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Explaining the Growing Impact of AI and Data Farms on India’s Power Sector

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In Short:

The government’s power sector experts were surprised by higher demand than expected in May, crossing 250 GW later. This increase stems from various sectors like industry and households, with added pressure coming from electric vehicles and solar energy. However, AI’s impact on power consumption, with data centers and large machines, poses a challenge for energy availability and sustainability in India.


The Power Sector’s Growing Pains

**Central Electricity Authority (CEA)** had some surprising news about power demand in India – it surpassed their expectations! Initially, they predicted a peak demand of 235 GW for May, reaching over 250 GW in August and September. The forecast for 2024-25 was around 245 GW, increasing to 260 GW by 2025-06. Fast forward to 2031-32, and they expect a demand of 328 GW, and 488 GW by 2041-42. That’s a lot of power needed!

The Impact of AI On Power Demand

**Artificial intelligence (AI)** is gaining momentum, and with that, the need for more power. The rise of AI, specifically generative AI, and the growth of data centers to support online interactions are expected to push power demand even higher. **Mint** explains this phenomenon in detail.

Why AI and Power Utilities Don’t Mix Well

The energy impact of AI is causing quite a stir globally. According to the **International Energy Agency**, the combined power usage of data centers, cryptocurrencies, and AI reached a whopping 460 terawatt hours in 2022, accounting for about 2% of global electricity demand. Fast forward to 2026, and this demand could surge up to 620-1,050 TWh. That’s a lot of power!

The Energy-Hungry Nature of AI

Researchers note that AI requires intensive amounts of electricity. For instance, running AI tasks could surpass the power usage of an entire country like Iceland by 2028. This is due to the power-hungry nature of AI servers, with devices like the NVIDIA DGX A100 server consuming electricity equivalent to multiple US households. The demand for GPUs for AI is also skyrocketing, posing a challenge in power management.

The Growing Appetite of AI

**India** is no exception to the AI wave. With digitalization on the rise, the power demands are surging. A joint study by **Microsoft** and **LinkedIn** revealed that over 90% of India’s knowledge workers are already leveraging AI tools for productivity gains. The increased use of generative AI models will inevitably lead to more data centers, placing a heavier load on the existing power infrastructure.

Meeting the Rising Power Needs

To handle the surge in power demand from AI and digitalization, governments, regulators, and power companies must plan meticulously. With the increasing deployment of AI and the growth of data centers, it’s crucial to ensure a reliable and stable flow of electricity to meet the escalating demands. The future of power in the AI era is shaping up to be quite a challenge!

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