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For tech entrepreneur Elon Musk, the answer to the rocketing energy needs of artificial intelligence (AI) data centres is to launch them into space, where they could tap limitless energy from the sun. But until that happens, the places on Earth where these number-crunching mega-hubs are located face big spikes in electricity demand to run them.

In the US, this has sparked fears of higher energy prices for consumers. To allay those concerns, President Donald Trump will reportedly convene big tech firms this week to sign a pledge to provide or pay for the extra energy supplies they will need as their AI data centres expand.

According to the International Energy Agency (IEA), data centres accounted for 1.5% of electricity demand worldwide in 2024 – a share set to rise to about 3% by 2030. Overall, data centre demand is expected to more than double to about 945 terawatt-hours (TWh) by then, which is slightly above the electricity consumption of Japan today.

AI data centres, where AI models are trained and deployed, put far more strain on power supplies than traditional data centres, which each use between 10 and 25 megawatts (MW). In comparison, demand from a “hyperscale” AI centre can exceed 100 MW at any given time, which if running at full capacity could consume as much electricity in a year as 100,000 households.

Data-centre electricity consumption in household electricity consumption equivalents (million households), 2024

(Source: IEA, Paris, 2025, Licence: CC by 4.0)

(Source: IEA, Paris, 2025, Licence: CC by 4.0)

We look at where this power might come from and whether, as some warn, AI is going to blow the world’s efforts to transition away from fossil fuels out of the water.

Why does AI need so much electricity?

AI data centres differ in how they use electric power. In a conventional data centre, data requests from businesses, individuals and other users come in a randomised way, translating into a steady load level on the servers, with relatively little fluctuation in demand.

But in an AI data centre, processors need to go through training or learning periods, using so-called “graphical processing units”. These are synchronised, being started up and switched off at the same time. This translates into “power bursts”, which last just a few seconds, but happen very frequently and concurrently, according to Gerhard Salge, chief technology officer at Hitachi Energy.

“That is a different challenge than just providing the power and the energy for the conventional data centres,” he told journalists at the International Renewable Energy Agency assembly in Abu Dhabi earlier this year.

Here, officials and business executives discussed how to meet those demand peaks, noting they cannot be dealt with just by installing huge batteries as those would wear out quickly.

Martin Pibworth, chief executive of SSE, a Scotland-based energy firm, said AI-led demand will put pressure on the power system, but “the problem we all have is no one really knows the pace and trajectory of that demand lift”. In the UK, the government’s Clean Power Plan will be needed to make sure electricity operators can meet demand from AI and other data centres as more come online, he added.

    In the US, meanwhile, the Trump administration is eager to ensure that communities that are home to data centres, as well as the wider public, do not turn against the industry due to its perceived unfairly high use of energy and water.

    Ahead of a meeting scheduled on March 4, where US tech titans are due to sign a pledge on powering their own data centres, White House spokesperson Taylor Rogers told CNBC: “Under this bold initiative, these massive companies will build, bring, or buy their own power supply for new AI data centres, ensuring that Americans’ electricity bills will not increase as demand grows.”

    Will electricity for data centres and AI come from clean or dirty sources of energy?

    The answer to this question is key to how countries tackle climate change, as it will affect their energy mix, how electricity is produced and distributed, and therefore the trajectory of their greenhouse gas emissions. Decisions made by governments and businesses will shape how the AI industry powers the technology on which it relies.

    Under pro-fossil fuel Trump, the US has walked away from policy support for clean energy, meaning data centre operators can choose their energy sources freely. In January, data from Global Energy Monitor (GEM) showed the US now has the most gas-fired power capacity in development, surpassing China and accounting for nearly a quarter of the world’s total.

    More than one-third of this capacity is set to directly power data centres on-site, in hotspots like Texas, and many more grid-connected gas-fired projects are planned to meet an expected increase in energy demand from AI, GEM said.

    On the other hand, some tech companies – especially multinationals – have set goals to cut their emissions to net zero, and so are choosing to power their data centres with renewables, including in the US.

    For example, French energy giant TotalEnergies recently signed two long-term Power Purchase Agreements (PPA) to deliver 1 gigawatt (GW) of solar capacity for Google’s data centres in Texas. This followed two other PPAs with Google for 1.2 GW secured by Clearway, a California-based renewables company 50%-owned by TotalEnergies.

