How Will IEA’s Energy & AI Observatory Help Sustainability?
The International Energy Agency has prompted excitement among sustainability leaders at the launch of its groundbreaking Energy and AI Observatory.
The observatory provides the latest data and analysis on the burgeoning links between the energy sector and artificial intelligence.
IEA says: “There has been a step change in the capabilities of AI, driven by falling computation costs, a surge in data availability and technical breakthroughs.
“There is no AI without energy; at the same time, AI has the potential to transform the energy sector.”
Energy for AI: the need for data
IEA says the “new and fast-moving field of AI requires a new approach to gathering data and information”.
It says the observatory aims to provide the latest data and a “comprehensive view of the implications of AI on energy demand (energy for AI) and of AI applications for efficiency, innovation, resilience and competitiveness in the energy sector (AI for energy)”.
It has been developed and will be maintained by the IEA, with data and insights from its energy industry and tech sector partners.
It includes maps of global data centre capacity and power use, plus a host of case studies outlining different AI use models.
Despite the electricity consumption of data centres being critical to understanding how AI is impacting energy demand, IEA says there are “no comprehensive global statistics on the electricity consumption of data centres”.
It adds: “The IEA has developed a global model that enables it to provide estimates of data centre electricity consumption by region and across time.”
The data centres challenge
IEA says investments in the data centres that are used to train and run AI models have grown rapidly, with gigawatt-scale clusters emerging in North America, Europe and Asia Pacific.
It adds: “AI is making data centres larger and more power-intensive, raising the importance of the availability of electricity generation capacity and grids in the locational decision-making of data centres.
“However, the existing infrastructure, policy frameworks and talent pools that enabled the top markets to flourish have created momentum that continues to draw new data centre development.”
IEA says that, as a result, there is a critical need for grid operators and policymakers to “understand how the data centre pipeline is evolving”.
Algorithms, processes and examples
The observatory currently contains 19 case studies, spread across buildings, industry, innovation, power, supply and transport.
They show how AI is being deployed across the energy sector to improve efficiency, reduce costs and drive competitiveness, enhance innovation, integrate new technologies and drive resilience.
They include Hitachi Energy’s study to improve the accuracy and process of forecasting energy prices by applying AI-driven probabilistic approaches, including advanced machine learning algorithms.
Six teams tested various methods and 10 algorithms, alongside reviewing data availability and algorithm tuning processes.
The processes and algorithms developed achieved 87% accuracy for CAISO locational marginal prices, 93% accuracy for MISO locational marginal prices and 86% accuracy for MISO ancillary service prices, compared to the industry expectation of 75% accuracy for predicting hourly, real-time, wholesale energy prices in US markets.
These modelling framework enhancements and algorithms have been built into a forecasting software solution called Nostradamus AI, enabling users to generate forecasts without any data science training.
Google and IBM
IBM Chief Sustainability Officer Christina Shim shared her delight at IBM’s inclusion among the case studies.
“I’m delighted that IBM contributed by sharing our work on the Electricity Access Forecasting AI model.
“The model was co-developed by IBM and UNDP and built on IBM watsonx, IBM Cloud and an open-source machine learning library.”
She adds: “It projects electricity access through 2030 across 102 Global South countries by evaluating drivers like population density, existing grid and off-grid infrastructure, urbanisation rates, terrain elevation and night-time satellite imagery, augmented with land use data from IBM Environmental Intelligence.”
Google CSO Kate Brandt, Sustainability Magazine’s 2025 number one woman in sustainability, said: “The International Energy Agency (IEA)’s new, first-of-its-kind Energy and AI Observatory creates a single, comprehensive reference, gathering crucial data and providing a global, informed vision on the impact of AI on the energy sector.
“Delighted that two of Google’s AI-powered solutions are featured.”
They are:
MethaneSAT
Kate says: “Monitoring methane emissions at scale has been a major challenge in identifying and reducing their sources.
“Google’s partnering with the Environmental Defense Fund on a new satellite, MethaneSAT, which can detect methane emissions from oil and gas production more accurately and precisely than ever before.”
Tapestry
Kate says: “X‘s moonshot for the electric grid is using AI-powered tools to help partners like CEN, Chile’s national grid operator, make grid planning smarter, faster and easier to help achieve its ambitious goal of carbon neutrality by 2050.
“I'm excited to see the many applications of how AI is being used today and new additions to the observatory over time.”
Explore the latest edition of Sustainability Magazine and be part of the conversation at our global conference series, Sustainability LIVE.
Discover all our upcoming events and secure your tickets today.
Sustainability Magazine is a BizClik brand
