Data centres now attract more capital than new oil projects as global energy priorities shift

Data

A new report from the International Energy Agency makes one thing clear: data centres have become one of the world’s most powerful economic engines. Global spending on data centre infrastructure is set to reach $580 billion this year, surpassing investment in new oil supplies by roughly $40 billion. The IEA says the comparison reflects how deeply digital infrastructure is now embedded in modern economies.

The rapid expansion of AI and cloud computing is driving this spending surge. The IEA expects electricity consumption from AI-focused data centres alone to increase fivefold by 2030. That growth will double today’s total data centre energy use as model training, inference workloads, and hyperscale deployments accelerate. While conventional data centres will also consume more energy, their growth curve will be much flatter.

Half of all new demand is projected to come from the United States, with Europe and China making up most of the remainder. The geography of new builds follows clear patterns. The majority of planned data centres are located in cities with populations above one million, and nearly half of all upcoming sites will require at least 200 megawatts of capacity. Many developers are clustering new builds near existing data centre hubs to take advantage of established infrastructure, though this is creating new challenges.

Grid congestion is now one of the biggest obstacles to expansion. In places like northern Virginia, connection queues can stretch to a decade. Dublin has stopped accepting new grid interconnection requests until 2028. The IEA says the strain is compounded by supply chain issues affecting essential grid components, including transformers, cables, gas turbines, and critical minerals. Without upgrades, regions hosting dense data centre clusters will continue facing delays.

One potential solution lies in next-generation grid hardware. Companies such as Amperesand and Heron Power are developing solid-state transformers that can react more quickly to grid fluctuations, integrate renewable sources more effectively, and support a broader range of conversion tasks. These could mark a major improvement over legacy transformer technology, but commercial deployment is still at least a couple of years away, and full-scale production will take longer.

Despite current grid pressures, the IEA expects renewables to deliver the majority of new data centre power by 2035. Solar power, which has seen sharp cost reductions, has become a favourite among developers looking for scalable, predictable energy sources. Over the next decade, the agency projects that renewables will supply around 400 terawatt-hours of electricity to data centres, compared with roughly 220 terawatt-hours from natural gas. If small modular nuclear reactors reach commercial maturity, they could add another 190 terawatt-hours.

The shift in global investment highlights a structural change in how economies allocate resources. As digital services, AI workloads, and cloud platforms continue their rapid ascent, energy systems and infrastructure planning are being reshaped around computing rather than traditional extraction industries.