AI to drive 160% increase in data centre power, European grid issues
Data centre power requirements are set to almost double by 2030 putting significant pressure on the European power grid, according to the latest figures from Goldman Sachs Research.
The demand for AI and cloud services is driving data centre power demand from 400TWh, or 1 to 2% of overall power, but this ratio will likely rise to 3-4% by the end of the decade to over 1000 TWh, up 160%.
This kind of spike in power demand hasn’t been seen in the US since the early years of this century, says Goldman Sachs. This will be driven partly by electrification and industrial reshoring, but also by AI.
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Between 2023 and 2033, thanks to the expansion of data centers, Europe’s power demand could grow by 40% and perhaps even 50%, according to Goldman Sachs Research. Today, around 15% of the world’s data centers are located in Europe. By 2030, the power needs of these data centers will match the current total consumption of Portugal, Greece, and the Netherlands combined.
Europe has the oldest power grid in the world, so keeping new data centers electrified will require more investment. The analysis expects nearly €800 billion ($870 billion) in spending on transmission and distribution over the coming decade, as well as nearly €850 billion in investment on solar, onshore wind, and offshore wind energy.
Data centres will use 8% of US power by 2030, compared with 3% in 2022. US utilities will need to invest around $50 billion in new generation capacity just to support data centers alone. Microsoft’s latest sustainability report cites the growth in demand for AI as a reason why it will struggle to hit its 2030 environmental targets, even thought 100% of its data centre power is from renewable sources.
However the analysis does not appear to take into account improvements in the efficiency of power supplies over the timeframe to reduce the overall power consumption. Improving power conversion efficiency from 98% to 99.5% with gallium nitride switching at higher frequencies over 2MHz can reduce the conversion losses by two thirds.
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