The AI dilemma: Energy demand for data centers triples, can our power grid handle it?

Making everything faster, easier and cheaper: the promise of artificial intelligence is no small thing. AI seems to be the solution to all our problems. But innovation comes at a price. The impact of AI on our energy consumption is becoming increasingly clear. Do the benefits still outweigh the costs?

To properly weigh the costs and benefits of AI, we must first look at the precise climate impact of the technology. The use of AI mainly affects the energy consumption of data centers, of which there are some thousands operating worldwide (some two hundred of them in the Netherlands). Those data centers house servers, with so-called graphics processing units (GPUs) on which ChatGPT and the other AI models run.

Those chips provide enormous amounts of computing power, and that requires energy. That's true both for training models and for their subsequent use. Whereas the power of a server cabinet in a large data center was 10 to 15 kilowatts before the AI boom, now it is between 40 and 60 kilowatts. On top of that comes energy consumption for things like server cooling.

Data centers are also being added at a rapid pace and are getting bigger. For example, OpenAI, the company behind ChatGPT, wants to build a data center in Abu Dhabi that is three times as big as the Efteling.

According to the International Energy Agency, data centers worldwide consumed 415 terawatt hours (or 415 billion kilowatt hours) of energy in 2024. Over the next few years, that is estimated to double to about 945 terawatt hours by 2030. By comparison, that's about the same amount of electricity that Japan now produces annually.

This increase is due in particular to AI. Former Google CEO Eric Schmidt predicts even that the energy consumption of data centers in the U.S. will go from 3 to 99 percent of the total electricity generated.

In the Netherlands, data centers consumed 5,100 gigawatt hours of electricity in 2024. That is equal to the electricity consumption of nearly 2 million homes, reports the CBS. Data center consumption thus accounts for 4.6 percent of the Netherlands' total electricity consumption. In 2021, it was still 3.3 percent.

In scenarios of grid operator TenneT, demand from Dutch data centers grows from just under 10 terawatt-hours in 2025 to 24 to 29 terawatt-hours by 2030, with the sector's share rising from about 5 percent of national consumption now to about 15 percent in the future.