The International Energy Agency expects the AI sector's energy consumption to rise, but it still points the finger at the cryptocurrency sector as an excessive consumer.
The global electricity market is undergoing profound changes, as the industry leads the way in decarbonization and faces new consumption patterns. Cryptocurrency mining and artificial intelligence are expected to see major shifts in energy use in the coming years, according to the multinational government International Energy Agency (IEA).
It's not all bad news about energy consumption, according to the International Energy Agency's 2024 report, which forecasts usage through 2026. “Power generation is currently the world's largest source of carbon dioxide emissions, but it is also the sector leading the transition to net-zero emissions,” the report said. "Zero". Renewable energy sources will become the main sources of energy in 2025.
Consumption growth declined from 2.4% in 2022 to 2.2% in 2023, but is expected to rise to 3.4% until 2026, with China and India being major contributors to this growth.
At the same time, energy consumption of data centers, AI, and cryptocurrencies may double in this time frame and exceed 1,000 terawatt-hours; Note that one-third of all types of data centers are located in the United States.
Analysis of the use of data centers, artificial intelligence and cryptocurrencies, the base case. Source: International Energy Agency
AI will largely lead the way, with AI energy consumption expected to increase tenfold between 2023 and 2026. ChatGPT alone is expected to consume about 10 terawatt-hours per year in that period. Note that each ChatGPT request consumes about 10 times the search power on Google.
Analysis of the use of data centers, artificial intelligence and cryptocurrencies, the base case. Source: International Energy Agency
One terawatt-hour can power 70,000 U.S. homes for a year; In constant comparison with countries around the world, this means that cryptocurrencies and the consumers associated with them will reach the level of consumption in Japan.
It is reported that Bitcoin consumed 120 terawatt-hours in 2023, out of a total of 130 terawatt-hours used in all cryptocurrency mining operations. The latest figure is up from 110 TWh in 2022 when it represented 0.4% of global energy consumption. While the International Energy Agency expected that cryptocurrency mining would use 160 terawatt-hours by 2026.
Analysis of the use of data centers, artificial intelligence and cryptocurrencies, the base case. Source: International Energy Agency
Despite a complex picture of energy consumption that is constantly in flux and the fact that cryptocurrency mining uses a very small fraction of the world's energy, the report cited cryptocurrencies as a cause for concern:
“There are still challenges in reducing electricity consumption, as energy savings can be offset by increases in other energy consuming processes, such as other cryptocurrencies [from Bitcoin], even as some become more efficient.”
Reports indicate that Bitcoin mining uses 54.5% sustainable energy. Mining activity picks up ahead of the Bitcoin halving, with many miners investing heavily in new equipment.
