Electricity has always been the quiet utility in the background — flip a switch, don’t think too hard. Artificial intelligence has ended that arrangement. AI doesn’t just think; it draws power, and a lot of it.
According to the APEC Energy Demand and Supply Outlook, 9th Edition, electricity demand across APEC economies is on track to rise by up to 96 percent by 2060, driven by electrification, transport shifts — and the explosive growth of data centres running AI workloads. The future, it turns out, runs on electrons, not vibes.
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Launched in Tokyo last week, the Outlook projects electricity generation rising from 18,971 terawatt-hours in 2022 to 32,690 TWh by 2060 under current policies — a structural shift away from direct fossil fuel use toward electricity across transport, buildings and industry.
It’s a transformation powered less by lightbulbs and more by server racks. AI models, cloud computing and always-on digital services are becoming some of the hungriest customers on the grid.
“The Outlook supports member economies in navigating the evolving energy landscape by identifying key challenges and opportunities in the energy sector,” said Dr Kazutomo Irie, Chairman and President of the Asia-Pacific Energy Research Centre, which has produced the flagship report since 1996. In short: the machines are learning fast, and the grids are scrambling to keep up.
AI, data centres and the new baseload problem
Buildings were once the dull chapter in energy forecasts — predictable, incremental, manageable. AI has changed that. The report notes that electricity demand in buildings continues to climb largely because of data-centre expansion and artificial intelligence workloads, even as efficiency gains slow growth elsewhere.
Training large AI models, storing vast datasets and running inference around the clock has effectively created a new class of industrial electricity user — one that doesn’t clock off at 5pm.
This matters because data centres don’t just need energy; they need reliable, high-quality power, pushing demand for grid upgrades, redundancy and backup generation. When AI stalls, markets notice. When power stalls, AI notices first.
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Transport plugs in, oil steps back
AI isn’t acting alone. Electrification of transport is the other heavyweight on the demand side. By 2060, electric vehicles are projected to make up 60 percent of the vehicle fleet under current policies — and 96 percent if stated targets are met.
Oil use drops sharply, but electricity demand surges. Every EV charger is effectively another data point on the grid — predictable, yes, but relentless.
Together, AI and EVs are reshaping electricity from a supporting actor into the lead role of the energy system.
Renewables rise — but so do costs
On the supply side, the Outlook projects renewables growing from 26 percent of electricity generation in 2022 to 55 percent by 2060, and 64 percent if economies meet their stated targets.
Coal continues its long decline, falling as much as 74 percent under target scenarios.
Natural gas, however, remains stubbornly present, rising 58 percent under current policies, a reminder that the energy transition is more marathon than sprint.
That transition carries a hefty price tag. APERC estimates USD 57 trillion in cumulative investment in power and hydrogen systems between 2025 and 2060 under current policies — rising to USD 91 trillion if full emissions-reduction targets are pursued.
Savings from reduced fossil fuel use, while substantial, don’t come close to covering the cost of new generation, grids, storage, hydrogen infrastructure and backup capacity.
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The grid becomes the battleground
“No economy can secure reliable, affordable and sustainable energy alone,” said APEC Executive Director Eduardo Pedrosa at the Tokyo launch. That interdependence is becoming painfully clear as electricity demand rises faster than overall energy use.
The Outlook warns that the next decade is critical: delay grid expansion, storage deployment or low-carbon investment, and economies risk higher prices, supply volatility and political blowback.
AI didn’t ask permission to become energy-intensive. It just showed up, plugged in and started learning. The challenge now is whether electricity systems can scale fast enough — and cleanly enough — to support an economy where intelligence, mobility and infrastructure are all running on the same wire.
The future may be digital, but it is very, very physical. And it hums at 240 volts.
APEC Energy Demand and Supply Outlook Vol.1
APEC Energy Demand and Supply Outlook Vol.2
Published every three years by the Asia-Pacific Energy Research Centre, the APEC Energy Demand and Supply Outlook tracks how energy systems are evolving across the APEC region. The ninth edition is split into two volumes: Volume 1 sets out the big-picture trends and insights for APEC as a whole, while Volume 2 drills down into detailed outlooks for each of the bloc’s 21 member economies.
The analysis is built around two scenarios that test how different policy pathways shape outcomes across APEC’s diverse energy systems. Running through both are four tightly linked pressures that will define the future of energy in the region: the path of CO₂ emissions, reliance on energy imports, the reliability of power grids, and the rising cost of keeping the lights on.
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