Data Centers, AI, and Cryptocurrency Will Consume 2x Electricity By 2026 – ExtremeTech

Behind every web-based application, AI model, and cryptocurrency du jour is a busy data centerand behind each data center is a voracious rate of energy consumption. In a new report, the International Electricity Agency (IEA) writes that these industries rapidly require unprecedented amounts of electricity. Data centers, AI, and cryptocurrency are on track to double their strain on the energy grid by 2026.

The IEA is an independent organization that analyzes global energy consumption and then offers energy policy recommendations based on that analysis. In this weeks Electricity 2024 report, the IEA writes that data centers, AI, and crypto collectively consumed 460 terawatt hours (TWh) of electricity in 2022, comprising nearly 2% of the worlds energy demand. With interest in all three categories increasing yearlyyes, even cryptothe IEA expects demand to climb to 800 TWh annually. Its model leaves some wiggle room, offering 600 TWh per year as a low case and 1,050 TWh per year as a high case, but actual demand will likely fall somewhere in the middle.

To put these numbers into perspective, the IEA says the additional strain on the worlds energy grid would be equivalent to adding at least one Sweden, or at most one Germany.

Data centers are resource-heavy, requiring energy for computing, cooling, and what the IEA calls associated IT equipment. These categories account for roughly 40%, 40%, and 20% of any data centers total electricity usage, respectively. As the world continues to rely on digital data, its only natural that the computers and cooling mechanisms responsible for maintaining that data will eat more electricity and that the worlds 8,000-plus data centers will grow in number.

Not surprisingly, AI is a major factor in technologys increased energy pull. The IEA anticipates that Google alone will experience a tenfold increase in electricity demand as it grows Bard, its large language model and ChatGPT competitor. Chatbots, image generators, and other AI-based tools dont just require a lot of energy to develop, train, and maintainthey also require a shocking amount of electricity to use, with just a few AI images consuming as much electricity as it takes to charge your smartphone.

Cryptocurrency is also expected to require more energy over the next two years despite efforts to achieve the opposite. The IEA confirms that Ethereum, the worlds second-largest cryptocurrency, successfully reduced its electricity consumption by 99% in 2022 by swapping its mining mechanism to the proof-of-stake model. Nonetheless, the organization anticipates that Bitcoin and other cryptocurrencies will require 40% more electricity as increases in other areas offset energy savings.

Figures like this are daunting, and for good reason. From electric vehicles to all the handheld gadgets we rely on throughout the day, the 21st century is rife with added stressors for the global energy grid. The IEA shared last year that the world will need 50 million additional transmission lines before 2040 to meet demand. But if theres any comfort to be gleaned here, its from the fact that renewable energy sources are gradually supporting more of the worlds energy needs and that new ways to extract energy are cropping up every year.

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Data Centers, AI, and Cryptocurrency Will Consume 2x Electricity By 2026 - ExtremeTech