EY: Data Centre Energy Use Demands Urgent Green Shift

According to EY, electricity demand is set to double worldwide by 2050, and the firm reports data centres and digital technology are major forces behind this rise. 

EY’s latest energy report highlights how the expansion of AI, cloud services and manufacturing is pushing infrastructure to its limits. It also argues that providers need to deliver cleaner, more responsive energy solutions to support business customers.

In its Navigating the Energy Transition research programme, EY draws on five years of global data, surveying nearly 100,000 residential energy users and over 2,400 business leaders. The study covers eight countries and reveals growing urgency among organisations to reduce emissions, manage energy costs and secure faster access to renewables.

“Successfully navigating accelerating business energy growth will drive energy prosperity and define the economic and energy transition winners of tomorrow,” says Greg Guthridge, EY Global Industrials & Energy Customer Experience Transformation Leader. 

Data centres and digital tools push usage higher

With the growth of generative AI and increased digital infrastructure, electricity use from data centres is rising sharply. EY finds that data centres are now a clear contributor to peak demand and part of a broader shift toward full electrification across industries.

Alongside this, 71% of businesses now want AI to deliver energy advice and identify opportunities to cut consumption. The report highlights a demand for digital energy platforms, automation tools and better analytics to help businesses manage power use more effectively.

EY also reports that 70% of businesses are focusing their energy strategies on cutting emissions, controlling costs and electrifying operations. But expectations of providers are changing too. Some 74% of companies now say that traditional energy account management does not support their current or future needs.

Instead, they expect faster, more tailored services and are willing to pay more for them. Around 70% of respondents plan to invest in their own on-site generation and battery storage over the next three years, with many prioritising immediate access to clean power.

“Data centres are multiplying, electrification is accelerating and manufacturing is ramping up – all driving electricity demand to levels not seen in decades,” explains Greg.

“Rising energy demand and infrastructure investments are impacting affordability and raising important questions about who should pay for it.”

Mid-sized businesses fall behind on clean energy

EY singles out mid-sized companies – many of which are involved in data processing, edge computing or digital logistics – as especially at risk of falling behind in the energy transition.

These businesses represent a major share of employment and GDP, but are 20% less likely than larger firms to have defined energy plans. While their ambitions for electrification and sustainability match those of larger organisations, they face bigger hurdles.

High financing costs, complex regulation and limited engagement from providers are all barriers. According to EY, “progress is slow because of barriers including the high cost of financing, complex regulations and challenges working with energy providers”.

Even so, more than two-thirds of these companies are exploring battery storage, electric vehicle deployment, demand response and renewables. EY says there is a clear opportunity for providers to step in with targeted, sector-specific solutions.

New roles for energy providers in the digital age

EY points to energy utility AES as an example of what smarter, tech-enabled energy delivery looks like. AES operates across 15 countries and works with a wide network of partners to offer new solutions for business customers.

AES partnered with Siemens to launch Fluence, an industrial battery storage company. It also backs Uplight, a cloud platform that offers energy insights and efficiency tools for commercial and residential users.

AES’s 24/7 carbon-free energy partnership with Google supports its Virginia data centre, using digital tools to match renewable generation with real-time consumption. A separate collaboration with solar firm 5B helps AES deploy clean power faster for its customers.

These examples show how providers are evolving their services with the help of digital platforms, battery technology and cloud computing to support new patterns of energy use.

EY concludes that energy companies must consider four roles to meet changing business demands:

• Specialised solution provider – offering equipment and services like solar and storage
  
  
• Energy platform orchestrator – enabling customers to manage energy digitally
  
  
• Core energy operator – delivering simple rates and flexible pricing
  
  
• Energy transition advocate – helping businesses adopt renewables

With electricity consumption from data centres only increasing, EY says providers must move faster to deliver smarter and more tailored energy support for businesses.