AI’s Power Demand Is Reshaping the Energy Race

AI’s expansion is turning electricity into a constraint on digital growth. The International Energy Agency (IEA) projects that data centres will use about 950 terawatt-hours (TWh) of electricity in 2030, up from 485 TWh in 2025. The forecast covers data centres overall—not AI alone—and puts their 2030 use at roughly 3% of global electricity demand. 25

For Sembcorp, that demand is becoming a business opportunity in Singapore and beyond. Its approach combines gas-fired generation and long-term customer contracts with renewable power, storage and infrastructure. That mix may help provide dependable supply, but the balance between reliability and decarbonisation remains central.

Why AI growth means a bigger power-system build-out

The amount of electricity used over a year is only part of the challenge. Data centres and semiconductor facilities need power at their sites, while electricity systems must manage changing demand and variable renewable generation. That makes generation, storage and grid connections part of the same build-out—not interchangeable solutions.

The IEA expects renewables to meet nearly half of the additional electricity generation for data centres over the next five years, with natural gas and coal also contributing. It also estimates that 20–25 gigawatts of battery storage could be installed at data centres globally by 2030, potentially helping those facilities support the grid if incentives make that worthwhile. 2425

The available figures do not provide a single global price tag for the power-system investment needed to serve data centres. The IEA’s reported half-trillion dollars of global investment in 2024 was investment in data centres themselves, not an estimate of spending on power plants, storage or electricity grids. 20

Sembcorp’s Singapore strategy: supply, contracts and connections

Sembcorp’s planned 600-megawatt (MW) hydrogen-ready gas plant is scheduled for completion in the fourth quarter of 2026. The project is intended to add generation capacity; the “hydrogen-ready” description should not be taken to mean that it will run on low-carbon hydrogen from the outset. 1233

The company is also translating demand into supply agreements. It reported 120 MW of new long-term contracts with data-centre and high-tech manufacturing customers in 2025. In January 2026, an additional 150 MW agreement with Micron brought Sembcorp’s contracted supply to the chipmaker to 600 MW. 12714

The Micron relationship also illustrates why connecting power to a customer matters alongside contracting it. Sembcorp has described a direct-connection infrastructure agreement with Micron, although the available reporting does not give further detail on its scope. 5

Renewables and storage broaden the supply mix

Sembcorp reported 20.4 gigawatts (GW) of gross renewable capacity as of March 2026. Gross capacity is not the same as operating capacity: the figure includes projects under development and other capacity that may not yet be generating electricity. The company has also said it plans to invest S$10.5 billion in renewables over 2024–2028. 123744

Storage is another part of the portfolio. Sembcorp reported that its Jurong Island energy-storage system had increased to 326 megawatt-hours (MWh) following a battery-stacking project. Storage can help shift electricity across time, but it does not replace the need for generation or grid infrastructure. 50

The company’s investments are not all dedicated to AI demand. Examples include a 125 MW wind project awarded in Oman and renewable investments across its broader portfolio. Sembcorp has also acquired Australia’s Alinta Energy, expanding its energy business geographically. These activities should be understood as portfolio-wide moves, not as capacity reserved for data centres. 344

AI in energy operations: promise, not a measured outcome

Sembcorp and FPT have said they will explore AI-enabled applications for energy, utilities and urban infrastructure, including smart operations, predictive maintenance, data analytics and automation. That describes areas of work being considered; the available information does not quantify company-wide efficiency or safety gains from AI. 48

The unresolved balance: reliability and decarbonisation

Sembcorp’s strategy is a combination of near-term capacity and longer-term lower-carbon supply: gas generation and customer contracts sit alongside renewables and storage. The IEA’s outlook also points to multiple sources contributing to data-centre electricity demand, rather than a single technology meeting it all. 24

The distinction between capacity and actual generation matters. A large gross renewables portfolio does not show how much electricity is being produced at a given time, and a plant described as hydrogen-ready is not evidence that it is already operating on low-carbon hydrogen. The emissions outcome will depend on the electricity supplied in practice as demand grows. 122433