IEA: Global use of coal for power plants reaches record levels due to AI

The latest report from the International Energy Agency (IEA), dedicated to coal-fired electricity generation, reports that in 2024, coal consumption in the energy sector reached record levels in history. Although most of the growth in consumption of this fuel is taking place in China and India, not all is well with countries that are more prosperous in the context of the “green agenda”, reports Datacenter Dynamics.

According to the report, the markets of China and India still dominate. Demand for coal in China should grow by 1% in 2024, reaching 4.9 billion tons, in India – by 5% to 1.3 billion tons. However, the IEA admits that demand may reach a plateau before 2027 if China begins to get rid of its dependence on coal energy.

Today, China consumes 30% more coal than the rest of the world combined. Two key growth drivers are the development of services that previously used other types of fuel and the development of AI data centers. In recent years, China has been intensively developing its data center infrastructure. According to official data, the country has invested more than $6.1 billion in data centers since 2022. As a result, data center electricity consumption in the country should grow by more than 5% by 2030.

It is also emphasized that in the so-called. In “developed” countries, the decline in coal consumption has slowed down, this is especially obvious for the countries of the European Union and the United States. There, the demand for electricity led to a slowdown in the corresponding indicators. As a result, coal consumption in the EU and US will decrease this year by 12% and 5%, respectively, compared to 23% and 17% a year earlier.

Image source: Marcos Assis/unspalsh.com

Some American electricity suppliers have already reported that it was the demand from data centers for energy that led to the fact that utilities had to extend the life of coal-fired power plants. As demand for electricity increases, utilities are forced to use all available energy types, especially in regions with large numbers of data centers. By some estimates, data centers will consume 9% of US electricity annually by 2030, up from 4% in 2023.

Image source: IEA

Last month, US utility Southern Co. said it was considering extending the operating life of coal-fired power plants to meet power demand from data centers and other commercial and industrial facilities. In particular, we are talking about the Plant Bowen coal power plant in Georgia with a capacity of 3.45 GW.

Image source: IEA

Additionally, it is known that the supplier of energy from coal plants, Hallador Energy, reported an increase in demand for electricity supplies for data centers. He also sees “significant opportunities” in the fossil fuel sector. It recently signed a non-binding agreement with an unnamed data center operator to supply coal-fired electricity over an extended period.

Regulator NERC is sounding the alarm, saying resource-intensive AI poses a threat to the North American power grid as businesses continue to ramp up demand. Recently, OpenAI CEO Sam Altman came up with the idea of ​​creating an entire network of 5 GW data centers in the United States. The country’s government is already preparing a plan for the construction of AI data centers and power plants on federal lands, albeit at the expense of the environment.