UAE faces surge in demand for energy amid data centre boom
Demand for energy is surging in the UAE as the country embraces the technology of the future, Minister of Energy and Infrastructure Suhail Al Mazrouei said on Tuesday.
He was speaking at the World Utilities Congress in Abu Dhabi, as the country forges ahead with new data centres and the population increases sharply.
With artificial intelligence as an emerging driver for society, governments should be 'very open to new ideas when it comes to efficiency improvement', Mr Al Mazrouei said.
'The demand is growing and growing very strongly, with more power required for data centres. It's overwhelming, I can tell you, even for a country like us in the UAE,' he added.
Last week saw the announcement of Stargate UAE, a mega data centre project to be built in Abu Dhabi by AI major G42, OpenAI, Oracle, Nvidia, Cisco and SoftBank Group. The one-gigawatt compute cluster will operate in the recently established five-gigawatt UAE–US AI Campus.
Mr Al Mazrouei said countries should look 'objectively' at the cost of energy. He also said many countries faced the problem of regulators being 'unable to adapt to the same speed as the industry'.
The renewable energy industry is 'very progressive' and has had to reduce the cost for end users, as well as 'improve the efficiency of the whole system', he added.
Mohamed Al Hammadi, managing director and chief executive of Emirates Nuclear Energy Company (Enec), said the AI boom required 'urgent action' to increase clean power – particularly nuclear – to meet rising global electricity demand.
'The world is waking up to the realities of grid security and the need for reliable, abundant, and clean electricity. If we want to lead in AI and digital infrastructure, we must lead in energy,' he said at the summit, addressing a panel exploring the global power outlook to 2030.
Data centres consume a significant amount of energy, with some using sustainable sources such as solar and water.
'We don't have a clear understanding of the net added energy demand,' said Francesco La Camera, director general of the International Renewable Energy Agency. 'And this is why if it's true that data centres will require [more] power, this power should be provided by renewables.
'It's also true that the use of AI … could reduce, in some way, the demand for energy for more efficient systems,' he told The National on the sidelines of the summit.
Opec+ should be 'mindful' of rising oil demand
Despite a growing focus on renewable energy, Opec+ should be 'mindful' about oil demand, said Mr Al Mazrouei.
The oil group, led by Saudi Arabia and Russia, are 'doing their best' to balance the market and ensure there is enough investment into the supply, he said.
'If this group was not there, there will be chaos … you will be seeing shocks and that is not good news for consumers,' the minister said.
On Friday, oil prices posted their first weekly decline since April amid worries over the latest talks between US and Iranian negotiators over the latter's nuclear programme. Prices were up in early trade on Tuesday.
Oil prices had earlier fallen on reports that Opec+ is planning to boost supply again in July. The supergroup of producers had announced output increases of 411,000 barrels per day for May and June – and is likely to announce a similar increase for July during its May 31 meeting, according to a Bloomberg report.
How Opec+ policy evolves during this year will depend on internal compliance issues and the broader developments in the oil market, analysts at Saudi Arabia's Jadwa Investment said in its oil market update for May. Opec+ is likely to scale back production increases later in the year as global inventories increase.
Despite the group's efforts, Mr Al Mazrouei said they may not be enough and it may 'need the help of others'.
AI energy solution
At the summit, the Abu Dhabi Department of Energy, in collaboration with G42 unit Presight, unveiled the Abu Dhabi Water and Energy AI Solution platform, which integrates power, water, district cooling and petroleum product systems into a centralised decision-making hub.
The platform has an initial target of generating Dh100 million ($27.2 million) at launch, and is expected to grow to Dh1 billion before 2028, according to Department of Energy chairman Abdulla Al Jarwan.
'This innovation will optimise operations, predict complex demand patterns, achieve real-time system visibility and significantly enhance customer behaviour for millions of users,' he said.
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