Projected Rise in Energy Demand

Russian AI data centers and crypto mining farms are projected to significantly increase their electricity consumption in the coming years. A new estimate suggests that Moscow will need to invest trillions of rubles to avoid power shortages as these sectors expand. This calculation considers the anticipated growth of these two industries, which are heavily reliant on energy-intensive computing hardware. Both sectors are becoming increasingly vital for Russia as it strives to maintain pace in AI development and leverage cryptocurrency mining as an alternative revenue stream amidst sanctions.

Doubling Power Usage by 2030

According to Vitaly Sergeychuk, a member of the Management Board of VTB Bank, the electricity consumption of facilities involved in digital currency minting and artificial intelligence (AI) applications is expected to reach 2% of Russia’s total electricity usage by 2030. Sergeychuk, speaking at the “Russia Calling!” investment forum in Moscow, noted this represents a 2.5-fold increase, even as the overall growth in the country's power usage has slowed to just 1% this year. He emphasized that Russia will need to develop new generation capacities to prevent energy shortages and ensure a stable supply. The estimated capital expenditures for these upgrades are substantial, with the banker highlighting a figure of 6 trillion rubles (over $77 billion) during his participation in the international event. Sergeychuk elaborated that the primary electricity consumers in Russia's future will include data centers supporting AI, industrial production facilities, housing construction, and other sectors.

Current and Forecasted Data Center Energy Consumption

Official data, as quoted by Sergey Sasim, director of the Center for Electric Power Research at the Higher School of Economics, indicates that data centers in Russia currently consume at least 1 gigawatt (GW) of electricity. This figure is anticipated to rise to 2.5 GW by 2030, accounting for 1.3% of the total electricity consumption. Other estimates already place their current consumption between 1.5 and 2 GW of installed capacities, with some forecasts suggesting an increase to 3 to 4 GW over the same period. Sasim remarked that AI currently utilizes only about 4 to 8% of the full computing power. While its share might eventually increase to 10 to 15%, he believes this will not be the primary driver of increased consumption; rather, the general development of the IT sector will be the main factor. The expert also suggested that the 6 trillion rubles figure proposed by the VTB executive may be overstated, as this amount would represent over 17.5% of all Russian investments in new power generation. Yuri Shvydchenko, director of technology practice at TeDo, concurred with Sasim, adding that the current data center market size, which is less than 200 billion rubles (slightly over $2.5 billion), is insufficient to cover the costs of the required power generation capacity. Konstantin Stepanov, director of data center development at RTK-DC, cited statistics from the International Energy Agency, which indicate that data centers consume approximately 1 to 1.5% of globally produced electricity, projecting their share to reach 4% by the end of the decade.

Concentration of Computing Power and Regulatory Landscape

Ilya Mikhailov, director of data centers at Selectel, pointed out that few companies in Russia currently possess the capability to create specialized clusters for AI computing and ensure their operation under demanding loads. Another significant challenge is the high concentration of these facilities in and around Moscow and St. Petersburg, Russia’s second-largest city. Approximately 80% of the 200 operational data centers in Russia are located in the capital and its surrounding region. In some instances, obtaining permission to connect to the power grid can take years. Cryptocurrency mining companies frequently utilize these data centers to mine digital coins. Russia legalized this business last year, aiming to capitalize on its competitive advantages in energy resources and cool climates. However, power shortages have resulted in restrictions on mining activities in about a dozen regions. The Russian government has signaled a preference for prioritizing AI development over crypto mining, despite the growing importance of the latter as a source of income for its sanctioned economy. There have even been discussions and moves towards banning the use of data centers for mining purposes.