    Sources of global electricity generation for data centres – base case, 2020-2035

    (Source: IEA, Paris, Licence: CC by 4.0)

    (Source: IEA, Paris, Licence: CC by 4.0)

    Some countries are also moving to ensure the power needed for AI and the data centre industry is produced using clean energy.

    In Ireland, an effective ban on new data centre connections was lifted in December, provided at least 80% of the centres’ annual energy demand is met by new renewable electricity sources. The government also plans to build Green Energy Parks, where data centres can be located alongside renewables plants to avoid straining the national grid.

    Salge of Hitachi Energy said that with big investors wanting to drive investment in AI data-crunching so fast, “there is no other power generation technology than variable renewables which you can build in such a timeline” of two to three years. “Anything else will be in the 2030s and later,” he added.

    Some governments – such as Sweden’s centre-right coalition have proposed nuclear as a clean energy solution for AI data centres, saying they could fuel a “renaissance”. But building nuclear power plants requires massive investment and long timelines, while new small-scale modular reactors are not yet commercially available.

    How are power systems and regulators coping so far?

    In a February report forecasting electricity demand out to 2030, the IEA said AI and data centres are contributing to generation growth in advanced economies, which is now accelerating again after 15 years of stagnation. However, it flagged bottlenecks in connecting new data centres, because grids are not being built or improved fast enough to keep up with rising power demand, forcing big customers to wait.

    The report noted that at least 150 GW of queued data centre projects are estimated to be in the advanced stages, while one-fifth of the global data centre build-out is at risk of delay due to grid congestion.

    Comment: Using energy-hungry AI to detect climate tipping points is a paradox

    Planning, permitting and completing new grid infrastructure can take five to 15 years, whereas data centres need one to three years. Prices for key grid components have also nearly doubled over the past five years, the IEA noted.

    The European Commission, meanwhile, aims to support those operators that can save on energy use. It plans to adopt a “Data Centre Energy Efficiency Package” in April that will contain an assessment of data submitted under a reporting scheme, introduce a rating scheme for data centres in the EU, and start work on minimum performance standards.

    Can AI help to resolve the issue?

    Experts say it’s important to look at both sides of the coin, pointing to ways in which AI can contribute to more effective power grid management and integration of renewables into national power supplies.

    According to new analysis by energy think-tank Ember, AI applications such as short-term renewables forecasting, predictive maintenance, and real-time monitoring and adjustment of transmission line capacity can deliver operational improvements in power systems.

    It estimates that AI could enable Southeast Asian nations, for example, to reduce their power sector costs by $45 billion-$67 billion through to 2035, depending on how much renewable energy they deploy. Potential AI-driven efficiency gains could cut emissions by 290 million to 386 million tonnes of CO2 over the next decade in ASEAN countries, it adds.

    “While power-hungry AI might initially stress the power systems, with various powerful applications it has the potential to significantly accelerate the energy transition and offset consumed energy rapidly,” Ember data analyst Lam Pham said in a statement.

    The post Explainer: Will AI data centres make or break the energy transition? appeared first on Climate Home News.

    Explainer: Will AI data centres make or break the energy transition?

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    New Zealand moves to protect business with law curtailing climate litigation

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    New Zealand’s parliament has adopted a controversial new law blocking a whole avenue of climate litigation and shutting down its most advanced corporate lawsuit, which has been blamed by the government for shaking business confidence and investment.

    The Climate Change Response (Tort Liability) Amendment Bill, expected to take effect in the coming days after it is formally signed by the Governor-General, prevents all current and future civil claims for climate loss or harm under tort law.

    Justice minister Paul Goldsmith said last week that the aim was to give businesses “certainty around their climate change obligations”, noting it would not alter the government’s responsibilities under the Climate Change Response Act 2002 nor business obligations under the Emissions Trading Scheme.

    “Our response to climate change is best managed by the Government at a national level and not through piece-meal litigation in the courts,” he added in a statement.

    Such litigation, he said, “risks developing a new regime that contradicts the framework Parliament has already enacted” to tackle climate change.

      Goldsmith singled out a key domestic climate lawsuit brought by Northland iwi leader and activist Mike Smith against six big companies: dairy firms Fonterra and Dairy Holdings, energy firms Genesis Energy and Z Energy, New Zealand Steel and coal mining firm BT Mining. A seventh original defendant, Channel Infrastructure, was dropped after it permanently decommissioned its Marsden Point oil refinery.

