AI Data Centres to Account for Significant Surge in Global Energy Demand by 2035 BP Reports

BP’s latest World Energy Outlook forecasts that data centres supporting artificial intelligence are set to account for ten per cent of the growth in global electricity demand over the next decade. With the United States leading the charge for AI adoption, BP estimates American data centres could represent up to forty per cent of the increase in national power usage by 2035. Data centre electricity consumption is expected to climb ninefold by the middle of the century, a shift described as an “important new source of energy demand” by BP’s chief economist Spencer Dale.

Total global electricity demand is projected to rise by more than forty per cent by 2035, doubling by 2050 if current trends hold. This increase will be powered principally by buildings and industrial applications, followed by the electrification of transport. Data centres, while a smaller category, will see their share grow from about one per cent of world electricity consumption in 2023 to nearly five per cent by mid-century.

BP’s analysis suggests that wind and solar will be responsible for meeting over eighty per cent of increased electricity needs by 2035. Hydropower and new nuclear installations are also forecast to see measured growth, but coal use will decline. Gas generation will expand to help fill the gap left by falling coal consumption.

Artificial intelligence may also have far-reaching consequences beyond merely powering data centres. On one side, it promises to materially boost global economic growth via productivity gains, potentially lifting world energy demand by as much as fifteen per cent by 2035. The productivity effect alone could prove twenty times larger than that created by data centre growth. Conversely, AI could drive substantial energy savings by improving efficiencies across sectors such as industrial manufacturing, logistics, and heating, though the ultimate impact remains deeply uncertain.

BP’s report highlights the persistent gap between the stated ambitions of the Paris climate agreement and the real trajectory of global carbon emissions. At present rates, BP expects emissions will fall only a quarter by 2050, compared to the ninety per cent cut needed to restrict global temperature increases to two degrees Celsius. The report notes that the world is on track to use up its remaining “carbon budget” by the early 2040s if emissions stay near current levels.

Regarding oil demand, BP now anticipates a slower decline than previously projected. The company attributes this to motorists holding on to older, less efficient vehicles for longer and a rising use of oil in plastics production. The average global car age has increased from twelve to fifteen years during the past decade. Under current trends, oil consumption in 2050 is expected to reach eighty-three million barrels per day, significantly higher than earlier forecasts.