Will Energy-Hungry AI Create a Baseload Power Demand Boom?

The rapid expansion of generative artificial intelligence (AI) technologies is projected to have a significant effect on electricity use in the global data center sector. Some earlier research has proposed using data centers for load-balancing the future power grid to allow higher integration of variable renewables. In this paper, we review the expected future electricity consumption of AI and evaluate AI data center’s potential roles in a clean energy system. Our work finds that the levelized cost of computing (LCOC) favors higher load factors and shows relatively low sensitivity to electricity price levels. Under our baseline cost assumptions, a baseload electricity price of 125/MWh benefits load factors higher than 64%, depending on market price conditions and variations. The findings reveal that a boom in AI energy use could drive significant baseload power demand in the future power system.