The International Energy Agency (IEA) has published a flagship report that explores the transformational role of artificial intelligence (AI) in the energy sector. The report argues that while AI is driving a surge in demand for electricity from data centers around the world, it also has the potential to unlock significant opportunities to reduce costs, boost competitiveness, and cut emissions.

The IEA’s World Energy Outlook Special Report on ‘Energy and AI’ draws from new global and regional modeling and datasets, as well as consultation with governments and policymakers, the technology sector, the energy industry, and international experts.

According to the report, electricity demand from data centers worldwide is projected to more than double by 2030 to 945 terawatt-hours (TWh) – around the electricity amount the whole of Japan consumes today. Meanwhile, electricity demand from AI-optimized data centers is anticipated to more than quadruple in the same timeframe.

In the US alone, power consumption by data centers is expected to be responsible for almost half of the increase in electricity demand between now and 2030. It is expected that the US economy will consume more electricity in 2030 for processing data than for manufacturing all energy-intensive goods combined, including aluminum, steel, cement, and chemicals.

In advanced economies more generally, data centers are expected to account for more than 20% of the surge in electricity demand between now and 2030, driving growth in the power sector after years of stagnating or falling demand.

The report acknowledges the many unknowns surrounding AI and the energy sector, ranging from macroeconomic uncertainties to questions around how quickly AI will be adopted or what its most popular applications will be.

The report highlights that while AI could exacerbate some energy security concerns, it could help address others. For example, because of AI, cyberattacks on energy utilities have increased and become more sophisticated in the past four years – but it is also thanks to AI that energy companies are better able to defend themselves against such attacks. Among other energy security issues, the report flags the increasing demand for critical minerals that are used in the equipment for the data centers powering AI.

The findings further reveal that the increase in emissions expected from the growing demand for electricity from data centers will be small and could be offset by emissions reductions driven by widespread adoption of AI. Increasingly integral to scientific discovery, AI could also accelerate innovation in energy technologies such as batteries and solar PV, according to the report. 

Recommendations suggest that to benefit from the potential of AI, countries should rapidly accelerate new investments in electricity generation and grids, improve data centers’ efficiency and flexibility, and enhance the dialogue between policymakers, the tech sector, and the energy industry.

The report builds on the Global Conference on Energy and AI the IEA convened in December 2024 and the IEA’s contributions to the AI Action Summit in February 2025. It was launched on 10 April 2025. [Publication: Energy and AI] [Executive Summary] [Publication Landing Page] [IEA Press Release]