Data centres are becoming major consumers of electricity, with estimates suggesting that almost one-third of Ireland’s electricity demand could come from data centres by 2026. The energy consumption of AI models, such as ChatGPT, is significantly higher than traditional Google searches, with each ChatGPT request using around 10 times more electricity. This increased demand for electricity from data centres is contributing to global greenhouse gas emissions, with companies like Microsoft and Google experiencing significant rises in CO2 emissions due to data centre expansions. While AI currently represents a small fraction of the technology sector’s power consumption, its share is expected to increase as more companies and organizations adopt AI to improve efficiency and productivity.
In the European Union, there are over 8,000 data centres globally, with approximately 16% of them located in Europe. The majority of these data centres are concentrated in financial hubs such as Frankfurt, London, Amsterdam, Paris, and Dublin. The International Energy Agency (IEA) estimates that electricity consumption in the EU data centre sector will reach almost 150 TWh by 2026. In Ireland, data centres consumed 5.3 TWh of electricity in 2022, accounting for 17% of the country’s total electricity consumption. If the use of AI applications continues to grow rapidly, data centres could contribute to 32% of Ireland’s total electricity demand by 2026.
Denmark also hosts a significant number of data centres, with 34 of them located primarily in Copenhagen. The country’s electricity demand is expected to grow due to the expansion of the data centre sector, with consumption projected to reach 6 TWh by 2026, representing almost 20% of Denmark’s total electricity demand. Nordic countries like Sweden, Norway, and Finland benefit from lower electricity costs for data centres, thanks to their colder climate that reduces cooling needs. Sweden, in particular, is a major player in the data centre market within the Nordic region, with 60 data centres, half of which are located in Stockholm. Given their strong focus on decarbonization, Sweden and Norway are likely to increase their involvement in the data centre market, as a majority of their electricity is generated from low-carbon sources.
The rapid expansion of AI applications and data centres is expected to further increase electricity demand and greenhouse gas emissions globally. Data centres in Europe, particularly in countries like Ireland and Denmark, are projected to consume a significant portion of their respective countries’ total electricity demand by 2026. The concentration of data centres in major European cities highlights the importance of addressing the environmental impact of these facilities. Governments, companies, and organizations will need to work together to find sustainable solutions to mitigate the energy consumption and emissions associated with data centres and AI technologies.
Overall, the data centre industry’s growing demand for electricity, driven by AI applications, poses challenges for energy consumption and greenhouse gas emissions. Countries in Europe, such as Ireland and Denmark, are experiencing significant increases in electricity demand due to the expansion of the data centre sector. The Nordic region, with its lower electricity costs and focus on decarbonization, presents opportunities for further growth in the data centre market. To address the environmental impact of data centres and AI technologies, collaboration between stakeholders is essential to promote sustainability and reduce carbon footprints in the digital infrastructure sector.
