Global electricity demand from data centres and artificial intelligence workloads is accelerating at a pace that is reshaping the renewable energy sector, according to analysis from the International Energy Agency. The agency expects worldwide power demand to grow by 3.7 per cent in 2026, roughly double the rate of overall energy demand growth and well above the historical average of 2.6 per cent.
Data centres alone are projected to consume more than 1,000 terawatt-hours of electricity by 2026, a figure comparable to the entire power consumption of Japan. This surge is creating a structural shift in energy markets, with technology companies emerging as some of the largest buyers of renewable power through long-term purchase agreements.
“The hyperscale data centre operators are effectively underwriting the next wave of renewable capacity,” said Will Riley, a portfolio manager at Guinness Global Investors. “Their need for round-the-clock clean power is so substantial that it is changing the economics of wind and solar projects globally.”
In the United States, renewable energy accounted for 93 per cent of all new electricity generation capacity added through the first three quarters of 2025. Solar providers in particular are bullish, with 97 per cent planning to expand capacity within the next three years, according to an FM Global Group survey of 400 industry executives.
The relationship between AI and renewables cuts both ways. While data centres are driving demand, the renewable energy industry itself is increasingly turning to artificial intelligence to optimise grid management, predict maintenance needs, and balance intermittent supply. A survey of US power and renewable executives found that 76 per cent planned to increase AI spending during 2025.
Analysts caution that supply chain constraints and evolving trade policies could temper the pace of deployment. New sourcing rules targeting foreign entities of concern, combined with ongoing tariff uncertainty, are forcing developers to weigh compliance costs against project viability.
Despite these headwinds, the IEA”s data suggests the structural case for renewables has never been stronger. The convergence of digital infrastructure growth and decarbonisation targets is creating a demand signal that few in the energy sector anticipated a decade ago.
