AI’s Growing Energy Footprint: The Hidden Cost of Our Digital Future

It’s time to talk about Artificial Intelligence (AI), and its possible impact on the environment. Convenient as it may be, AI is an energy hog. A single ChatGPT query requires 2.9 watt-hours of electricity, compared with 0.3 watt-hours for a Google search, according to the International Energy Agency.

At present, data centers worldwide consume 1-2% of overall power, but this percentage will likely rise to 3-4% by the end of the decade. With current energy solutions this may lead to a doubling of carbon dioxide emissions caused by data centers by the end of the decade.

As AI becomes more and more entangled in our lives, data centres are going to end up the holy grounds for the AI bubble. More and more datacentres are going to be built, as is evident by firms like Microsoft investing billions into datacentre projects. As Moore’s law continues to die a slow death, power usage is expected to rise more so than the last decade.

With falling storage costs suggesting utility storage costs to reach lows of $300/kWh by 2030, renewables might end up becoming the most viable sources for powering these energy guzzlers. Not that there is an option. Sustainability-facing companies like Apple integrating AI features into their devices seems to suggest that big moves regarding renewable energy harvesting and storage for data centre usage will be coming sooner rather than later.

Players in the industry like Goldman Sachs see an opportunity for renewable energy amongst the AI boom equaling nearly $1 trillion, pointing out that Data Centre power usage worldwide is expected to reach levels equivalent to the Netherlands, Portugal and Greece Combined. Total electricity consumption in the U.S. is expected to surge by 20% through the end of the decade, according to an April Wells Fargo Research note. Additionally, the United States are expected to invest about $50 billion into new generation capacity just to support data centers by 2030. Europe is expected to invest nearly $920 billion into renewable power generation by the end of the decade. All in all, data centre growth looks to be just the spark that was needed to fast-forward renewable energy adoption worldwide.

Having recently acquired OpenAI, Microsoft looks to integrate ChatGPT into its new line of ARM powered laptops. To meet the expected load from the sales of these devices, the tech giant is investing heavily in datacentres. Additionally, a $10 billion deal has been signed with Brookfield Asset management to develop renewable energy capacity, with Brookfield promising 10.5 gW of renewable energy for Microsoft between 2026 and 2030. The first of its kind global framework agreement has set records as the biggest corporate power-purchase agreement ever signed, coming in at eight times higher than second place. The deal comes in as part of Microsoft’s goal of reaching 100% zero-carbon energy purchases by 2030. Currently, Microsoft has PPAs covering nearly 1gW of renewable energy from Brookfield. In addition to wind and solar, the agreement will focus on new and impactful carbon-free energy generation technologies.

Data Centres 

Data centre firms in India are looking to play catch-up as well, with companies like Hyderabad-based CtrlS looking to adopt solar power for a majority of their power requirements. CtrlS Datacentres Limited has installed a building-integrated solar plant at its Mumbai data centre, offsetting 620 tonnes of CO2 emissions annually. The company plans to implement captive solar power plants with a total capacity of 200 mW. The datacentre behemoth also looks to invest over $2 billion in the next three to four years to increase its datacentre capacity from 234 megawatts to over a gigawatt. With power requirements this high, CtrlS will most likely be looking to renewables.

Eager to not be left out, telecom providers Airtel and Jio have joined into the renewable race as well, with Airtel having signed a PPA to source electricity from a 9mW hydropower plant for its data centres in Delhi along with a partnership with Avaada Energy to source solar power from 65 mW of solar PV assets. Reliance Jio plants to build a solar-powered data center in Uttar Pradesh at an investment of almost $1 billion. The behemoth that is Adani En­terprises Limited has also partnered with EdgeConneX to develop 1 GW of data centre capacity that will be power­ed by renewable energy.