Russian AI data centers and crypto mining farms are going to significantly increase their electricity consumption in the next few years, and Moscow will have to cough up trillions of rubles to avoid power shortages, according to a new estimate.
The calculation accounts for the projected expansion of the two sectors that rely heavily on energy-hungry computing hardware. Both are becoming increasingly important for Russia, as it’s trying to keep up in AI development while exploiting mining as an alternative income source under sanctions.
AI data centers and crypto farms expected to double their power usage
Electricity consumption of facilities engaged in the minting of digital currencies and artificial intelligence (AI) applications will reach 2% of Russia’s total by 2030, according to Vitaly Sergeychuk, member of the Management Board of VTB Bank.
That represents a 2.5-fold increase, despite a decline in the overall growth of power usage in the country to just 1% this year, noted the executive of the majority state-owned banking institution, the second-largest in the Russian Federation.
Sergeychuk was speaking at the ongoing “Russia Calling!” investment forum in Moscow. Quoted by the business daily Kommersant, he pointed out that Russia will have to build new generation capacities to prevent energy shortages and ensure a stable supply.
The necessary capital expenditures for that purpose have been estimated at 6 trillion rubles (over $77 billion), the banker highlighted during his participation in the international event.
Russia’s main electricity consumers in the future will be data centers powering AI, industrial production facilities, housing construction, and other sectors, he elaborated.
Russian data centers now burn at least 1 gigawatt of electricity
According to official data quoted by Sergey Sasim, director of the Center for Electric Power Research at the Higher School of Economics, the energy consumption of data centers in Russia currently amounts to 1 gigawatt (GW) and is expected to reach 2.5 GW by 2030, or 1.3% of the total.
Other estimates already put their consumption at 1.5 – 2 GW of the installed capacities, and some forecasts indicate it will increase to 3 – 4 GW over the same period.
Sasim remarked that at the moment, AI occupies only around 4 to 8% of the full computing power. Although its share may eventually jump to 10 – 15%, he is convinced that’s not going to be the main driver of higher consumption, but rather the general development of the IT sector.
The expert also suggested that the 6 trillion rubles figure pitched by the VTB executive is overstated, as this would amount to over 17.5% of all Russian investments in the new generation.
Yuri Shvydchenko, director of technology practice at TeDo, agreed with Sasim, adding that the current size of the data-center market of less than 200 billion rubles (a little over $2.5 billion) is insufficient to cover the costs of the necessary power generation capacity.
Konstantin Stepanov, director of data center development at RTK-DC, quoted stats from the International Energy Agency, according to which data centers consume approximately 1 – 1.5% of the globally produced electricity, projecting their share to reach 4% by the end of the decade.
Russia’s computing power concentrated in Moscow
Few companies in Russia are currently capable of creating specialized clusters for AI computing and ensuring their operation under high loads, noted Ilya Mikhailov, director of data centers at Selectel.
Another issue is their high concentration in and around Moscow and St. Petersburg, Russia’s second-largest city. About 80% of the 200 data centers running in Russia now are located in the capital and the adjacent region. Obtaining permission to connect to the grid may take years in some cases.
Crypto mining companies often use their services to mint digital coins. Russia legalized their business last year to exploit its competitive advantages in terms of energy resources and cool climates. However, power shortages have led to restrictions on activity in about a dozen regions.
The Russian government has already indicated it leans toward prioritizing AI development over crypto mining, despite the growing role of the latter as a source of income for its sanctioned economy, and even banning the use of data centers for mining purposes.
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Source: https://www.cryptopolitan.com/russia-to-spend-77-billion-power-ai-centers/