      Smith argued that these companies had caused him harm under public nuisance and negligence law, as well as a third breach of a duty to cease contributing to climate change that has yet to be tested domestically. He did not seek financial compensation, instead asking for the companies to immediately stop emitting or contributing to net greenhouse gas emissions.

      In one of the most advanced corporate climate accountability lawsuits in the world, a trial had been scheduled for April 2027 after the Supreme Court unanimously allowed the case to continue.

      Corporate lobbying in the shadows

      Smith described the passing of the bill as “deeply concerning”, particularly as it coincided with the Supreme Court hearing another of his climate lawsuits. In that case, Smith v Attorney-General, he argues that the government’s response to climate change and its impacts on Māori communities in particular breaches rights to life and culture.

      “That timing raises profound questions about the separation of powers and the rule of law,” said Smith. “Whatever one’s view of the merits of these cases, it is deeply troubling when parliament intervenes to remove a legal pathway while the courts are actively considering fundamental questions about climate responsibility, rights and the crown’s obligations.”

      The bill – which says that no person (including the government) can be found liable in tort for emissions-related climate change effects – followed major lobbying efforts by the companies defending themselves in Smith’s lawsuit. They outlined a proposed legal amendment in a briefing note to the government in 2024.

      The centre-right government has been fiercely criticised over its lack of transparency in relation to this lobbying activity. The national ombudsman recently found that the Prime Minister’s Office effectively withheld information requested by the Environmental Law Initiative about meetings, discussions and conversations regarding Smith’s case.

      Green groups fail to stop bill

      The bill sparked huge concern among environmental campaigners in New Zealand and elsewhere. Greenpeace Aotearoa called it a “shocking abuse of executive power” and the vast majority of submissions to a parliamentary inquiry said it should be rejected.

      But in the end, it was adopted with little resistance, moving relatively smoothly through parliament, passing its third reading by 67 votes to 53. Sam Bookman, climate law lecturer at Melbourne Law School, told Climate Home News he was not surprised by this, given that the coalition government has a secure majority.

      A complaint has been made to the UN special rapporteur on climate change and human rights by Smith, the National Iwi Chairs Forum Pou Tikanga and youth coalition Climate Clinic Aotearoa over what they see as the government’s heavy-handed approach. Smith is also challenging the new law in yet another lawsuit.

      “Pathetic”: New Zealand plans to barely cut emissions between 2030 and 2035

      Bookman thinks it “very unlikely” that such a challenge will succeed, noting that New Zealand’s constitution is firmly anchored in parliamentary sovereignty.

      But the expert in climate law does not see the bill as the end of legal action in the country, noting that New Zealand has a “sophisticated climate litigation landscape with a growing number of specialist and experienced lawyers and NGOs”.

      The country is also approaching its next general election in November, and some opposition parties have pledged to restore access to the courts if elected.

      Amanda Larsson, global project lead on agriculture for Greenpeace International, said: “This law deserves to be tested, and I strongly encourage the international climate litigation community to unite and help defend New Zealanders’ fundamental right to hold polluters accountable before this becomes a global blueprint.”

      Copycat legislation on the rise

      New Zealand’s move is part of a small but growing legislative effort to shut down climate litigation around the world.

      In the US, Republican politicians introduced legislation in the House and Senate in April that would shield fossil fuel firms from climate liability lawsuits. Similar laws have already been passed at state level in Tennessee, Utah, Iowa and Louisiana.

      The German state of Bavaria has put forward a similar proposal to the Federal Council, aiming to block private climate claims as well as the recognition and enforcement of foreign judgments imposing such liability. There are also proposals to limit available remedies and actions in the Netherlands and Belgium.

      UN General Assembly backs “climate obligations” set by world’s top court

      Bookman said he expects more efforts to counter climate damages litigation and advised plaintiffs to think about how to respond, including drawing on broader support in opposing them.

      “Even though it’s very hard for plaintiffs to win these types of cases, companies are very eager to avoid the expense, embarrassment and political accountability that come even with unsuccessful lawsuits,” he said.

      The post New Zealand moves to protect business with law curtailing climate litigation appeared first on Climate Home News.

      New Zealand moves to protect business with law curtailing climate litigation

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      Indonesia’s nickel production cuts are not enough to create a sustainable industry 

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      Bhima Yudhistira Adhinegara is the Executive Director of the Center of Economic and Law Studies (CELIOS), an Indonesia-based economic think tank. Muhammad Zulfikar Rakhmat is the Director of the China-Indonesia desk at CELIOS. 

