Page 11 - FIPI - Policy Economic Report - May 2025
P. 11
POLICY AND ECONOMIC REPORT
OIL & GAS MARKET
Figure 4: Electricity demand 2023; thousands of terawatt - hours
May 2025 Source- IMF
Data centre energy consumption is growing fastest in the United States, home to the world’s largest
concentration of centres. Power needed for US server farms is likely to more than triple, exceeding 600
terawatt-hours by 2030, according to a medium-demand scenario projection by McKinsey & Co.
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.
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.
The net effect on electricity demand is still uncertain, which may delay energy investments, causing
higher prices. Policymakers and businesses must work together to ensure AI achieves its full potential,
while minimizing costs. Implementing policies that incentivize multiple energy sources can enhance
electricity supply, help mitigate price surges and contain emissions.
4. Mapping the size of new US tariffs for developing countries- IMF
The United States has recently embarked on a change in its trade policy, departing from nearly a century
of gradually decreasing tariffs that had made US rates among the lowest in the world. Moreover, as a
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