IT sector electricity demand: refined forecast 2030

IT sector electricity demand is expected to grow by 50 percent by 2030, reaching a total of 3,200TWh, according to a forecast that looks at the main – certain – IT technology developments and considers the progress and challenges on an electricity usage level.

As organizations continue to digitize and people across the globe increase digital adoption in an ever more data-intensive and connected world, electricity usage from IT is expected to rise by 50 percent by 2030, a compound annual growth rate (CAGR) of 5 percent.

Schneider Electric estimates that IT sector electricity demand will grow by
50 percent by 2030, reaching 3,200TWh, equivalent to 5 percent Compound
Annual Growth Rate (CAGR) over the next decade – evolution of IT energy demand in TWh

The fast-growing impact of IT on our lives and businesses, the continuous development of our big data world, and the more powerful technologies enabling us to build more connected and intelligent applications with IoT and AI aren’t new. Still, the impact of the COVID-19 pandemic and plans of governments to invest in a more digital, resilient, and sustainable future had and will have an acceleration effect.

Since ongoing digitization and digital transformation boost IT sector electricity demand and energy requirements, there are clear concerns that this increasingly digital economy will have a negative impact on climate.

Yet, of course, one can’t simply forecast this impact without considering, among others, the evolutions in technology as such (with the shift to cloud and rise of edge computing being key), efforts on the level of decarbonization and sustainability, the addition of clean power sources, etc.

IT sector electricity demand: the need for more power in context

Simply saying that more IT by definition means a considerable increase in CO2 emissions is incorrect.

Moreover, one has to look at the applications and technologies themselves. It’s clear that the increasing adoption of some technologies has a different impact than others, whether it concerns Industry 4.0, enterprise IT, or more consumer-oriented applications.

“IT electricity usage will rise by 50 percent by 2030. Yet this doesn’t have to lead to more CO2 emissions. With huge potential to decarbonize data centers, transport and buildings – digital is part of the solution (Philippe Delorme, Executive Vice-President, Energy Management, Schneider Electric)

So, what can we expect, and how do we even forecast the impact of  IT sector electricity going forward? And will it be that ‘bad’ as some predict? Organizations at the forefront of electrification, decarbonization, and digitization believe that the impact will be limited due to technological progress and clean power sources, combined with higher efficiency and more intelligent solutions.

Schneider Electric, a leader in the mentioned areas, released a report end May 2021, offering a refined forecast for IT electricity consumption up to 2030, along with the critical risks regarding the rise of IT in terms of electricity consumption.

Electricity demand growth of the IT sector based on the assumptions in the report

In the report, entitled “Digital economy and climate impact. A bottom-up forecast of the IT sector energy consumption and carbon footprint to 2030,” –  the authors estimate that IT sector electricity demand will grow by 50% by 2030, reaching 3,200TWh, equivalent to 5 percent CAGR over the next decade, as mentioned.

The forecast considers several observed efficiency gains in, among others, data centers, mobile network developments, and efficiencies realized in areas such as device manufacturing.

Several emerging applications such as autonomous vehicles and blockchain developments are not considered yet since the research focuses on the more certain technology developments, with the bulk of growth expected to come from data centers and networks.

The report uses a bottom-up approach based on two main sets of drivers for electricity demand growth from digitalization.

The forecasts, findings, and detailed data can be read per sector here, with the impact of digitalization on computing and data storage (“more data”, cfr. the growing datasphere) as the starting point.

Computing and data storage is followed by the evolving data center landscape with the mentioned shift to cloud and rise of edge computing as inevitable topics, on top of new mobile networks and, of course, the connected world of IoT (Internet of Things) that is omnipresent in Schneider Electric’s business and solutions.