Why We Don't Know AI's True Energy Impact

By Haley Zaremba - Oct 29, 2025

• The rapid growth of AI is creating significant uncertainty and strain on global energy grids, with projections indicating a doubling of energy needs by 2030, posing challenges for energy security and grid stability.
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• The AI industry is characterized by extreme opacity, with no federal registration requirements for data centers or laws mandating disclosure of energy usage or environmental impact, leading to decisions based on conjecture rather than hard data.
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• While states offer incentives for data center development, local communities are pushing back against the rapid expansion due to skyrocketing utility bills and the perceived transfer of wealth from residential customers to large corporations.
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As the AI boom sends shockwaves across energy grids around the world, global leaders are rushing to add extra power production capacity as fast as they can. The problem is, no one knows how much energy AI is going to be using a year or five years from now. In fact, we don’t even know how much it’s using right this moment. The result is a mad scramble to maintain energy security in the face of unprecedented uncertainty, with potentially disastrous results for global energy grids and climate goals. 

“In the past few years, AI has gone from an academic pursuit to an industry with trillions of dollars of market capitalisation and venture capital at stake,” reports the International Energy Agency. The scale of the energy needed to power this growth means that “the energy sector is therefore at the heart of one of the most important technological revolutions today.”

AI doesn’t just need more data centers, it needs more power per data center, as the kind of computer chips that enable large language models require much more energy to run. Projections for the AI sector’s energy needs are massive. The International Energy Agency expects them to double between now and 2030, marking a serious challenge for energy security and grid stability in regions where data center developments are being clustered.

In the United States, the federal government has identified fast-tracking data center construction as a matter of national priority. But the projections that these decisions are being based on are derived from a whole lot of conjecture and relatively little hard data. The advancement and spread of AI technology has far outpaced regulation and policy measures to control and track the sector. As a result, the industry is characterized by extreme opacity, as there are no laws requiring companies to disclose their energy usage, their environmental impact, or even how many data centers they’ve built. 

“There is no federal registration requirement for data centers, so their estimated number varies depending on the source,” writes the Pew Research Center in a report about energy use at data centers in the United States. “Some owners of data centers also obscure their locations for security reasons and/or competitive advantage,” the report goes on to say.

The Pew Research Center also notes that many states are courting data center developers, offering financial incentives and fast-tracking permitting in the hope that these high-dollar projects will boost local economies and provide jobs. In part thanks to these state-level policy measures, data centers are being built up in geographically concentrated clusters, and can therefore majorly strain power grids where they are located in large numbers. The Institute for Energy Economics and Financial Analysis reports that for utilities in Virginia, South Carolina and Georgia, “data centers are responsible for 65% to more than 85% of projected load growth.” Accordingly, major utilities in these states as well as North Carolina expect to add a collective 32,600 MW of electrical load over the next 15 years.

But while some states are courting such developments, politicians and constituents at the local level are pushing back against rapid development in their areas. Constituents in regions where huge numbers of data centers are popping up feel that they are getting the hard end of the bargain by unfairly and involuntarily propping up Big Tech’s agenda through their own skyrocketing utility bills. 

"We are witnessing a massive transfer of wealth from residential utility customers to large corporations—data centers and large utilities and their corporate parents, which profit from building additional energy infrastructure," Maryland People's Counsel David Lapp told Business Insider. "Utility regulation is failing to protect residential customers, contributing to an energy affordability crisis.”

By Haley Zaremba for Oilprice.com