The rapid growth of AI-focused data centres is reshaping the metals investment landscape, as the focus shifts to power generation, energy storage, and grid connections.
A report by Wood Mackenzie highlights how growing demand is reshaping the power investment landscape, changing both the risks and opportunities as uncertainty around regulation, electricity pricing, and project viability persists.
The authors note that while AI currently accounts for just a small proportion of global power demand, it’s already changing the economic landscape of the industry.
Wood Mackenzie expects “a supercycle of infrastructure investment across the power sector, including renewables, gas-fired generation, energy storage, transmission, and new technologies”.
But it also notes that the potential impacts are still too broad to narrow down.
In the US, large-load capacity, including data centres, with signed construction or electricity supply agreements has reached 195 gigawatts (GW), while another 107GW is under advanced discussion. These figures do not include projects at earlier stages of development.
“This matters for banks, investment funds, and private equity because electricity availability is increasingly becoming a constraint on data centre investment,” the report notes.
“The intersection between data centre operators who place an exceptionally high value on reliable electricity and power systems that are struggling to provide additional capacity at pace is creating scope for new investment and commercial models”.
Electricity generation expands
The report concludes that a broad expansion in power generation is expected. In the US, gas is forecast to provide 52% of incremental energy production through 2035, with renewables making up another 45%.
When broken down by technology, the outlook varies. Utility-scale solar additions in the US are expected to plateau at around 26GW per year, affected by tax credit changes, supply chain disruptions, and interconnection queues.
Energy storage is expected to remain consistent, with annual additions reaching more than 22GW by 2035.
Advanced nuclear is expected to provide another stable source of electricity for data centres, “yet investors need to balance that potential against construction risk, possible cost overruns, and shortages of skilled labour”, Wood Mackenzie says.
“The wider lesson is that rapidly growing electricity demand does not automatically make every generation technology — or every project — equally attractive.”
As previously reported, nuclear power is emerging as a key option for the growing data-driven economy, with tech majors such as Google (NASDAQ:GOOGL) and Amazon (NASDAQ:AMZN) investing in long-term nuclear projects.
Grid investment is also critical, with data centre developers being encouraged to invest in technologies to make better use of existing infrastructure.
Impact on APAC
Wood Mackenzie expects data centre electricity consumption in the Asia-Pacific (APAC) region to more than triple from 260 terawatt hours (TWh) in 2025 to 980TWh in 2030. This accounts for about 6% of total APAC power demand in 2030.
China is driving the majority of this growth, with data centre consumption forecast to rise from 196TWh in 2025 to 779TWh in 2030.
The report highlights risks. In Indonesia’s Riau Islands, the data centre capacity pipeline is set to exceed the region’s existing power generation capacity by 2027.
Australia’s critical minerals supply is key
In Australia, data centre development represents only part of the rising investment in power generation.
“Australia combines a large electricity market, a rapidly rising renewable energy penetration rate, ageing conventional generation projects, and growing battery storage capacity, alongside rising data centre investment.”
Wood Mackenzie notes that this power generation mix creates opportunities, including within the battery materials and battery energy storage systems space.
Minerals Council of Australia CEO Tania Constable highlights how AI growth is expected to increase demand for minerals and energy from Australia.
Constable notes that the Minerals Council of Australia estimates that AI’s impact on Australian gross domestic product could be at least $45 billion by 2030.
“As demand for AI grows, so too will demand for the minerals and energy required to build and power it,” Constable says.
She says the expected impact on key critical minerals, with Australia already a leading producer of several. These include iron ore and metallurgical coal for construction and energy; copper for data centres, grids, generation, storage, and communications; and uranium as a potential input for reliable electricity systems.
The Minerals Council of Australia sees significant benefits to both major miners and smaller producers in Australia.
As AI-driven infrastructure investment gathers pace, demand for the metals and minerals underpinning power generation, transmission, energy storage, and digital networks is expected to create new opportunities across the global resources sector.
Write to Amy Rotman at Mining.com.au
Main image: Unsplash
