AI Data Centers Under Pressure Amid Rising Energy Consumption

The rapid growth of artificial intelligence (AI) is driving an exponential increase in the energy and water consumption of its infrastructure. A British report highlights the need for tech companies to better regulate the impact of their data centers.

Share:

The swift expansion of computing power required for AI models is fueling an unprecedented energy demand. Data centers, essential to AI operations, could account for 3% of global electricity consumption by 2030, according to a Deloitte study. This rising consumption raises concerns about the sector’s sustainability and the need for stricter oversight.

Soaring Energy Consumption

AI development relies on the massive expansion of data centers, driven by ever-increasing computing power. This growth comes at a cost: these facilities could soon consume as much electricity as France and Germany combined. Managing the energy footprint of these infrastructures is becoming a strategic issue for governments and tech corporations.

Experts from the National Engineering Policy Centre (NEPC), an independent UK organization, recommend improving transparency on the energy and water consumption of data centers. The current lack of precise data prevents a comprehensive assessment of their impact and complicates the implementation of effective regulations.

Mounting Pressure on Water Resources

Beyond electricity consumption, cooling these infrastructures requires vast amounts of water. According to a study by American researchers, data centers’ water usage could increase four to six times by 2027, reaching levels comparable to Denmark’s annual consumption.

In response, the NEPC report’s authors argue that public authorities must impose environmental standards to limit potable water usage and optimize cooling systems. Implementing stricter regulations could encourage companies to invest in more efficient, resource-conscious technologies.

Towards Stricter Industry Oversight

As tech firms continue their expansion, pressure is mounting to regulate their environmental impact. The NEPC’s recommendations call for mandatory reporting of energy and water consumption to enhance transparency within the sector.

Each request processed by ChatGPT, the conversational AI model developed by OpenAI, consumes approximately ten times more electricity than a Google search, according to the International Energy Agency (IEA). This figure underscores the energy challenges posed by AI growth and highlights the urgent need for improved resource management by industry players.

TotalEnergies is selling half of a 604 MW Portuguese energy portfolio to the Japanese consortium MM Capital, Daiwa Energy and Mizuho Leasing for €178.5mn, retaining operation and future commercialisation of the assets concerned.
Q ENERGY France secures a bank financing of €109 million arranged by BPCE Energeco to build four new energy production facilities, totalling 55 MW of wind and solar capacity by the end of 2024.
Shell announces amendment of two annual reports after notification by Ernst & Young of non-compliance with SEC auditor partner rotation rules; however, financial statements remain unchanged.
The Financial Superintendency of Colombia approves an amendment to Ecopetrol’s local bonds and commercial paper program, enabling issuance of sustainable, indexed, or in-kind repayable instruments.
ABO Energy is selling its subsidiary ABO Energy Hellas and an energy project portfolio of approximately 1.5 gigawatts to HELLENiQ ENERGY Holdings, thus refocusing its strategic resources towards other markets, notably Germany, without major financial impact anticipated for 2025.
Iberdrola announces a supplementary dividend of €0.409 per share for 2024 under the "Iberdrola Retribución Flexible" programme, bringing the total annual remuneration to €0.645 per share, representing a year-on-year increase of 15.6%.
BHP has signed contracts with COSCO Shipping to charter two ammonia-powered Newcastlemax bulk carriers, primarily for transporting iron ore between Western Australia and Northeast Asia starting from 2028.
CBAK Energy and Anker Innovations jointly launch a battery cell manufacturing facility in Malaysia, with a commercial potential estimated at $357 million, further strengthening their strategic partnership in the lithium-ion battery sector.
German energy group Badenova plans to invest $4.64 billion in its energy networks and capacity by 2050, including $232 million committed from 2025, according to the company's recently published annual financial results.
ORIX announces the sale of the majority of its stake in Greenko to AM Green Power and commits a new USD 731mn investment in the Luxembourg-based AMG holding, confirming its strategic repositioning in next-generation energy.
Invenergy seals four further contracts with Meta to supply nearly eight hundred megawatts of solar and wind power to the group’s data centres, lifting total cooperation between the two companies to one point eight gigawatts.
Pedro Azagra leaves his role as CEO of Avangrid to become CEO of Iberdrola, while Jose Antonio Miranda and Kimberly Harriman succeed him as CEO and Deputy CEO respectively of the American subsidiary.
The US investment fund Ares Management enters Plenitude's capital by acquiring a 20% stake from Eni, valuing the Italian company at 10 billion euros and reinforcing its integrated energy strategy.
ENGIE secures a contract to reduce Airbus' industrial emissions in France, Germany, and Spain, targeting an 85% decrease by 2030 through various local energy infrastructures.
Alain Rhéaume, Chairman of Boralex’s Board of Directors for eight years, will leave his position by December, following the appointment of his successor by the governance committee of the Canadian energy group.
Norwegian group Statkraft plans an annual cost reduction of NOK2.9bn ($292 million) by 2027, citing possible job cuts amid rising financial burdens and volatility in the European energy market.
EDF merges EDF Renouvelables and its International Division into EDF power solutions, led by Béatrice Buffon, to optimise its global 31 GW low-carbon energy portfolio and strengthen its international positioning.
TotalEnergies announces a strategic partnership with Mistral AI to establish a dedicated innovation laboratory integrating artificial intelligence tools aimed at enhancing industrial efficiency, research, and customer relations.
The Energy Transitions Commission warns of economic risks tied to growing protectionism around clean technologies, while calling for global consensus on carbon pricing.
Baker Hughes has reached an agreement to sell its precision sensor product line to Crane Company for $1.15bn, thereby refocusing its operations on core competencies in industrial and energy technologies.