The Zhitong Finance App learned that Guolian Securities released a research report saying that the increase in electricity consumption is expected to drive the performance of operators and power equipment companies. As data centers drive the increase in electricity demand and the country's requirements for the ratio of green electricity in computing power-related industries, the value of the green power operating environment is expected to be highlighted, and China Nuclear Power (601985.SH) and Three Gorges Energy (600905.SH) are recommended. On the other hand, the data center itself has high requirements for power quality, and the increase in electricity consumption is expected to further increase the demand for power equipment, driven by related distribution grid transformation and new energy power generation. Recommended data center transformer products have been widely used in more than 100 projects; Kehua Data (002335.SZ), which has collaborated and rapidly developed data center and new energy businesses to actively promote intelligent computing centers and AIGC-related business development. 688676.SH
The main views of Guolian Securities are as follows:
IEA predicts that global data center electricity consumption is expected to increase dramatically
Since 2024, tech giants such as Musk, Hwang In-hoon, and Ultraman have all expressed the view that the development of AI computing power may significantly increase electricity consumption. According to the IEA, global demand for data centers, cryptocurrencies, AI, etc. consumed a total of 460 TWh of electricity in 2022, accounting for 2% of the total global electricity consumption; according to the IEA's neutral forecast, the relevant electricity demand is expected to rise to 800 TWh in 2026, with a 4-year CAGR of 14.8%; in the higher expectations, the relevant electricity demand is expected to rise to 1,050 TWh in 2026, with a CAGR of 22.9% in 4 years.
Although the related demand for electricity is growing rapidly, the impact on total global electricity consumption is limited
Guolian Securities predicts that the growth in electricity consumption in domestic data centers may further accelerate the number of standard racks in use in data centers in 2023Q3 to exceed 7.6 million, which is expected to grow to 14 million in 2025, and the CAGR is expected to reach 29.1% in 2022. Although there is still room for data center PUE to decline, and the power consumption required per unit computing power is expected to decrease as technology iterates, with strong demand for data center rack size, and further increase in rack density and GPU power consumption, electricity consumption in China's pan-data center sector may further accelerate growth, closer to the higher expectations in IEA forecasts; this demand is expected to reach 540 TWh in 2026, and the CAGR is 19% in 2023-2026.
Large data centers have a big impact on local power grids
Before 2020, China's computing power resources were concentrated in developed regions along the southeast coast; after 2020, they gradually migrated to the western region. According to the above estimates by the League of Nations Securities, the increase in electricity consumption in data centers in China is expected to reach 57/72/91 TWh from 2024 to 2026, while the electricity consumption of the entire society in Guizhou, Gansu, Ningxia, Qinghai and other places in 2022 was 174/150/125/92 TWh respectively. The increase in data center electricity consumption may have an obvious impact on electricity consumption in the western region. Virginia and Georgia are regions with many data center construction in the US, and expectations for future electricity demand have risen markedly due to the rapid construction of data centers.
The use of electricity in data centers is expected to greatly drive new energy installations, and leading technology companies such as Amazon, Google, and Microsoft have achieved a high share of renewable energy generation. In 2020, China's data center renewable energy utilization rate was around 30%. As the country's control on data center energy consumption became stricter, building zero-carbon or low-carbon data centers with 100% renewable energy became an important development direction for mainstream service providers. According to the IEA's high forecast for global data center electricity consumption to grow by about 590 TWh from 2022 to 2026, the annualized increase is 148 TWh, accounting for about 27% of the increase in global renewable energy generation in 2022, which is expected to greatly drive future new energy installations.
Risk warning: 1) differences in data statistics affect calculation results; 2) industry competition intensifies; 3) raw material prices fluctuate greatly.