury claims of there being $50 billion in super tax concessions annually, mostly flowing to high-income earners. This figure is vastly overstated.

Investment strategies

A steady road to getting rich

The latest lists of Australia’s wealthiest individuals show that while overall wealth has continued to rise, gains by individuals haven't been uniform. Many might have been better off adopting a simpler investment strategy.

Economy

Would a corporate tax cut boost productivity in Australia?

As inflation eases, the Albanese government is switching its focus to lifting Australia’s sluggish productivity. Can corporate tax cuts reboot growth - or are we chasing a theory that doesn’t quite work here?

Are V-shaped market recoveries becoming more frequent?

April’s sharp rebound may feel familiar, but are V-shaped recoveries really more common in the post-COVID world? A look at market history suggests otherwise and hints that a common bias might be skewing perceptions.

Investment strategies

Asset allocation in a world of riskier developed markets

Old distinctions between developed and emerging market bonds no longer hold true. At a time where true diversification matters more than ever, this has big ramifications for the way that portfolios should be constructed.

Investment strategies

Top 5 investment reads

As the July school holiday break nears, here are some investment classics to put onto your reading list. The books offer lessons in investment strategy, financial disasters, and mergers and acquisitions.

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.