Empowering a sustainable digital future: Balancing innovation and energy

Authors: Sheikh Ali Alwaleed Al-Thani, CEO of Invest Qatar, and Santiago Bañales, Managing Director of Iberdrola Innovation Middle East

Digital transformation continues to revolutionise industries worldwide, driven by Artificial Intelligence (AI), cloud computing and Internet of Things (IoT). As a cornerstone of this shift, AI is fuelling smarter systems, better decision-making and scalable solutions. The shift toward hyperscale data centres and energy-efficient cooling is making our businesses and communities more connected.

However, this technological acceleration comes with a significant increase in electricity demand, underscoring the critical need for sustainable solutions. In 2024 alone, global investment in data centres reached half a trillion dollars, consuming approximately 1.5% of global electricity, around 415 terawatt-hours (TWh) according to the International Energy Agency (IEA). The United States led with 45% of this consumption, followed by China (25%) and Europe (15%). Since 2017, data centre electricity consumption has grown by 12% annually and is projected to more than double by 2030, reaching roughly 945 TWh, a little more than Japan’s current electricity consumption, driven largely by AI. Electricity consumption by AI-optimised data centres is expected to increase more than fourfold by 2030.

These projections raise an important question: how can we harness digital innovation without compromising sustainability? Striking the balance between innovation and responsible energy use will be essential to shape a sustainable digital future. This requires proactive efforts from governments, policymakers and businesses alike.

How digitalisation is driving growth in energy demand

Without strategic measures, the surge in digital services could strain power grids and lengthen the transition to sustainable energy sources. AI's growth is a major driver of this trend. A joint report by Invest Qatar and Iberdrola Innovation Middle East shows that AI consumes around 33 times more energy than specialised software. A single ChatGPT request uses up to 10 times more electricity than a Google Search.

Meanwhile, the rollout of 5G networks and the rise in IoT-connected devices, from smart homes to autonomous vehicles, expected to exceed 32 billion IoT devices by 2030, will significantly increasing electricity use. As digital infrastructure grows, the need for clean and renewable energy becomes increasingly critical.

Turning the tide: Digitalisation as the solution

While digitalisation drives energy demand, it also provides solutions to counteract its footprint and maximise efficiency in all energy-consuming sectors. For example, digitalisation significantly impacts the transport sector by enabling the collection, storage and analysis of data to enhance operations, safety, service quality and efficiency. According to the Invest Qatar – Iberdrola Middle East Innovation Report, Intelligent Transport Systems (ITS) have the potential to reduce energy use by 25% through decreased travel, modal shift and lower per-kilometre energy consumption. AI-driven analytics also play a critical role in enabling the transition towards a sustainable energy system. They support the optimisation of the planning and operation of generation and network assets, continuously balancing generation and demand, and optimising the management of electrical loads such as electrical vehicles, cooling and heating in real-time.

Global tech trends are driving future growth in enterprise adoption and digital transformation. (Invest Qatar – Iberdrola Report: “Digital Innovation for a Sustainable Future”

Hyperscale data centres are cutting energy waste through liquid cooling and AI-powered server optimisation. In Germany, AI-driven virtual power plants predict energy demand with a 94% accuracy, enabling smarter power distribution. Singapore's 2024 Green Data Centre Roadmap builds on its 2023 energy efficiency standards to drive sustainable data centre growth. As these technologies continue to evolve, they offer significant potential to reduce digitalization’s energy footprint.

In addition to implementing energy efficiency technologies to moderate the increase of energy demand, it is also critical that further investments in clean generation, storage and, most importantly, network reinforcements are properly planned and executed to avoid delays in the deployment of data centres.

Qatar’s role in balancing digital growth

As part of Qatar’s National Vision 2030 goals, digitalisation and economic diversification are key to balancing economic growth with sustainability. Qatar is integrating AI-driven energy solutions, smart cities and data centres to ensure technological progress without compromising environmental commitments.

Qatar’s smart city projects in Lusail and Msheireb are leveraging IoT-based energy management systems to optimise power use in real-time. Msheireb Downtown Doha, the world’s first sustainable downtown regeneration project, has reduced its energy consumption by 30%. The country is also scaling up its renewable energy initiatives. Recently, QatarEnergy announced the 2,000-megawatt (MW) Dukhan Solar Power Plant, set to double the country’s solar energy production to about 4,000 MW by 2030. This builds on existing projects, including the 800 MW Al-Kharsaah solar power plant, Qatar’s first large-scale solar power station and the two solar power projects in Ras Laffan and Mesaieed with a total capacity of 875 MW.

Qatar is also collaborating with global industry leaders, like Iberdrola, to advance its clean energy transition. Since 2018, the Doha-based Iberdrola Innovation Middle East has grown more than sixfold, advancing digital solutions for sustainable energy. In 2022, an agreement with Invest Qatar further strengthened its RDI efforts, developing AI tools to optimise electrical networks and boost efficiency across sectors, delivering solutions from Qatar to projects around the world, including in Spain, the UK, the US, Brazil and Australia.

A call for responsible digital growth

Global digital transformation is inevitable, and it is the responsibility of governments, businesses and tech leaders to promote responsible digitalisation policies with efficiency benchmarks. The paradox of digitalisation, driving both energy demand and efficiency, defines the future of innovation. AI will be central to this growth, enabling smarter systems and unlocking new opportunities. To ensure innovation drives sustainability, digital growth must advance energy efficiency along with the utilization of renewable energy sources. The future is digital, but it must also be sustainable.