A recent report from the International Energy Agency (IEA) has drawn attention to the burgeoning energy demands of cryptocurrency mining and artificial intelligence (AI) operations. According to the 2024 report, these sectors are poised for a substantial increase in energy usage through 2026, highlighting the growing impact of digital technologies on global energy consumption patterns.
The IEA's analysis indicates that the overall growth of power consumption fell from 2.4% in 2022 to 2.2% in 2023, but it is projected to rise to 3.4% by 2026. This increase is primarily driven by the expanding economies of countries like China and India, alongside the rising demands of data centers, AI, and cryptocurrency mining. Notably, these digital domains could more than double their energy use, surpassing 1,000 terawatt-hours (TWh).
In particular, AI's power consumption is forecasted to grow tenfold between 2023 and 2026, with applications like ChatGPT alone expected to use almost 10 TWh annually. This figure is nearly ten times the energy consumption of a standard Google search. The United States hosts a third of all data centers globally, further emphasizing the scale of this energy use.
Bitcoin, a major player in the cryptocurrency mining sector, consumed 120 TWh in 2023, making up a significant portion of the total 130 TWh used in all cryptocurrency mining. This figure was a rise from 110 TWh in 2022, representing 0.4% of the world's energy consumption. The IEA projects that by 2026, cryptocurrency mining will use about 160 TWh.
The report underscores the importance of energy efficiency improvements to address the growing demand. While renewables are expected to become the main power sources by 2025, the challenge of reducing electricity consumption remains. The IEA specifically highlights cryptocurrencies as a concern, noting that while some are becoming more efficient, increases in energy consumption in other areas, such as alternate cryptocurrencies, may offset these gains.
Bitcoin mining reportedly utilizes 54.5% sustainable energy and is seeing renewed investment in new equipment ahead of the Bitcoin halving. This reflects the complex landscape of energy consumption, where emerging digital technologies are increasingly influencing global energy dynamics.
Disclaimer: Please note that the information provided in this article is based on the referenced research articles. It is essential to conduct further research and analysis before making any investment decisions. The cryptocurrency market is highly volatile, and investors should exercise caution and consult with financial professionals before engaging in cryptocurrency trading or investment activities.
