The Physical Cost: Energy, Water and Materials

All courses / AI Threat / Module 3 / Chapter 17

Learning objectives

After the lesson the participant can:

• Explain why a small global share of electricity can still be a decisive local load.
• Compare the footprint of training with that of inference and name the choices that change inference by orders of magnitude.
• Identify what the Energy Efficiency Directive and Annex XI of the AI Act require to be reported and the gap they leave for deployers.
• Draft a routing policy that defaults to the smallest adequate model and reports energy, carbon and water per functional unit.

Key concepts

Smallest adequate model

The series' principle of choosing the smallest model that meets the acceptance criteria. Adequacy is established by running the evaluation suite against at least two model sizes for each request class.

Functional unit

The unit the service is managed by, such as a resolved enquiry or a completed agent task. For agents that make many model calls, energy per completed task is the relevant unit.

Rebound effect

Lower energy per request lowers cost, and lower cost invites more requests. A budget for the service as a whole, not only an efficiency target per request, makes rebound visible.

Annex VII figures

Under Article 12 of the recast Energy Efficiency Directive, data centres with at least 500 kilowatts of installed IT power publish yearly figures including energy consumption, power utilisation, waste-heat utilisation, water use and renewable energy.

The reporting gap

The Directive reports buildings, not workloads, and the AI Act's documentation concerns the model. Neither requires anyone to state the energy, carbon or water of an inference request, so deployers still estimate, stating method and limitations.

Interactive exercises

Do them here and get feedback at once. Choose a card and then where it belongs, or drag it.

Teaching plan

Discussion

1. Both sides of the debate rely on the same IEA report. What does each emphasise, and what additional disclosure would let a local council decide between them for a proposed data centre?
2. The guide says that where a service affects people's rights, quality comes first and the footprint is optimised within it. Where is that boundary for the services you run?
3. The chapter argues that physical constraints arrive slowly and visibly, as prices and delays. How would your organisation notice such a constraint early, and what would it do first?

Written exercise

Self-test

Choose an answer to see whether it is right, or open the answer below each question.

1. What did the International Energy Agency estimate for data centres in its April 2025 report?

   1. About 1.5 per cent of global electricity in 2024, more than doubling by 2030 in its base case
   2. About 15 per cent of global electricity in 2024, falling by 2030
   3. About 945 terawatt-hours in 2024, stable to 2030
   4. A larger share of the growth in electricity demand to 2030 than industry, electric vehicles or air conditioning
   Show the answer

   A. About 1.5 per cent of global electricity in 2024, more than doubling by 2030 in its base case
   The IEA estimated around 415 terawatt-hours in 2024 and a little under 3 per cent of global consumption by 2030, with wide uncertainty and AI as the main driver.

2. What did Luccioni, Jernite and Strubell find when they measured inference across models and tasks?

   1. All tasks used about the same energy per request
   2. Task-specific models used more energy than general ones
   3. Differences of several orders of magnitude, with image generation the most energy-intensive
   4. Training always dominates the lifetime footprint of a model, however many requests it later serves
   Show the answer

   C. Differences of several orders of magnitude, with image generation the most energy-intensive
   Classifying text used very little energy, generating text much more and generating images the most, which is why the inference footprint is the sum of deployer decisions.

3. How does the verdict grade the full physical form of T8, a society whose AI stops for physical reasons and that can no longer function without it?

   1. Pattern at scale, because electricity use is rising
   2. It remains fiction, and a forecast that it will happen is speculation
   3. Incident in the wild, because grid connections were restricted
   4. Expected, because fabrication is concentrated
   Show the answer

   B. It remains fiction, and a forecast that it will happen is speculation
   Rising use is a pattern at scale and local strain an incident in the wild in some regions, but physical constraints arrive slowly and visibly, which gives institutions time to respond.