We are living in the Age of Electricity. While electrification across industry, transport, and buildings continues to push demand higher, one of the fastest-growing drivers is digital infrastructure – data centres and AI.

In recent years, electricity demand has surged as data-centre activity has expanded, and this trend is expected to continue over the next three to five years.

AI meets the grid: Shaping the data centre power play, a report from the Capgemini Research Institute, examines how rapid growth in data-centre operations, especially AI-driven workloads, is reshaping electricity demand and challenging energy organisations. It explores the constraints power companies face, the growing role of on-site power, and how renewables, natural gas, and small modular reactors (SMRs) are expected to contribute to future solutions. The report also highlights how AI, generative AI (Gen AI), and AI agents can create value across grid operations and system performance.

Key insights are drawn from a survey of energy and data-centre executives across 21 countries and complemented by qualitative insights from industry leaders.

How is AI turning every data centre into a volatile industrial load?

The rapid rise of data centres running AI workloads is straining power systems worldwide, leading 80% of utilities to expect more extreme and less predictable demand spikes, directly impacting grid resilience. A large majority of industry leaders – 70% of electricity executives and 83% of data-centre executives – expect high-density AI-led data centre sites to significantly increase regional power demand within the next three to five years.

How can AI help utilities respond to rising demand and complexity?

For energy providers, AI is also emerging as a force multiplier for grid planning and reliability, with more than 60% expecting it to unlock significant efficiency and operational gains. However, only 45% of utilities today are using AI for grid optimisation, revealing significant opportunity to scale digital and AI-driven operations to keep pace with booming demand.

What is limiting the speed of grid expansion and time to value?

Ageing infrastructure (cited by 74% of electricity executives globally), permitting delays (84%), interconnection timelines (76%), insufficient reserve margins (84%), and supply-chain pressures (74%) are slowing capacity expansion and constraining reliable power delivery.

How is on-site power reshaping the utility–data centre relationship?

Data-centre operators are increasingly generating power on-site or near-site, which can help to serve demand that the central grid cannot immediately accommodate. 29% of data-centre executives globally say they already deploy on-site generation, 39% plan to add it within one to two years, and more than seven in ten expect it to significantly reduce their reliance on the grid in the next five years.

Why is a diversified energy mix essential?

Both electricity and data-centre leaders agree that no single energy source can reliably power the next wave of high-density computing. Diversification is widely seen as critical, with 78% of electricity executives saying renewables alone cannot yet meet 24/7 demand, and 68% of electricity and data-centre executives viewing natural gas as key to faster timelines, despite decarbonisation tensions.

This report is intended for CXOs and senior leaders across the energy ecosystem, as well as regulators, policymakers, hyperscalers, data-centre operators, OEMs, and supply-chain partners. It outlines five priorities for energy organisations responding to accelerating data-centre demand:

  • Move from reactive requests to proactive, portfolio-level demand foresight.
  • Secure capacity and speed through portfolio rebalancing and infrastructure transformation.
  • Simplify connections, modernise tariffs, and enable demand-side participation.
  • Enable intelligent supply chains and orchestrate ecosystems.
  • Operationalise AI and scale future-ready talent.

To explore how surging data-centre and AI demand is redefining energy systems – and what it means for grid readiness, investment priorities, and energy strategy, download the report today.