Energy Markets Seek Direction Amidst Rising Demand and Technological Advancements

The oil and gas industry is no longer the sole proxy for energy, as electricity demand is becoming increasingly important due to the growth of data centers from AI. The industry is searching for solid ground amidst market volatility, with a focus on new demand and digital energy growth.

The oil and gas industry has long been the primary proxy for energy, but the landscape is shifting. The growing demand for electricity, driven by the proliferation of data centers fueled by artificial intelligence (AI), is becoming increasingly significant. This shift is prompting the industry to seek stability amidst market volatility and focus on new demand and digital energy growth.

Schneider Electric, a global leader in energy management solutions, has partnered with Nvidia to address the escalating energy demands of data centers, particularly those driven by AI workloads. The collaboration, announced in December 2024, aims to develop AI-focused energy and cooling strategies, AI infrastructure, and consulting support to help data centers reach their sustainability goals [1]. Schneider Electric's new data-reference center design, co-developed with Nvidia, aims to cut cooling energy usage by about 20%. This innovative approach leverages Nvidia's superchips, designed for large-scale AI and high-performance processing, and Schneider Electric's expertise in liquid cooling technology.

Data centers already account for a substantial share of global electricity usage, consuming 460 terawatt hours (TWh) in 2022 [2]. This demand is expected to increase as the need for digital services and AI grows. For example, Goldman Sachs estimates data center power use will skyrocket 160% by 2030 due to AI workloads, which will put a significant strain on the grid. The European grid, in particular, will need substantial investment to prepare for this increased demand.

The partnership between Schneider Electric and Nvidia is part of a broader trend in the data center industry where AI is being used to make data centers and AI workloads more energy-efficient. Amrize, another company involved in this space, has partnered with Meta to develop an AI-optimized concrete mix for data centers, reducing the total carbon footprint of the concrete by 35% [3].

To meet the growing electricity demand, data centers are investing in renewables and alternative energy sources. Google and Amazon, for instance, have ambitious plans to achieve 100% renewable energy for their operations and data centers. Dubai's Moro Hub, one of the largest solar-powered data centers, offsets more than 13,800 tons of CO2 emissions annually with solar panels [7].

Innovations in energy efficiency and cooling technologies are also crucial. Liquid cooling, for example, holds much promise, with the potential to reduce facility power consumption by 18.1% and total data center power by 10.2% [10].

As AI continues to drive demand for data centers, these innovations will be crucial in managing the associated energy demands. The oil and gas industry, traditionally the dominant energy sector, must now adapt to this new reality, focusing on digital energy growth and sustainability.

References:
[1] https://www.ainvest.com/news/schneider-electric-nvidia-partner-tackle-ai-driven-energy-challenges-data-centers-2507/
[2] https://www.wevolver.com/article/repowering-data-centers-for-ai-managing-energy-demand-and-sustainability
[3] https://www.morningstar.com/news/business-wire/20250716678609/amrize-and-meta-partner-on-first-of-its-kind-ai-optimized-advanced-concrete-mix-for-data-center-in-minnesota
[7] https://www.dubaichamber.com/news/dubai-s-moro-hub-data-center-clears-the-skies
[10] https://www.businessinsider.com/schneider-electric-nvidia-ai-data-centers-designs-energy-demands-2025-7