AI can boost efficiency in global electricity systems

Recent advancements in artificial intelligence (AI) and its increased adoption can help accelerate the global energy system’s transformation to net zero whilst meeting the projected 3–4 per cent per year increase in global electricity demand through 2030, a report said on Thursday.

Released by Adnoc, Masdar and Microsoft, the report, entitled ‘Powering Possible: AI and Energy for a Sustainable Future’, highlights how AI is critical for accelerating the net-zero energy transformation by boosting efficiencies, decarbonizing existing systems, and expanding carbon-free energy sources.

The electricity needed to power the data centres critical to AI and other digital services is expected to grow between 8–23 per cent per year through 2026, bringing AI use to 0.24 per cent of global electricity demand. “Despite $250 billion in private investments in AI between 2017 and 2023, only 5 per cent of that funding went to the energy sector,” the report noted.

According to the International Renewable Energy Agency (IRENA), the annual rate of deployment of renewable generation must grow by 16 per cent every year through 2030 to meet the tripling target. “To achieve this target, it is critical to address key challenges such as permitting, grid infrastructure, financing, and supply chain bottlenecks,” the report said.

The report highlights AI’s capacity to reduce methane emissions – a greenhouse gas that is 80 times more effective at trapping heat than carbon dioxide (CO2). Advanced AI tools being developed are anticipated to detect methane leaks with up to 20 per cent greater accuracy compared to legacy technologies. These innovations are expected to play a vital role in helping the energy sector achieve the Global Methane Pledge, which aims for a 30 per cent reduction in methane emissions by 2030.

The report also provides a roadmap to address AI-driven data centres’ rising energy demands, which are projected to nearly double their share of global electricity demand by 2026. While at a global scale, AI’s electricity consumption is relatively small, in some regions, electricity demand for data centres can be a large percentage of total load. For example, according to the IEA, in the European Union, where data centre electricity demand is expected to increase at ~9 per cent per year, demand could exceed 5 per cent of the total regional load by 2026. “Building on the significant progress already underway to bring more carbon-free energy online, the collaboration between the technology and energy sectors is crucial to ensuring that growing electricity demand is met through sustainable and carbon-free energy solutions. Masdar, the UAE’s clean energy champion, highlights within the report the opportunity for AI to transform the global clean energy industry, as the data centers the industry requires will serve as an increasingly important driver of global energy demand, adding that to meet this demand sustainably will require a multifaceted approach to unleash the full potential of AI,” a statement said.

Dr. Sultan Ahmed Al Jaber, Minister of Industry and Advanced Technology, Chairman of Masdar and ADNOC Managing Director and Group CEO, said: “We are at a pivotal moment for human progress driven by three megatrends: the rise of the Global South, the accelerated energy transition and the rapid growth of AI. AI is an era-defining innovation that is altering the pace of change itself – resetting the boundaries of productivity and the possibilities of progress. But in doing so, it is also creating a power surge that nobody accounted for just 18 months ago. By collaborating to solve AI’s near-term challenges, we can also unlock AI’s long-term benefits across the energy value chain, helping to secure a sustainable and prosperous future for generations to come.”

Brad Smith, Vice Chair and President, Microsoft said: “This new era calls on us to do two things at once: meet the AI moment while transitioning to a more sustainable economy. In a world that will need more electricity, not less, it’s imperative that we generate more carbon-free energy to power AI and use that very same technology to increase capacity, optimize transmission, and expand energy access to communities around the world. This isn’t a journey any of us can take alone. It requires working across technology, energy, science, and policy sectors to find solutions and accelerate our collective progress.”

The report identifies priority areas to increase collaboration between the energy and technology sectors can transform the energy system and unlock the full potential of AI. These include investing in AI for the energy transformation, expanding and enhancing grid capacity, building workforce capacity, developing AI with and for emerging economies, establishing data standards and advancing policy and governance principles.

AI capabilities have matured rapidly in recent years, and expectations are high. Investment in AI is projected to rise to $150 billion in 2025. "Technology and energy leaders must work together to ensure access to reliable carbonfree energy, a critical enabler for AI’s continued development and growth," a statement said.