How AI is causing an electrification 'supercycle'
Vincent Petit, SVP Energy Transition, Sustainability Research Institute
29 May 2025 • 4 min
The recent Bloomberg New Energy Finance (BNEF) event in New York was the perfect venue to discuss a topic that is rapidly reshaping the energy landscape: the burgeoning electricity demand driven by artificial intelligence and the accelerating pace of electrification.
At Schneider Electric's Sustainability Research Institute (SRI), we've been delving into the intersection of digital technologies and energy for some time. Our latest report, "Powering Sustainable AI in the United States”, offers a deep dive into how AI is set to become a significant driver of electricity consumption in the near term. Our analysis indicates that AI could account for a substantial portion – as much as 50% – of the growth in US electricity demand between 2025 and 2030.
This might sound striking, but when you consider that AI already represents around 3.5% of global electricity demand, and our scenarios show this increasing by a factor of two to three in the US, the implications for our energy system are massive.
Vincent Petit, SVP Energy Transition, Sustainability Research Institute interviewed at the 2025 New York BNEF Summit.
Sustainable AI: Not just about data centers
And this goes beyond just data centers. While they represent about half of the anticipated growth in electricity demand, we are also seeing significant increases from the industrial sector as manufacturing is revitalized, from buildings becoming more connected and electric, and from the widespread adoption of electric mobility. This confluence of trends leads me to believe we are entering a super cycle of electrification in the U.S., one that will unfold over at least the next five years and likely beyond.
Our report explores five AI energy consumption scenarios from 2025 to 2030, revealing distinct patterns of evolution. While all scenarios initially demonstrate a general upward trend, their underlying dynamics diverge significantly. Around 2027-2028, with the deployment of new AI-ready infrastructure, scenario-specific structural shifts become evident in electricity forecasts.
This rapid increase in demand presents a critical challenge for the supply side of our energy system. To keep pace, we will need to accelerate the development of power generation capacity at a rate two to three times faster than historical trends. The big question, of course, is how do we successfully navigate this acceleration?
The SRI proposes potential avenues to address this. Discussions at BNEF in New York have reinforced key themes:
01
Enhanced Efficiency
This involves significantly improving energy efficiency, particularly within energy-intensive data centers, but also across all sectors of the economy.
02
Behind-the-Meter Generation
Accelerating the deployment of distributed energy resources located closer to the point of consumption, such as rooftop solar, on-site battery storage, and microgrids.
03
Grid Flexibility
Increasing the ability of the power grid to manage fluctuations in supply and demand. This includes technologies and strategies that allow energy loads to be shifted in time or respond to grid conditions, thereby releasing the burden on the network.
These are the main routes to action, and their successful implementation will be crucial as we move forward. While the world may present short-term uncertainties – a constant throughout my career in strategy – the long-term direction toward a more electrified and digitized economy is clear. The consensus on where we need to go in the long term is surprisingly strong; the focus now must be on the next 10 years and taking decisive action.
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