AI boom has a dark side: Data centres threaten electricity systems worldwide, warns UN

Datacentre consumption is expected to almost double by 2030 – from 485 Terawatt-hours (TWh) in 2025 to 950 TWh by 2030, equivalent to three per cent of global demand, according to the intergovernmental International Energy Agency (IEA).

Investment in datacentre infrastructure worldwide, on the other hand, is forecast to roughly double only by 2050 – from around $800 billion per year in 2026 to $1.8 trillion per year in 2050.

The Geneva-based commission (UNECE) warns that in many regions, datacentres and other energy-intensive facilities are being built much faster than the power grids needed to supply them.

A large facility can often be built and connected within two to five years, but expanding transmission lines and other grid infrastructure can take more than 10 years because of lengthy planning, approval and construction processes.

Straining electricity systems

One of the worries is that overloading electricity systems could cause voltage oscillations, unintended disconnections, and cascading failures.

This is already happening in some extreme cases, in systems that depend on renewable energy sources. Electricity demand from AI datacentres is volatile and can spike unexpectedly: grids that rely on renewable energies cannot adjust in real time, UNECE points out.

This mismatch between demand and supply has led several countries to take energy-saving measures to prevent overloading their national networks.

Ireland, which has one of the highest concentrations of datacentres in the world, has introduced connection restrictions in Dublin, and the Netherlands has introduced constraints on where datacentres can be built.

Splitting the bill

A particularly important unresolved issue is who should pay for the grid upgrades.

Connecting large data centres can require significant infrastructure investment, but there is no consistent framework determining how these costs should be divided between data-centre developers, electricity companies and consumers.

Without clear rules, UNECE warns that necessary investment may be delayed.

Regulatory gaps

Regulatory gaps also persist over where data centres should be located. Power-intensive facilities continue to cluster in areas offering favourable connectivity and regulatory conditions, concentrating demand in places where local grids may not have the capacity to support it.

Environmental regulation is also beginning to expand beyond electricity consumption to the wider impacts of datacentres on water use, emissions and local resources, but UNECE warns that these rules remain too fragmented.

Regulators also lack sufficient information about how large facilities use electricity in real time, making it harder to anticipate their impact on the grid.

In all, UNECE is calling for greater regulation and coordination to ensure the long-term reliability and resilience of what are increasingly essential energy systems.