The upcoming boom in artificial intelligence may well have a double edge when it comes to the prospects for clean energy, according to market experts. AI’s surge into more mainstream relevance is rapidly growing away from its exclusive home in the tech industry, especially when it comes to the massive energy requirements of data centers that will power AI development.
Ed Crooks, vice-chair for the Americas at Wood Mackenzie, issued a statement at the Energy Disruptors Unite conference in Calgary as saying, “Anything you do with AI consumes a lot of power.” He proposed an example that to draw an image using AI would take about 10,000 times more energy than simply searching on Google. International Energy Agency Reports from the International Energy Agency show that for the year 2022, the world’s data centers consumed about 1.4 percent to 1.7 percent of the total global electricity; this is expected to double to 2.5 percent of the global electricity by 2026 with the driving growth in AI workloads.
This, in return, will contribute to a peak 50 percent increase in North American electricity demand by 2050. In fact, that growth will come not just from the increase in data centers, but also from the adoption of electric vehicles and even electrification of home heating in the United States.
In Canada, utilities are reworking the forecasts in preparation for the expected growth in AI electricity demand as an estimated 239 data centers are already in operation. Hydro Quebec, for instance, expects electricity demand from data centers to rise to 4.1 terawatt-hours between 2023 and 2032-the equivalent of about two percent of the province’s electricity production in 2022.
New natural gas-fired power plants are the easiest and cheapest way for AI to meet its electricity needs, according to Crooks. But the problem remains that countries need to get off natural gas to meet global climate targets. “If by 2050 we are using more natural gas than we are today, and it continues to grow, it will have serious implications for climate change,” he warned.
There is something to be positive about when looking at the potential upside for Canada’s natural-gas producers, especially amid currently low commodity prices. The companies such as Enbridge Inc. and TC Energy Corp. are beginning to consider revenue from increased electricity demand data centers may bring.
Major tech firms have been becoming more attentive to their increasing energy needs and start investment in direct power infrastructure. Amazon, Meta, and Google have turned into big corporate buyers of wind and solar power and are now actively contributing to the growth of the renewable energy market. Of course, Google is investing in a geothermal project in Nevada to provide zero-carbon electricity for its data centers, while Microsoft has agreed to a 20-year power purchase agreement to resume a nuclear power unit at Three Mile Island in Pennsylvania.
Ana Domingues, EY’s global leader for all energy and resource AI initiatives, sounds hopeful that the energy-related needs of AI might accelerate the speed at which investment goes into clean energy technologies of the future, given the financial muscle of leading firms. But she noted, developments involving these technologies take time, so by that time AI may bring significant pressures on global electricity grids.
