Amid Low Power Generation, IMF Says AI Growth Will Triple Electricity Demand In Nigeria

The growth of Artificial Intelligence (AI) will triple the demand for electricity in Nigeria, US and other countries in next five years, a report published by the International Monetary Fund (IMF) has said.

This is based on the report by IMF, titled, ‘AI Needs More Abundant Power Supplies to Keep Driving Economic Growth.’

According to the IMF report, AI needs more electricity for the data centers that make it possible.

IMF said, “As the Chart of the Week shows, electricity used by data centers alone, already as much as that of Germany or France, would by 2030 be comparable to that of India, third world’s largest electricity user. This would also leapfrog over the projected consumption by electric vehicles, using 1.5 times as much power than EVs by the decade’s end.

“Data center energy consumption is growing fastest in the United States, home to the world’s largest concentration of centers. Power needed for US server farms is likely to more than triple, exceeding 600 terawatt-hours by 2030.

“The boom in building new warehouses for data stored in the cloud and answering AI queries underscores the urgency for policymakers, who need effective energy strategies to ensure adequate supplies can meet surging demands.”

Nigeria faces huge electricity pressure as over 90 million lacks access to electricity.

Nigeria is actively developing its AI sector through initiatives like the National Artificial Intelligence (AI) Strategy, the National Centre for AI and Robotics (NCAIR), and the AI Academy Program.

According to the IMF report, increasing electricity demand from the technology sector will stimulate overall supply and possibly lead to only a small increase in power prices.

“More sluggish supply responses, however, will spur much steeper cost increases that hurt consumers and businesses and possibly curb growth of the AI industry itself,” the report said.

According to IMF, under current energy policies, the AI-driven rise in electricity demand could add 1.7 gigatons in global greenhouse gas emissions between 2025 and 2030, about as much as Italy’s energy-related emissions over a five-year period.

It said the demand for computing and electricity from AI platforms is subject to wide uncertainty.

The report noted that efficient, open-source AI models like DeepSeek lower computing costs and electricity demand.

However, reduced costs increase AI usage, and more energy-intensive reasoning models raise electricity demand.

“The net effect on electricity demand is still uncertain, which may delay energy investments, causing higher prices,” it added.

It urged policymakers and businesses to collaborate to ensure AI reaches its full potential while keeping costs low.

The report said they must also implement policies that encourage diverse energy sources to boost electricity supply, reduce price spikes, and limit emissions.

Amid Low Power Generation, IMF Says AI Growth Will Triple Electricity Demand In Nigeria is first published on The Whistler Newspaper