CIO OPINION
The situation is serious enough that some locations are limiting or completely stopping data centre growth out of power concerns . commercial power , about 35 % or industrial power , about 25 % for access to power generation capacity .
The inevitable result of the impending electricity supply-demand imbalance is that , as demand for electricity begins to outstrip supply , electricity will get more expensive . Consequently , marginal applications will drop out of the market , and only those that can afford higher-priced electricity will remain .
Source : Power Shortages Will Restrict Generative AI Growth and Implementation by Gartner at a 3 % CAGR . This means that while total ICT power demand accounts for less than 3 % of the total power generation in 2024 , it will account for over 9 % by 3030 .
In 2021 , the additional demand for ICT accounted for a manageable 4 % of the additional generation capacity globally . By 2023 , driven by the increase in hyperscale data centres , incremental ICT demand was 20 % of total new generation , and this is projected to exceed 70 % by 2030 .
While these numbers may seem alarming on a global basis , they can be amplified in regions that have a large concentration of data centres .
Demand and supply imbalance
The result is that if current trends in data centre construction continue , a shortage in available power from traditional grid suppliers will rapidly develop . While this shortage will become acute by the end of the decade , regional shortfalls are likely to occur on a significant level within a couple of years .
In past years , ICT power consumption could grow much faster than electricity supply because it was a relatively small portion of the total . However , as ICT exceeds 5 % of the total supply , it becomes a significant factor in electricity consumption . ICT will begin to compete with other major users like residential power , about 40 %,
In addition , as power scarcities begin to become apparent , regional planning authorities will limit approvals for new data centres and other ICT infrastructure that would strain existing power grids . The result is that data compute , storage and communication capacity becomes supply-constrained and , therefore , expensive .
However , an added complication is that , if electricity gets too expensive for average consumers , politicians may force the allocation of electricity to consumer applications like powering the home and transportation . This forced allocation will reduce the amount of electricity available to other applications , like ICT .
The impact of impending power scarcities will be greater in areas with large concentrations of data centres . In some areas , wholesale power prices – the price for power direct from the generating plant into the distribution grid – are already reacting to potential shortages .
Major users of power are working with major power producers to secure long-term guaranteed sources of power independent of other grid demands . As an example , Amazon Web Services , AWS recently acquired a 1,200-acre data centre campus from Talen Energy . The facility , which can utilize up to 960MW of power , is adjacent to the Susquehanna nuclear power station .
A key aspect of this deal is that the data centre gets guaranteed power directly from the power station , bypassing the traditional grid . Because the nuclear power facility also supplies power to the general grid , the deal is being challenged by other users who claim that it will raise prices for other users .
Green energy
Data centres require 24x7 reliable power and cannot afford to be affected by unscheduled brown-outs or blackouts or interruptions of their baseload power . Currently , most data centres get their power from regional power grids that have a variety of power sources and can provide the type of reliable power needed . However , the surging demand for power for
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