Power Struggle: How AI is challenging Canada’s electricity grid

Source: Shaz Merwat | · RBC · | December 4, 2024

Artificial intelligence (AI) is rapidly reshaping the global economy, driven by Big Tech’s breakthrough apps such as OpenAI’s ChatGPT. Businesses are eyeing ways to transform their operations through AI, which has serious implications—transformative and disruptive—for the wider economy. At the heart of this AI-driven transformation are data centres, the crucial infrastructure powering applications, from simple queries to complex generative tasks.

Every AI prompt requires significant computing power. A single ChatGPT query consumes 10 times more energy than a standard Google search. More advanced AI operations such as generating text or images, exponentially spike power consumption. Canadian data centres’ rising energy demands make them a major driver of electricity demand growth. If all the data centre projects currently being reviewed by regulators proceed, they would account for 14% of Canada’s total power needs by 20301, similar to 12-15% by 2030 in the U.S.2

The development of these data centres, likely between 20 to 30, would result in $100 billion in capital expenditures related to the construction and build of accompanying IT infrastructure3. However, AI’s energy-intensive nature raises concerns about power availability, grid reliability and its implication on emissions.