The aggregated demand for energy from crypto, artificial intelligence (AI), and traditional data centers could double in 2026. According to a report by the International Energy Agency (IEA), the consumption growth might mean adding a country like Sweden (in the best case) or Germany (in the worst case) to the global energy demand.
Crypto, AI, and Traditional Data Centers to Add Significantly to 2026’s Global Energy Demand
According to a recent report by the International Energy Agency (IEA), an international organization created in 1974 to secure the energy reliance of its members, it is predicted that the energy consumption of traditional data centers, artificial intelligence (AI), and crypto might double by 2026.
The IEA stresses that data centers are a critical part of today’s digitalization, supporting all kinds of online operations, with 40% of the electricity demand of these centers coming from computing tasks and another 40% from cooling the devices where this computing takes place.
This industry’s demand for these computing tasks was 460 TWh in 2022, 2% of the global energy consumption. This is expected to increase to 620-1,050 TWh in 2026, signifying that it would add the demand of a country like Sweden, at the most conservative prediction, or one like Germany, at the worst estimation, to the global energy consumption.
Cryptocurrencies alone accounted for a demand of 110 TWh in 2022 and are expected to rise by more than 40% to 160 TWh by 2026. Nonetheless, the report recognizes that “uncertainties remain for the pace of acceleration in cryptocurrency adoption and technology efficiency improvements,” mentioning Ethereum’s consensus mechanism change from proof-of-work (POW) to proof-of-stake (POW), which made it reduce its energy footprint by 99%.
In contrast, Bitcoin energy consumption ranged at 120 TWh in 2023, more than 90% of the total 130 TWh estimated to be consumed by the whole crypto sector that year.
“Challenges in reducing electricity consumption remain, as energy savings can be offset by increases in other energy-consuming operations, such as other cryptocurrencies, even as some become more efficient,” the IEA concluded.
What do you think about the predicted energy consumption increase of crypto, AI, and data centers by 2026? Tell us in the comments section below.
