AI Energy Use: Why You Shouldn’t Panic

The world is collectively freaking out about the growth of artificial intelligence and its
strain on power grids. But a look back at electricity load growth in the United States over the last 75 years shows that innovations in efficiency continually compensate for relentless technological progress.

In the 1950s, for example, rural America electrified, the industrial sector boomed, and homeowners rapidly accumulated nifty domestic appliances such as spinning clothes dryers and deep freezers. This caused electricity demand to grow at a breathtaking clip of nearly 9 percent per year on average. The growth continued into the 1960s as homes and businesses readily adopted air conditioners and the industrial sector automated. But over the next 30 years, industrial processes such as steelmaking became more efficient, and home appliances did more with less power.

Around 2000, the onslaught of computing brought widespread concerns about its electricity demand. But even with the explosion of Internet use and credit card transactions, improvements in computing and industrial efficiencies and the adoption of LED lighting compensated. Net result: Average electricity growth in the United States remained nearly flat from 2000 to 2020.

Now it’s back on the rise, driven by AI data centers and manufacturing of batteries and semiconductor chips. Electricity demand is expected to grow more than 3 percent every year for the next five years, according to
Grid Strategies, an energy research firm in Washington, D.C. “Three percent per year today is more challenging than 3 percent in the 1960s because the baseline is so much larger,” says John Wilson, an energy regulation expert at Grid Strategies.

Can the United States counter the growth with innovation in data-center and industrial efficiency? History suggests it can.