Global data center electricity demand could reach 2,354 TWh annually by 2035, accounting for 7% of worldwide electricity consumption. BloombergNEF warns that grid connection delays could increase reliance on gas and coal, raising emissions.
-By Laura Contemori
Data center electricity demand could reach 7% of global consumption by 2035
Data center electricity demand is expected to nearly quadruple by 2035, reaching 2,354 TWh per year, equivalent to 7% of global electricity consumption. The increase will be driven mainly by the expansion of digital infrastructure and artificial intelligence (AI), but it could also lead to higher emissions and prolonged dependence on fossil fuels.
These findings come from the report Powering the Data Center Boom: How Grid Policy Can Deliver Clean Power Faster, prepared by BloombergNEF (BNEF) and commissioned by Bloomberg Philanthropies.
The main challenge is the time required to connect new facilities to electricity grids. In the United States and Europe, grid constraints are delaying connections for new data centers. To bring facilities online sooner, some developers, particularly in the US, are planning to build gas-fired power plants directly on site, according to the report.
Renewable energy has so far played a limited role in meeting this demand. Compared with gas, renewable power facilities generally require more land and have a lower capacity to provide dispatchable electricity.
Data centers and gas: 181 GW of planned generation capacity
BloombergNEF has identified 181 GW of announced new gas-fired generation capacity linked to data centers, with more than 90% of these projects located in the United States.
The projects have different development timelines. The figure therefore represents the potential scale of gas-fired generation associated with data centers, rather than a forecast of how much capacity will actually be built.
According to BNEF, the risks extend beyond short-term emissions. Many developers view gas-fired power plants as a temporary solution while waiting for grid connections. However, once these facilities are built, the investment already made could encourage operators to continue using them even after connecting to the grid, extending their dependence on fossil fuels.
If all announced US data center gas projects were completed and operated under BNEF’s assumptions, they would generate approximately 345 million tonnes of CO₂ equivalent annually.
This would be 152 million tonnes more than in a scenario where the same data center capacity was supplied with grid electricity. The increase would be equivalent to 10% of US power sector emissions in 2025.
In developed markets, accelerating grid connections offers a more sustainable alternative to building dedicated gas-fired power plants.
However, connecting data centers to the grid is not enough on its own. Unless additional electricity demand is matched by an increase in clean energy supply, it could still lead to higher fossil fuel-based electricity generation.
“The climate impact will depend not only on how much electricity these facilities consume, but also on how quickly grids can connect them and how effectively power systems can integrate cleaner generation sources to meet that demand,” warns Mark Daly, Head of Data Centers and Emerging Tech at BloombergNEF.
Data center electricity demand in emerging markets
The situation is different in countries where electricity systems still depend heavily on coal. BNEF examines four emerging markets: Brazil, India, Indonesia and Malaysia.
According to BNEF’s projections, almost all the additional electricity generation needed to meet Brazil’s data center demand by 2035 is expected to come from renewable sources.
In India, however, a significant share of the additional demand will be met by increasing generation from existing coal-fired power plants. Data center electricity demand is projected to rise from 11 TWh in 2025 to 91 TWh in 2035.
In Indonesia, current regulations do not allow data centers to enter into electricity supply contracts directly with independent renewable energy producers.
In Malaysia, data center electricity demand is expected to increase from 7 TWh in 2025 to 45 TWh by 2035, according to BNEF.
Continued growth in electricity consumption is expected to drive the construction of additional gas-fired generation capacity over the longer term, while also extending the operational life of existing coal-fired power plants.
