Energy Consumption: Computers

 
Statista: How Energy Intensive are Computers

Jul 23, 2024

In 2022, the global electricity consumption stood at roughly 27,000 terawatt-hours, according to the U.S. Energy Information Administration (EIA). While countries like China and the United States had the highest electricity demand by a considerable margin, a new player that rivals the consumption of some of the biggest economies and is bolstered by the ongoing AI hype has entered the stage: data centers. As the International Energy Agency (IEA) points out in a recent report, estimated data center energy consumption could increase rapidly over the next two years.

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While the median estimate for data centers, AI-connected offerings and cryptocurrency mining stood at 415 TWh in 2022, already significantly higher than the United Kingdom's electricity demand and on par with the electricity consumption of France, this figure could rise to anything between 620 and 1,050 TWh in 2026. Per the IEA's report, this would be the equivalent "to adding at least one Sweden or at most one Germany" to the most recent estimates. Calculating the median estimated energy use, data centers and associated industries would rival the electricity demand of Japan, which as of 2022 had the fifth-highest in the world after China (8,540 TWh), the United States (4,128 TWh), India (1,463 TWh) and Russia (1,026 TWh).

Even though data centers are getting more energy-efficient and are required by law to do so in some countries like Germany, the increased demand fueled by the AI hype cycle might be too high to be fully mitigated. This is especially true for big tech companies like Alphabet, Amazon or Meta. The most recent Digital Economy Report by the UN suggests that data centers run by GAMAM companies alone were responsible for energy consumption of upwards of 90 TWh, more than countries like Finland, Belgium, Chile or Switzerland.

Alphabet's CO2 emissions, which are largely connected to an increase in data center activity, have risen by 48 percent compared to 2019. The company claims that "reducing emissions may be challenging due to increasing energy demands from the greater intensity of AI compute, and the emissions associated with the expected increases in our technical infrastructure investment" in its 2024 Environmental Report. Microsoft, which partnered with OpenAI to integrate its large language models into all of its products, reported CO2 emission increases of 30 percent compared to 2020.

Statista: Which Regions Have the Biggest Data Centers?

Dec 5, 2023

The rise of generative AI applications like ChatGPT, Midjourney or Bard already leads to increased demand in the world's data center network due to its sometimes hefty requirements for the underlying large language models. This computing demand will only increase in the upcoming years, necessitating the building of new data centers and expanding the capacities of existing ones. Our chart based on 2022 data collected by commercial real estate company Cushman & Wakefield shows that the race between the global superpowers China and the United States also extends to data centers.

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The highest concentration of data center power capacity can be found in Northern Virginia, particularly the counties of Loudoun and Prince William. According to an interview with the vice chairman of real estate service provider CBRE, Rob Faktorow, with radio broadcaster WTOP in 2022, the main reasons are tax incentives, superior connectivity and infrastructure well suited to the resource needs of big server farms. In this particular case, these server farms are likely powering U.S. government operations: Among others, the Department of Defense and the CIA are headquartered in the region. Coming in second is Beijing with a capacity of 1,800 megawatts, followed by London (1,000 megawatts) and Singapore (876 megawatts).

While the Greater Tokyo area only ranks fifth for current capacity, the island nation is on an accelerationist path in terms of future projects, especially compared to its competitors in the Asia-Pacific region. According to Cushman & Wakefield, Beijing's capacity will likely increase by around 300 megawatts in the next three to five years, owed partly to investors shifting funds due to rising U.S.-China tensions. The traditionally Western-aligned Japan might see its data power capacity double to almost 2,000 megawatts in the same period, in part due to pledges by big players like TSMC and Nvidia to build chip fabrication plants and establish a network of, as Nvidia CEO Jensen Huang put it, "AI factories" across the country.

Another relevant aspect in evaluating the growth potential of data centers in a specific region is their vacancy rate. As CBRE notes, capacity vacancy in Singapore stood at less than one percent in Q1 of 2023. Northern Virginia had a vacancy rate of about two percent, and Tokyo stood at 11.2 percent.