Clean AI: On AI Data Centres and Energy Demand

Clean AI: On AI Data Centres and Energy Demand 28 Apr 2025

Clean AI: On AI Data Centres and Energy Demand

The IMF report assures that AI’s economic benefits will outweigh its environmental costs, emphasizing the need for integrating renewable energy into AI development.

IMF Report

  • Optimistic Report: The International Monetary Fund’s (IMF) recent report highlights that the economic benefits of Artificial Intelligence (AI) applications are likely to outweigh the environmental costs associated with the increased energy demand required by AI data centres.
  • Reassurance: This finding offers reassurance that AI technology does not fundamentally conflict with the global drive for sustainable growth.

Renewable Energy’s Role in AI Development

  • Sustainable AI: Countries well-prepared with renewable energy generation will face lower social and environmental costs as they pursue their AI goals.
    • While India’s AI infrastructure (funded indirectly through the IndiaAI Mission) is not yet large enough to heavily impact the nation’s overall energy mix, there is a clear need for renewable energy to be integrated into AI development.
  • Government’s Approach: India’s government has already outlined its approach to addressing the environmental concerns of AI at the AI Action Summit in Paris earlier this year. 
    • This approach signals a move towards ensuring that AI growth is aligned with sustainable practices.
  • Energy Consumption Challenge: AI is poised to consume immense amounts of electricity, which can lead to higher energy prices and increased emissions.
  • IMF Report:  According to the IMF report, in the United States, where AI computing capacity is the largest globally, AI expansion alone could increase electricity prices by up to 9%
    • This would add to the price pressures from various other sectors, further highlighting the necessity for renewable energy.
  • Opportunity for Renewable Energy: AI’s reliance on data centres offers a unique opportunity to integrate renewable energy.  
    • Many Indian firms have already begun purchasing renewable energy, and the vast land areas occupied by data centres make them ideal candidates for solar energy integration.
    • These facilities could complement their energy needs with solar cells or even explore the potential of nuclear energy.
  • Environmental Impact of AI: While the electricity consumption of AI technology is a significant concern, it is not the only environmental footprint that the AI age will leave behind.  
    • AI also involves the large-scale mining of minerals, extensive water usage, and the production of effluents during the manufacturing of electronics for the AI supply chain.
  • Electronics Manufacturing: As India seeks to grow its electronics manufacturing sector, addressing the environmental impact of this industry becomes crucial.
    • The country’s ambitions for global leadership in electronics must be coupled with a sustainable approach to mineral mining and water usage.

Way Forward

  • Small Modular Reactors (SMRs): Nuclear energy, especially in the form of small modular reactors (SMRs), could be a crucial addition to the energy mix of emerging AI data centre clusters
    • When paired with renewable sources, these SMRs could significantly reduce emissions, making the expansion of AI more environmentally sustainable.
  • Sustainable Practices: India must focus on adopting environmentally responsible practices in electronics production. 
    • This includes reducing the environmental impact of the mining process, using recycled materials, and ensuring water conservation during production.
  • Scaling Down Conventional Emissions: India’s net zero target for 2070 necessitates scaling down conventional sources of emissions that contribute to climate change. This includes reducing emissions from sectors like fossil fuels, manufacturing, and transportation.
  • Managing Growing Energy Demands: Simultaneously, India must manage the rising energy consumption from industries such as AI, electronics manufacturing, and other sectors that are set to expand globally. 
    • The key will be to balance economic growth with sustainable practices to ensure that energy demand does not outpace the adoption of renewable energy sources.

Conclusion

To meet its net zero target, India must strategically address the environmental challenges posed by the AI and electronics manufacturing sectors. By adopting sustainable practices and focusing on renewable energy sources, India can meet its ambitious economic goals while minimizing the environmental impact of its growing industries.

Mains Practice

Q. Evaluate the potential environmental challenges posed by the rapid growth of AI data centres in India. How can the government ensure that the expansion of AI infrastructure aligns with India’s long-term sustainability goals, especially considering the need for renewable energy? (15 Marks, 250 Words)

Archive Calendar

Mon Tue Wed Thu Fri Sat Sun
 123
45678910
11121314151617
18192021222324
25262728293031

Need help preparing for UPSC or State PSCs?

Connect with our experts to get free counselling & start preparing

Know about Physics Wallah

Physics Wallah is an Indian online education platform, that provides accessible & comprehensive learning experiences to students of classes 6 to 12 and those preparing for JEE and NEET exams. We also provide extensive NCERT solutions, sample papers, NEET, JEE Mains, BITSAT previous year papers, which makes us a one-stop solution for all resources. Physics Wallah also caters to over 3.5 million registered students and over 78 lakh+ Youtube subscribers with 4.8 rating on its app.

We Stand Out because

We successfully provide students with intensive courses by India's qualified & experienced faculties. PW strives to make the learning experience comprehensive and accessible for students of all sections of society. We believe in empowering every single student who couldn't dream of a good career in engineering and medical field earlier.

Our Key Focus Areas

Physics Wallah’s main focus is to create accessible learning experiences for students all over India. With courses like Lakshya, Udaan, Arjuna & many others, we have been able to provide a ready solution for lakhs of aspirants. From providing Chemistry, Maths, Physics formulae to giving e-books of eminent authors, PW aims to provide reliable solutions for student prep.

What Makes Us Different

Physics Wallah strives to develop a comprehensive pedagogical structure for students, where they get a state-of-the-art learning experience with study material and resources. Apart from catering students preparing for JEE Mains and NEET, PW also provides study material for each state board like Uttar Pradesh, Bihar, and others.

Aiming for UPSC?

Download Our App

# #
Quick Revise Now !
AVAILABLE FOR DOWNLOAD SOON
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध
Quick Revise Now !
UDAAN PRELIMS WALLAH
Comprehensive coverage with a concise format
Integration of PYQ within the booklet
Designed as per recent trends of Prelims questions
हिंदी में भी उपलब्ध

<div class="new-fform">






    </div>

    Subscribe our Newsletter
    Sign up now for our exclusive newsletter and be the first to know about our latest Initiatives, Quality Content, and much more.
    *Promise! We won't spam you.
    Yes! I want to Subscribe.