      Indonesia produces around 60% of the world’s nickel, a metal used to manufacture batteries for electric vehicles (EVs) – more than any other country in the world. But in 2026, the government sharply reduced how much of its nickel can be extracted from the ground.

      Production quotas were reduced by around 40% this year compared to 2025. Weda Bay, the largest nickel mine on Earth, had its allowance cut by more than 70% and exhausted its full-year quota by the end of May, halting mining entirely; it cannot resume large-scale extraction until next year unless regulators grant an extension.

      The policy has sparked a vivid debate in Indonesian policy circles: how can the country shift its strategy from a decade of mining vast quantities of cheap nickel to producing a high-value and low-carbon material that the rest of the world wants for EV batteries.

      The cuts aren’t a silver bullet to clean up Indonesia’s nickel industry, whose smelters are powered by coal – the most polluting fossil fuels. But alongside stricter enforcement of environmental rules, it is one side of efforts to produce more sustainable nickel for a premium.

      Restricting Indonesia’s nickel output

      Production quotas were introduced to stop the collapse of nickel prices because of oversupply in the market. Prices had fallen more than 40% in 2023 alone and kept sliding as Indonesian supply kept growing, hitting a four-year low of around $13,900 a ton in late 2025.

      Critics called the recent tightening of production quotas proof that Indonesia’s nickel strategy has failed, arguing that the industry shouldn’t need to throttle its own output to survive. But when assessed against what the policy was supposed to do – push up nickel prices – it has worked. Prices jumped to $20,000 a ton in May, the highest since 2024.

        Chinese industry groups representing companies that have invested billions to mine and refine the country’s nickel were furious, warning Indonesia’s president Prabowo Subianto that the cuts put $50 billion worth of investment at risk. But much of that Chinese capital is sunk into smelters and processing plants built specifically to run on Indonesian ore, and cannot simply be moved elsewhere. That gives Jakarta more room to hold its ground than the warning suggests.

        Stronger environmental enforcement

        Since the start of the year, Indonesia’s forestry task force has seized more than four million hectares of land from mines and plantations operating illegally in protected forests, collecting over two trillion rupiah ($113 million) in fines.

        This included 148 hectares seized from Weda Bay for lacking a forestry permit. The share of nickel produced from illegal small-scale mining also fell from about a quarter in 2022 to roughly 10% by 2024.

        The crackdown responds to serious environmental damages in the nickel industry. On Obi Island, a waste pond collapsed after heavy rain in June 2025, flooding three villages and killing a resident. Internal company tests found chromium-6 – a carcinogen – in the water, in quantities far above the legal limit. The footprint of another mine near Raja Ampat, which is home to some of the world’s richest coral reefs, grew 60-fold in just eight years.

        A coastal village is wedged between the sea and a large nickel mine in Indonesia
        The fishing villages of Tapunggaya in Sulawesi, Indonesia, are squeezed between the sea and an expanding nickel mine (Photo by Garry Lotulung/NurPhoto)

        The market is responding to early cleanup efforts. Low-carbon nickel now sells for a real premium, roughly $18,800 to $19,300 a ton compared with $17,900 to $18,300 otherwise, as carmakers seek to source cleaner materials to comply with the European Union’s new emissions rules for imports.

        In turn, this is incentivising the industry to do more to green its operations. Vale Indonesia’s smelter in South Sulawesi now runs almost entirely on hydropower, for example.

        None of this addresses coal use, however. Major Indonesian nickel producers still emitted an estimated 15 million metric tons of greenhouse gases in 2023. Indonesia may be cracking down on illegal mining and rewarding cleaner producers but it is still running its mines on the dirtiest fuel available.

        Unequal benefits

        For Indonesia to truly benefit from producing cleaner and high-value nickel, it needs to reap the economic benefits too. Although the industry has boosted the country’s economic growth, the reality on the ground tells a different story.

        Konawe in Southeast Sulawesi is home to a major smelting complex. Growth in the district jumped from 6% to 22% between 2015 and 2023, driven almost entirely by the nickel industry, according to a study by the Lowy Institute study. At the same time, poverty levels increased slightly and unemployment remained unchanged.

          In Halmahera, another epicentre of the nickel industry, spending by the poorest fifth grew just 5% between 2019 and 2022, compared with 28% for the wealthiest fifth, according to a separate study.

          Part of the reason for this inequality is the system for transferring mining royalties to district authorities where the mines are located. In theory, they are entitled to the largest share. But in practice, payments are delayed, companies routinely dispute what they owe and royalties are pooled and distributed across a larger area.

