Data centers are becoming a growing concern as they are on track to consume as much electricity as the EU by 2030. This alarming forecast by ABI Research highlights the urgency of addressing the environmental impact of data centers. The research predicts over 24,000 data centers worldwide by the end of the decade, growing at a compound annual rate of 12%.
The projected electricity consumption for these data centers stands at 2,477 terawatt hours (TWh) annually, a stark jump from the 460 TWh recorded in 2022, as per the International Energy Agency (IEA). To put this in perspective, the EU’s total electricity consumption, with its vast population and economic output, was about 2,568 TWh in 2023. Such a comparison underscores the magnitude of energy that will be required by a relatively small number of data centers.
Rithika Thomas, a sustainable technologies senior analyst at ABI Research, explains the challenge: “Compute power of power-hungry GPUs and cooling are the most energy-intensive processes within the data center, amounting to 80 percent of the energy demand.” The rise of AI applications and models, contributing to 10-20% of data center electricity usage, exacerbates this issue as AI adoption continues to grow.
To mitigate the impact, integrating new retrofit technology into existing data centers and adopting responsible compute practices are essential. Thomas emphasizes the role of governments in promoting greener initiatives: “By establishing green building standards, incentivizing the use of renewable energy sources, regulating the use of cooling refrigerants, and supporting efficient e-waste management practices, governments are pushing the concept of sustainable data centers.”
While these measures are necessary, the hyperscale cloud market is enjoying significant growth. The Synergy Research Group reports a 22% year-on-year increase in global spending on cloud infrastructure services in Q2, reaching $79 billion, with Amazon Web Services (AWS), Microsoft, and Google leading the charge. The generative AI boom is a key factor behind this market acceleration.
Despite the economic and political challenges, the market’s strength continues to drive investment in cloud services. However, as data centers’ energy consumption raises sustainability issues, the industry must balance growth with environmental responsibility to ensure a sustainable future.
