The world electricity market is undergoing profound changes as the industry leads the way in decarbonization and faces new consumption patterns. Cryptocurrency mining and artificial intelligence (AI) are expected to see big shifts in energy usage in coming years, according to the multinational intergovernmental International Energy Agency (IEA).
Not all the news about power consumption is bad, according to the IEA’s 2024 report, which forecasts usage through 2026. “Power generation is currently the largest source of carbon dioxide (CO2) emissions in the world, but it is also the sector leading the transition to net zero emissions,” the report said. Renewables will become the main sources of power in 2025.
The growth of consumption fell from 2.4% in 2022 to 2.2% in 2023 but is expected to rise to 3.4% through 2026. China and India will be major contributors to that growth.
Meanwhile, energy consumption by data centers, AI and crypto may more than double in that timeframe and exceed 1,000 terawatt-hours (TWh). A third of all data centers of all kinds are located in the United States.
AI will lead the way by far, with AI’s power consumption expected to increase tenfold between 2023 and 2026. ChatGPT alone is expected to consume almost 10 TWH per year in that period. Every ChatGPT request consumes nearly ten times the energy of a Google search.
One terawatt-hour could power 70,000 homes in the United States for a year. In the ongoing comparison with the nations of the world, that means crypto and the related consumers will reach the consumption level of Japan.
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Bitcoin consumed 120 TWh in 2023, out of a total of 130 TWh used in all cryptocurrency mining. The latter figure was up from 110 TWh in 2022 when it represented 0.4% of world energy consumption. The IEA predicted crypto mining will use 160 TWh by 2026.
Data centres are now the main drivers of electricity demand growth in many regions
And electricity consumption from the sector — along with AI & cryptocurrency — could double by 2026
Energy efficiency improvements will be key to address rising demand: pic.twitter.com/JOuORlMJnX
— International Energy Agency (@IEA) January 24, 2024
Despite the complex picture of energy consumption in flux, and the fact that crypto mining uses a very small portion of the world’s energy, the report singled out crypto as a cause for concern:
“Challenges in reducing electricity consumption remain, as energy savings can be offset by increases in other energy consuming operations, such as other cryptocurrencies [than Bitcoin], even as some become more efficient.”
Bitcoin mining reportedly uses 54.5% sustainable energy. Mining activity is picking up ahead of the Bitcoin halving, with many miners investing heavily in new equipment.
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