          The Natural Resource Governance Institute has found that decentralisation handed local governments power to approve new mines faster than they could build their capacity to manage them. Higher output raises national income on paper, but local governments remain constrained by fiscal rules and infrastructure costs that scale with mining.

          None of this makes the 2026 quota cuts a mistake. Indonesia has every right to defend its pricing power over a resource it controls. But limiting extraction isn’t going to fix underlying issues around environmental enforcement and revenue-sharing. That requires rules that are consistently enforced, royalties that reach communities living by the mines, and a plan to wean smelters off coal.

          The post Indonesia’s nickel production cuts are not enough to create a sustainable industry  appeared first on Climate Home News.

          Indonesia’s nickel production cuts are not enough to create a sustainable industry 

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          Risk of “catastrophic” oil spill reaching Kimberley coast found in Woodside’s Scott Reef gas drilling plans

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          SYDNEY, Monday 24 August 2026 – New analysis of Woodside modelling released by Greenpeace Australia Pacific and Environs Kimberley has revealed the oil and gas corporation’s plans to drill at Scott Reef could cause an oil spill up to 30 times bigger than the 2009 Montara disaster, impacting the Kimberley coastline and reaching as far as Indonesia.

          The new analysis details the “catastrophic” oil spill risk put to environmental regulators for approval by Woodside in its Browse to North West Shelf Project (Browse) plans, the worst-case scenario being a blowout directly below Scott Reef, polluting whale migratory pathways and covering isolated turtle nesting ground with oil condensate.

          An FOI application (F348) revealed the federal environment department (DCCEEW) asked offshore oil and gas regulator NOPSEMA to look into the oil spill risk in 2025. NOPSEMA’s response to the application refused access to its report, and one document shows DCCEEW sought further advice this year.

          Greenpeace and Environs Kimberley are calling on the Federal Government to publicly release the NOPSEMA report given the risk of an uncontrolled release of oil condensate from directly below Scott Reef.

          Hannah Schuch, Senior Campaigner at Greenpeace Australia Pacific, said: “Woodside is aware that drilling at Scott Reef risks a massive oil spill that would have severe, far-reaching consequences. It appears environmental regulators are aware too.

          “The state and federal governments need to take this risk from Woodside’s drilling plans seriously, as they could end up allowing the worst oil spill in Australian history.

          “The pygmy blue whales that migrate up and down the WA coast with their newborns each year could be swimming and feeding in toxic, oil-slicked water. Woodside’s proposal to drill at Scott Reef is an environmental disaster waiting to happen, and the WA and federal governments have one surefire way to prevent catastrophe — reject Browse.”

          Martin Prichard, Executive Director at Environs Kimberley, said: “A catastrophic oil spill by Woodside would be disastrous not just for marine life in the area but also for the Kimberley’s $500 million tourism industry.

          “The state and federal governments will see five marine parks on the Kimberley coast included in the risk area of a catastrophic Woodside oil spill.

          “The Montara oil spill was disastrous for West Timor with the toxic oil destroying seaweed farmers’ livelihoods. The Kimberley dodged a bullet with Montara, we were lucky the spill didn’t head our way. Myself and a crew flew over the Montara oil spill and followed it as far as we could. It was like a scene from a disaster movie.”

          After the WA Environmental Protection Authority deemed Browse “unacceptable” due, in part, to oil spill risk, Woodside submitted a mitigation plan based on technology that has never been used “in anger”, a weakness stated in an independent expert review of the plan.

          Professor Richard Steiner, independent oil spill expert, said: “A large offshore spill is impossible to effectively contain or recover. Historically, only 2-6% of total spill volume is recovered and the ecological injury from the release of toxic hydrocarbons in the sea can be severe, extensive, and long-term.

          “Here in Alaska, government research concludes that several marine populations injured by the 1989 Exxon Valdez oil spill, including whales, fish, and seabirds, are still not recovering today, 37 years later. We should expect similar long-term ecological impacts in Western Australia if there were to be a major oil spill. The only sure way to avoid the risk of a catastrophic marine oil spill is to not develop oil and gas projects in marine environments.”

          -ENDS-

          Media contact

          Emma Sangalli on emma.sangalli@greenpeace.org or 0431 513 465

          Risk of “catastrophic” oil spill reaching Kimberley coast found in Woodside’s Scott Reef gas drilling plans

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