SURGING ENERGY DEMANDS AND CHALLENGES OF AI

AI is a double-edged sword, argues SONNY ARAGBA-AKPORE

While findings show that artificial intelligence (AI) is both a driver of efficiency, but a growing challenge, leading AI and cloud providers saw their individual emissions rise between 2020 and 2024, driven by soaring energy demand and expansion of infrastructure. These findings indicate that AI may provide answers to general energy requirements, but the challenges ahead may reduce the excitement it brings. New studies released by the International Telecommunication Union (ITU) and the World Benchmarking Alliance (WBA), recently have reports that evaluated the climate performance of 200 digital companies globally using publicly disclosed data relating to the 2024 reporting year.

The fifth edition of Greening Digital Companies tracks greenhouse gas (GHG) emissions, energy consumption, climate targets, renewable energy use and, for the first time, climate transition planning before drawing the conclusion of the challenges of AI ahead. The report released last week in Geneva, Switzerland by ITU says that despite progress in climate reporting and renewable electricity use, digital companies are falling short in cutting emissions at the pace required to achieve global climate targets, quoting the new report Greening Digital Companies: Monitoring Emissions and Climate Commitments 2026. “While digital technologies offer immense potential for climate action, their rising energy demands and emissions cannot be overlooked,” according to Doreen Bogdan-Martin, ITU Secretary-General adding that “Environmental sustainability must be built into how we design, power and scale the technologies shaping our shared digital future.”
Indeed, AI’s growing energy demand highlights the urgency to align digital opportunities with climate goals. In what looked like AI’s double- edged sword, the report identifies AI as an increasingly important factor shaping the sector’s emission trajectory. “Operational emissions from four major AI and cloud providers have soared, reaching up to 239 per cent of their 2020 levels, while 14 large telecom operators reduced their emissions by 11 per cent over the same period.”

ITU submits that “while AI supports climate action through energy optimization, renewable forecasting, and efficiency gains, it comes with its own environmental costs. The report underlines the critical need for AI growth to align with clean energy investments and emissions management.” The report identifies priority actions, such as strengthening climate reporting, reducing Scope 3 emissions, improving the implementation of climate transition plans, and aligning AI and digital infrastructure expansion with clean energy development.

“The ICT sector has the innovation, resources, and influence to help shape a more sustainable digital future,” said Cosmas Luckyson Zavazava, Director of ITU’s Telecommunication Development Bureau. “Rearising that potential means turning climate commitments into implementation, cutting emissions, strengthening collaboration among various sector actors and ensuring that digital growth, including AI, advances alongside clean energy development.” ITU supports this work through collaborative initiatives like its Expert Group on Telecommunication/ICT Indicators, with a key sub-group developing harmonized national-level indicators for tech-related GHG emissions and energy use. The latest findings also reinforce ITU’s Green Digital Action Initiative, which calls for greater transparency on energy use, emissions, and progress toward science-based targets. The ITU submits that Climate reporting has improved, but significant gaps remain. “While 89 per cent of companies reported direct emissions (Scope 1) and 81 per cent reported purchased energy (Scope 2), only 47 per cent reported emissions from across all relevant value chain activities (Scope 3).

On Greenhouse gas emissions the report indicates that “In 2024, digital companies reported 301 million tonnes of operational emissions (Scope 1 and 2) in carbon dioxide equivalent, equivalent to 0.8 per cent of global energy-related emissions and a 1.2 per cent increase from 2023. For companies disclosing value-chain emissions (Scope 3), these dominated their carbon footprint, accounting for 76 per cent of total emissions and underscoring the sector’s challenges in supply chains, manufacturing, and product use.
The report says of electricity consumption that “163 companies reported consuming 494 terawatt-hours (TWh) of electricity in 2024, equivalent to approximately 1.7 per cent of global electricity consumption. Over half of this electricity consumption (54 per cent) was concentrated in just 10 companies, surpassing the yearly electricity use of some countries.

“While digital companies remain among the world’s largest corporate purchasers of renewable electricity, only 25 of the 200 companies assessed reported sourcing 100 per cent renewable electricity.” The report indicates that Climate targets show that 151 (or 76 per cent) of the assessed companies submitted near-term reduction targets for Scope 1 and 2 emissions, reflecting both voluntary leadership and the influence of investor expectations, scientific and awareness-raising campaigns, and emerging regulatory requirements. “However, just 114 targets were validated by science-based frameworks with 85 assessed as on track based on progress to date. On Climate transition plans, only 81 companies (41 per cent) demonstrated comprehensive plans to meet climate goals, including strategic ambition, implementation and engagement strategies, clear metrics, targets, and governance. “This highlights the urgent need for more robust planning to manage the necessary economic, social and energy transitions “adding that “Digital companies need to engage suppliers and address emissions across the products and services they rely on,” according to Gerbrand Haverkamp, Executive Director of the World Benchmarking Alliance. “For example, the electronics sector, which provides many inputs underpinning digital infrastructure, accounts for 53 per cent of reported emissions across all three subsectors.”

The ITU has put in place global standards and frameworks connecting digital networks with sustainable energy infrastructure. It has also developed technical recommendations—such as ITU-T L.1332 for network infrastructure energy efficiency and ITU-T L.1510 for digital environmental key performance indicators—to measure and reduce power loss in telecom facilities and data centres.

**AI and Power Grids are part of measures that the **ITU addresses the dual role of artificial intelligence as both a major driver of surging electricity demand and a smart tool for optimizing power grid performance. Through Smart Energy Solutionist creates frameworks like ITU-T L.1385, by providing guidelines for smart industrial energy management systems to improve efficiency and reliability in manufacturing and building infrastructures. And in order to Bridge Global Divides the ITU initiatives emphasize expanding resilient connectivity and investing in foundational energy infrastructure, particularly in developing regions like Africa, to achieve sustainable digital development.

Aragba-Akpore is a member of THISDAY Editorial Board