Rapid and Large Swings in Demand: The IEA's April 2026 Release on Energy and AI

The press release is dated 16 April 2026. It comes from the International Energy Agency, the IEA. Its title: "Data centre electricity use surged in 2025, even with tightening bottlenecks driving a scramble for solutions."

It announces a report and names it: "Key Questions on Energy and AI." This article reports the release, not the report.

2025

"Electricity demand from data centres soared by 17% in 2025, and that of AI-focused data centres climbed even faster," the release says, "well outpacing growth in global electricity demand of 3%."

The sentence before it gives a figure for spending and an expected increase: "Driven by data centre investments, the capital expenditure of five large technology companies surged to more than $400 billion in 2025 and is set to increase by a further 75% in 2026."

By 2030

The release's forecast, from its next paragraph: "As a result, electricity consumption from data centres is set to double by 2030, and power use from those focused on AI is poised to triple."

Two sentences stand before that one. According to the report, the first says, "power consumption per AI task is declining rapidly, with efficiency improving at a rate unprecedented in energy history." The second begins "However, more people are using AI," and says energy-intensive uses "are on the rise."

Physical Bottlenecks

"At the same time, AI deployment is increasingly coming up against a range of physical bottlenecks, limiting the rate at which data centres can expand in the near term. Supply chains for energy technologies such as gas turbines and transformers, as well as for advanced chips and IT components, have tightened over the past year." The sentence ends: "the swelling pipeline of data centre projects is straining planning and regulatory systems, holding up grid connections and other necessary approvals."

Onsite Natural Gas

"Constrained by slow grid connections, data centre developers are also advancing a large number of projects with onsite natural gas-based power generation, largely in the United States. First-of-its-kind IEA data from satellite-based tracking shows that many of these projects remain in their early stages, highlighting the technical and financial hurdles that need to be overcome."

The next sentence: "One of the key challenges is that AI data centres have rapid and large swings in demand, and meeting their power needs reliably can stretch the technical capabilities of onsite gas plants."

The sentence after that: "For this reason, onsite battery storage is becoming a critical technology for the next generation of AI data centres, which could make them an asset to grids with the right incentives."

Conditional Offtake Agreements

The tech sector, the release says, "accounted for around 40% of all corporate power purchase agreements for renewables signed in 2025."

The next sentence: "The pipeline of conditional offtake agreements between data centre operators and small modular reactor (SMR) nuclear projects has grown from 25 gigawatts at the end of 2024 to 45 gigawatts today, indicating that the momentum behind AI could accelerate the commercialisation of new energy technologies."