According to a report by IDC, global data centre electricity consumption is expected to more than double between 2023 and 2028 with a five-year compound annual growth rate (CAGR) of 19.5 per cent and reaching 857 Terawatt hours (TWh) in 2028.
As per the report, electricity is by far the largest ongoing expense for data centre operators, accounting for 46 per cent of total spending for enterprise data centres and 60 per cent for service provider data centres. Electricity consumption is growing rapidly as data centres take on more workloads and more energy-intensive workloads, such as artificial intelligence (AI).
The report noted the surging demand for AI workloads will lead to a significant increase in datacentre capacity, energy consumption, and carbon emissions, with AI data centre capacity projected to have a CAGR of 40.5 per cent through 2027. Accordingly, AI data centre energy consumption is forecast to grow at a CAGR of 44.7 per cent, reaching 146.2 Terawatt hours (TWh) by 2027 with AI workloads consuming a growing portion of total datacentre electricity use.
Further as per the report, electricity prices are rising due to supply and demand dynamics, environmental regulations, geopolitical events, and sensitivity to extreme weather events fueled in part by climate change. The report believes the trends that have caused electricity prices to increase over the last five years are likely to continue. Rising consumption and increased energy costs will make datacentres considerably more expensive to operate.
The report added that to better understand the impact of rising electricity costs on data centre operations, IDC conducted scenario planning for a data centre with 1 MW of IT load in 2023, running at 50 per cent capacity and power usage effectiveness (PUE) of 1.5.
Commenting on the report, Sean Graham, research director, cloud to edge data centre trends, IDC, said, “There are any number of options to increase data centre efficiency, ranging from technological solutions like improved chip efficiency and liquid cooling to rethinking data centre design and power distribution methods. But providing energy-efficient solutions is only part of the equation for meeting customer needs. Data centre providers, including cloud and colocation services, should continue to prioritise investment in renewable energy sources. By investing in renewables, they are helping to increase overall supply while helping their customers meet their sustainability goals.”
As per the report, solar and wind power, in particular, offer significant environmental advantages while also providing the lowest levelised cost of electricity (LCOE), which reflects the average net present cost of electricity generation over a generator’s lifetime. Further, by collocating facilities at or near the source of renewable energy generation, providers can reduce both construction costs and energy losses associated with distribution, enhancing overall efficiency and sustainability while also improving resiliency by removing grid reliability issues.
