The International Energy Agency (IEA) has published a report examining how governments and regulators can integrate rapidly expanding data centres into electricity systems while addressing energy affordability, sustainability and security. Prepared at the request of France’s G7 Presidency, Powering Artificial Intelligence reviews policies and regulatory approaches across 34 jurisdictions representing approximately 90% of global data centre capacity. The agency identified 134 policies and regulations governing data centre integration, nearly 40% of which were announced or implemented over the preceding 12 months.
The report highlights growing pressure on electricity networks as demand for AI computing infrastructure increases. According to the IEA, global data centre electricity consumption rose by 17% in 2025 and could double over the following five years. Governments are responding through measures to improve demand forecasting, reform grid connection queues and prioritise viable projects. Some jurisdictions are also introducing flexible connection arrangements or requiring data centres to contribute to electricity supply and grid stability. The IEA estimates that non-firm connections, which allow electricity demand to be restricted during periods of network stress, could unlock an additional 750–900 gigawatts of grid hosting capacity worldwide.
by Digital Watch Observatory – IEA proposes policies to manage AI data centre energy demand
