Amir Saeed

Global electricity consumption by data technologies is expected to surge significantly by 2026, posing sustainability challenges that require targeted policies and collaborative efforts to promote energy efficiency and green digital infrastructure.

International Energy Agency estimates an increase of 35% to 128% by 2026, up from 460 terawatt-hours in 2022. According to the Asian Development Bank’s Harnessing Digital Transformation for Good Asian Development Policy Report, this surge is driven by the expanding use of digital devices, data centres, and network infrastructure. The report warns that if digital transformation is not properly managed, it could compromise sustainable development, particularly if the additional electricity demand is met by fossil fuels.

Middle-income economies in developing Asia will require higher energy consumption per device than high-income countries, due to the need to build new digital infrastructure and the lack of energy-efficient solutions. This raises the risk of increased emissions as these countries strive for universal connectivity. The report emphasises the need for sustainability-aligned digital policies to address these challenges. There is growing consensus that future growth in computing should come from green digital infrastructure.

Countries like China, South Korea, Malaysia, and Singapore have introduced regulations and standards for green data centres, and some use carbon pricing to promote energy efficiency and renewable energy adoption. Fiscal incentives can further encourage the development and use of sustainability-friendly digital technologies, such as smart technologies, big data analytics, and AI.  Collaboration between governments and the private sector is also recommended, including spectrum and infrastructure sharing to reduce costs and improve sustainability.

For example, the Shared Rural Network strategy for 4G with wireless backhaul technology could cut annual energy consumption by 16% in South Asia compared to non-sharing scenarios. Talking to WealthPK, Dr Saiful Mujahid Shah, a development economic researcher at University of Chitral, emphasised that the ADB’s findings are a wake-up call for policymakers and industry leaders. 

He added that the anticipated 128% increase in electricity consumption by data technologies is more than just a number – it illustrates the profound impact digital transformation is having on economies and societies. “Without prompt and effective measures, this rapid growth risks entrenching long-term environmental challenges. The report, however, offers a promising roadmap: focusing on green infrastructure, implementing strict energy efficiency standards, and encouraging innovation in sustainable technologies,” Shah pointed out. 

“It is essential for governments and the private sector to work closely together, especially in developing Asia, where the digital divide and energy demands are most pronounced. By integrating digital expansion with sustainability objectives, digital transformation can become a powerful driver of both economic development and environmental resilience,” Shah emphasised.

Credit: INP-WealthPk