Data centers now attract larger investments than finding new oil supplies

If there is any question about whether data centers are driving the global economy, a new report from the International Energy Agency (IEA) should dispel any doubts. This year, the world will spend $580 billion on data centers, $40 billion more than it will spend on new oil supplies.

“This point of comparison provides a clear sign of the changing nature of modern, highly digitized economies,” the agency said in its report. a report.

Electricity consumption from AI data centers is expected to grow five-fold by the end of the decade, doubling the total consumption of all data centers today. Traditional data centers will also consume more power, although the increase will not be nearly as significant.

Half of this demand growth is expected to occur in the United States, with the bulk of the rest occurring in Europe and China, the IEA said.

The agency said that most new data centers are being developed by large cities with populations of more than 1 million people. Half of those projects under implementation are at least 200 megawatts, and most of them are being built near other data centers.

“This rapid construction of data centers – especially in clusters and around urban areas – comes with challenges,” the IEA wrote. “Network congestion and connection queues are increasing in many regions, and connection queues for new data centers are often already long.”

In some markets, like Northern Virginia, the wait to connect to the network can be up to a decade. In Europe, Dublin has halted new interconnection requests entirely until 2028.

The grid’s supply chain represents another weak point, with cables, critical metals, gas turbines and transformers delaying upgrades, the agency said.

Some companies like Ampersand and Heron’s powerare working on solid-state inverters, which are a major upgrade to the century-old technology that currently runs parts of the network. It can integrate renewables more adroitly, react quickly to grid instability, and can handle a range of conversions. But the first deployments will take at least a year or two, and it will take time to ramp up production.

The International Energy Agency expects renewables to provide the majority of new energy for data centers by 2035, regardless of whether countries maintain their current policies or more aggressively seek to reduce emissions. Solar energy, the cost of which has fallen significantly in recent years, has become an energy source Particularly favourite From the developers.

Over the next decade, about 400 terawatt-hours of electricity for data centers will come from renewable energy sources, while natural gas will provide about 220 terawatt-hours. If small nuclear power plants deliver on their promises, the IEA expects they will contribute 190 terawatt-hours to data centers.