Adriano Pires | Energy consumption will grow in the energy transition

IoT (Internet of Things); artificial intelligence; big data and analytics; cloud computing; blockchain etc. New technologies and innovations emerge every day that are part of the emerging Industry 4.0, also called the 4th industrial revolution. With them also comes a wave of investments in data centers to support their operations.

The consequences of the greater penetration of these solutions in economies are already becoming apparent in the energy sector. Whether directly, through its incorporation into processes in the sector’s production chain, or indirectly, with the increase in demand for electrical energy.

Data centers They are highly energy intensive and necessarily require an uninterrupted supply, representing a consumption class similar to the industrial one. It is precisely in the nature of consumption in these production units that one of the main challenges for planning the sector lies.

Due to intermittency, the generation of electrical energy from renewable sources, such as wind and photovoltaic solar, does not have the appropriate consumption profile for consumers. data centers. Thermoelectric plants are the main alternative for a safe and affordable supply to meet this demand, both those powered by natural gas and nuclear energy.

The growing demand for data storage and processing means that more and more companies are looking to install their data centers in locations that offer a combination of low cost, good infrastructure and reliable energy. This movement is not an unexpected phenomenon, however, its complexity and magnitude surprised planners.

The recent advent of AI and the popularization of cryptocurrencies have led to notable growth in energy consumption in these categories in the years since the Covid-19 pandemic. See the pace of this progress:

When analyzing data from the Industry 4.0 movement, it is important to note that, as many processes are related to emerging technologies, estimates of energy consumption may vary. A Morningstara North American market intelligence company, for example, estimated that data centers used at least 460 TWh of energy in 2022, with this consumption expected to double in 2026, when the category should exceed 1,000 TWh, approaching the total demand of highly energy intensive countries, such as Japan.

Aware of this volatile scenario, North American companies in the energy sector have already announced considerable investments to meet future energy demand. data centers. The prospect of growth in consumption fuels a national queue of requests for energy generation and storage projects for connection to the grid, which has increased from 2,000 GW in 2022 to 2,600 GW in 2023, according to recent data from the Lawrence Berkeley National Laboratory.

Another example of the market in the United States is that of PJM, a company that operates a significant portion of the electrical grid in the states of the Central-Atlantic region, where the largest concentration of electricity is located. data centers in North American territory. At the beginning of 2024, PJM tripled its demand growth projections for the year, due to the forecast expansion of data centers.

In relation to the impact of this industry on the energy sector, it is important to note the main processes that have been intensifying the pace of this technological expansion. In this regard, as highlighted previously, it is essential to talk about cryptocurrencies and AI.

Bitcoin is among the most visible and relevant changes shaping the transition to Industry 4.0. The first and most traded cryptocurrency in the world not only represents the technological advances that brought the 4th industrial revolution, but also the high cost of these technologies to electrical systems. It is estimated that maintaining the digital bitcoin chain will consume around 170.12 TWh annually, comparable to the total electricity production in Sweden in 2022.

In the case of AI, as it is a recent technology and has potential for application in various fields, its future impact is still being measured. The fact is that the adoption of AI systems has been rapid and widespread. Given this pace, there are estimates that global AI-related electricity consumption could increase by 85 to 134 TWh/year over the next 3 years.

BRAZIL IN THE 4TH INDUSTRIAL REVOLUTION

Considering the consumption profile of these new technologies and their accelerated pace of expansion, how does Brazil fit into the context of Industry 4.0?

In Brazil, as in the rest of the world, the installation of data centers it usually follows the distribution patterns of large industrial and consumer centers, where the majority of data transit occurs in a country. With a strong presence in the Southeast and South regions, and an expansive movement in the Northeast, the location of data centers corresponds to the main development poles of the country’s services, industry and logistics sectors.

It is worth highlighting that the market for data centers São Paulo corresponds to the largest in the Americas outside the United States, reinforcing the correlation between population centers and the demand for data processing.

At this juncture, Brazil has a comparative advantage because of its potential for natural gas production and nuclear generation. The interest demonstrated by the government in the growth of the national gas supply and in promoting the fuel as the energy for reindustrialization, in programs such as Gas to Use, can be an opportunity for investors looking for affordable energy, robust infrastructure and potential proximity to urban and industrial centers. The expansion of Industry 4.0 is already a reality and planning for the national energy sector must take this into account.