Artificial intelligence accelerates, global power system faces major challenges
The International Energy Agency recently released a report predicting that global data center electricity consumption will double in the next five years. With the accelerated application of artificial intelligence technology, data centers are becoming an important force driving the growth of global electricity demand. However, the contradiction between data center construction and power infrastructure expansion is becoming increasingly apparent. In some areas, the power grid capacity is insufficient, and there is a large backlog of grid connection applications. Many data centers are facing problems such as power supply guarantee. The International Energy Agency believes that traditional grid planning and access mechanisms are difficult to fully adapt to the rapidly growing needs of large data centers. Countries are accelerating the adjustment of grid connection policies, exploring more flexible grid access methods and diversified power supply paths.
Rapid growth in power demand for data centers
The report shows that by 2025, global data center investment will increase by 17% year-on-year, exceeding $550 billion, and the investment scale has surpassed that of the oil and gas production sector. It is expected that by 2026, the capital expenditures of major global data center operators will exceed $700 billion, with the majority being used to build new data centers.
The rapid growth of data center investment has also had a significant impact on electricity demand in some regions. According to data from the International Energy Agency, the electricity demand in developed economies will increase by 2.1% year-on-year in 2025, with the growth rate exceeding 2% for the second consecutive year. Data centers will contribute more than 20% of the incremental electricity demand.
However, compared with traditional industrial electricity consumption, data center projects have a larger scale, shorter construction period, and greater uncertainty in the growth of electricity demand. The report points out that data centers typically take two to three years from project announcement to operation, while transmission network expansion often takes longer. As a result, there is a mismatch between the construction progress of data centers and the expansion speed of power infrastructure in some regions.
At the same time, the layout of data centers presents obvious regional concentration characteristics. According to statistics from the International Energy Agency, by 2025, approximately 60% of global data center capacity will be concentrated within industrial clusters. If all ongoing projects are completed, this proportion will exceed 65%, and if all announced projects can be implemented, the proportion may further exceed 70%.
Multiple countries accelerate adjustment of grid connection rules
Faced with the rapid growth of power demand in data centers, many countries are accelerating the adjustment of grid access rules for large-scale power projects. The International Energy Agency pointed out that traditional power grid planning is mainly aimed at increasing relatively stable electricity loads, which is difficult to fully adapt to the characteristics of short construction cycles, large electricity consumption scales, and uncertain project implementation of large data centers.
The report found that there are 134 policies and regulatory measures related to data center access to power systems worldwide, with nearly 40% announced in the past 12 months. Improving the accuracy of electricity demand forecasting, selecting projects with construction conditions, and guiding data center site selection are becoming important directions for policy adjustments in various countries.
Australia strengthens management in the demand forecasting process. The report points out that Australian energy market operators evaluated the application for grid connection of 44 GW data centers, taking into account factors such as project construction progress, grid connection conditions, and duplicate applications, and ultimately included 7.9 GW as a more likely demand forecast to be implemented. The International Energy Agency believes that identifying real electricity demand in advance can help prevent the power grid from overinvesting in projects that have not yet been implemented.
The United States is also adjusting the grid management of large-scale electricity projects. The Texas Electricity Reliability Board introduces factors such as project delays and actual operational ratios in load forecasting to reduce the impact of uncertainty on grid planning. At the same time, some electricity markets in the United States have begun to increase the maturity and funding commitment requirements for project applications, in order to avoid a large number of unfulfilled projects occupying limited grid access capacity for a long time.
Europe, on the other hand, places more emphasis on the location of data centers and the coordination of power grid planning. For example, the French government and transmission grid operator RTE have reserved grid capacity in four large plots near high-voltage transmission facilities to provide access conditions for high power consuming facilities.
While improving project screening and site selection arrangements, some regions are also attempting to increase the utilization of existing power grids through flexible access. The International Energy Agency estimates that the global power grid is expected to accommodate an additional 750 to 900 gigawatts of load by adopting non guaranteed grid connection agreements that allow for specific time periods of restricted electricity usage.
The International Energy Agency believes that improving the transparency of project construction information and perfecting the screening mechanism for grid connection applications can help reduce unnecessary grid investment and project access delays. However, as various policies still need to be implemented in conjunction with local power grid conditions, their actual effects need further observation.
The power supply methods tend to be diversified
With the rapid growth of power demand in data centers, technology companies are also accelerating the adjustment of their power procurement strategies to ensure stable power supply for newly added computing facilities. The International Energy Agency pointed out that data center operators have long been important purchasers of renewable energy and are now further exploring diversified power supply methods.
The report shows that in the first half of 2026, global data center operators signed power purchase agreements involving a total of 45 terawatt hours of electricity, a year-on-year increase of nearly 20%. In addition to traditional wind and photovoltaic power, advanced geothermal, small modular nuclear reactors, and long-term energy storage technologies are gradually entering the procurement scope of technology enterprises. The International Energy Agency believes that the growing demand for electricity in data centers is providing new market opportunities for new energy technologies.
At the same time, some countries have begun to require data centers to take on more responsibility for new power supply. Ireland stipulates that certain types of newly built data centers need to contribute to the adequacy of the power system supply by building or signing contracts to add dispatchable power sources. In the United States, some data center developers are pushing for on-site natural gas power generation projects to alleviate the impact of restricted grid access. China and Spain guide data centers to increase the proportion of green electricity usage by implementing or researching renewable energy procurement requirements.
However, diversified power supply models still face practical constraints. The report points out that a large number of on-site power generation projects in the United States are still in the planning stage, and factors such as long supply cycles of power generation equipment and complex project construction may affect the commissioning progress. Although some projects are equipped with energy storage facilities, they still plan to connect to the public power grid in the future.
The International Energy Agency believes that the power procurement decisions of data center operators are not only related to their own power supply security, but also affect the energy security and power system operation of the region. In the future, relevant policies need to be further improved to enable new data centers to meet their own electricity needs while contributing to the reliability and sustainable development of the power system supply.
