AI will chew through the same amount of energy as Japan by 2030

Nuclear power station cooling towers, similar to those at the Susquehanna nuclear power station in Pennsylvania next to the Cumulus data center owned by AWS.

(Image credit: Getty Images)

published 17 April 2025

The energy demand of AI data centers will top that of Japan by the end of the decade, new research shows – and that’s providing that energy grids can even keep up.

A new report from the International Energy Agency (IEA), which sought to quantify the impact of AI on energy networks, noted that investment in data centers has nearly doubled since 2022, with data center electricity use up by 12% since 2017.

That's set to double by 2030, largely driven by the rise of AI as the tech industry steams ahead with adoption.

"Global electricity demand from data centers is set to more than double over the next five years, consuming as much electricity by 2030 as the whole of Japan does today," said IEA Executive Director Fatih Birol.

Varied demand

The IEA report noted that a typical AI data center consumes as much electricity as 100,000 households — but the largest under construction now may chew through 20 times as much.

However, the report noted that data centers are just one driver behind the growth of global electricity demand, making up about one-tenth of that demand — less than industrial motors, air conditioning, and electric vehicles.

Developing economies may see less impact from data centers, as their electricity demand growth was already high; advanced economies, which had largely stagnant electricity demand, will experience a more dramatic impact.

"The effects will be particularly strong in some countries," Birol added. "For example, in the United States, data centers are on course to account for almost half of the growth in electricity demand; in Japan, more than half; and in Malaysia, as much as one-fifth."

The report noted that in the US, by the end of the decade, data centers will use more electricity than aluminum, steel, cement, chemicals, and all other energy-intensive goods combined.

Energy grids are creaking

The IEA warned that strain on electricity grids could delay as many as a fifth of data center projects, noting that there are already long waits for connecting to grids and access to critical grid components such as transformers and cables. For gas generation, turbine deliveries already face lead times of several years.

"If the electricity sector does not step up, there is a risk that meeting data center load growth could entail trade-offs with other goals such as electrification, manufacturing growth or affordability," the IEA said.

This isn’t an issue isolated to the US, either. Last year, the head of the UK’s National Grid warned the country’s energy network was already struggling to keep up with rising demand - and that’s a trend expected to continue across the decade unless major investment is secured to facilitate upgrades.

One solution presented by the IEA included choosing better locations for new data centers, looking for opportunities in areas with power and grid availability.

"Grid operators could also examine incentives to locate data centers in areas where grids are less constrained," the IEA said. "We find that 50% of data centers under development in the United States are in pre-existing large clusters, potentially raising risks of local bottlenecks.

Beyond those direct concerns, the IEA also warned about security. Attacks on critical national infrastructure have increased rapidly in recent years, and with data centers now representing a crucial cog in the modern economy, the risks are growing.

"Cyber attacks on energy utilities have tripled in the past four years and become more sophisticated because of AI," the IEA said in a post. "At the same time, AI is becoming a critical tool for energy companies to defend against such attacks."

AI could be the curse and the cure

AI could help address some of these challenges by optimizing existing sources, reducing consumption, and boosting grids — such efforts are already in place, with the UK government's AI Energy Council tapping AI leaders including Microsoft, Google, and Amazon to help tackle local energy concerns.

The report said that AI-based fault detection could reduce outage durations by 30-50%, while remote sensors paired with AI management could increase the capacity of existing transmission lines.

"Up to 175 gigawatts (GW) of transmission capacity could be unlocked if these tools are applied, without any new lines being built," the report said.

Perhaps highlighting the impact of AI, the IEA also unveiled a new AI agent to help answer questions on the report's contents, though it warns that "AI can make mistakes, and you should verify the answers independently with the original source materials."