According to a report from the International Energy Agency (IEA), the global electricity demand from data centres, artificial intelligence (AI), and cryptocurrency is projected to double by 2026. The surge in AI advancements and continued interest in cryptocurrency will contribute to this significant increase in consumption.

Currently, data centres, AI, and crypto collectively consume approximately 460 terawatt-hours (TWh) of electricity, accounting for nearly 2% of global electricity demand. The IEA predicts that this figure will exceed 1,000TWh by 2026, equivalent to Japan's annual electricity consumption.

Cryptocurrencies are expected to drive a 40% increase in electricity demand by 2026. However, the Ethereum blockchain has significantly reduced its electricity usage by over 99% through the adoption of a more efficient method for validating new transaction blocks.

The integration of AI technology is also expected to lead to a tenfold increase in electricity demand for companies like Google. For instance, comparing the average electricity demand of a typical Google search (0.3Wh) to OpenAI's ChatGPT (2.9Wh per request) and considering 9 billion searches daily, an additional 10TWh of electricity would be required annually.

Fortunately, renewable energy sources are expanding at a faster rate than electricity demand, ensuring an adequate supply of electricity. IEA predicts that renewable energy will surpass coal as the world's largest source of electricity by 2025.

Addressing the environmental impact of data centres, companies have experienced a steady increase in freshwater usage to cool their facilities. Microsoft and Google reported a respective 34% and 21% spike in water consumption, respectively, in 2022 compared to 2021.

To mitigate environmental concerns and meet the surging demand from data centres, the world will need to rely more heavily on renewable energy sources. The IEA projects accelerated growth in renewable energy, generating over a third of global electricity and surpassing coal by 2025. Enhancing energy efficiency through improved cooling systems and high-efficiency computing technologies is also crucial in aligning the rise in renewable energy with the needs of data centres.

While challenges lie ahead in terms of balancing electricity supply and demand, the IEA's projections offer encouraging signs of progress. By harnessing the potential of renewable energy and embracing energy-efficient practices, the global electricity demand from data centers, AI, and cryptocurrency can be met sustainably, paving the way for a greener future. As the demand for computational power and storage capacity continues to grow, it is essential to address the environmental impact of data centres. By adopting renewable energy sources, enhancing energy efficiency, and exploring innovative cooling technologies, we can mitigate the greenhouse gas emissions associated with data centres and ensure a more sustainable and resilient energy infrastructure.

The transition to renewable energy is crucial not only for reducing carbon emissions but also for creating a more reliable and resilient electricity grid. The adoption of an energy-efficient validation mechanism by other major blockchain networks is essential to further decrease electricity consumption and minimize the environmental impact.