Action needed to align growth of AI in Aotearoa with net-zero and nature-positive aspirations
Deloitte Global’s Powering artificial intelligence report explores the environmental footprint of Artificial Intelligence (AI) now and into the future. We have expanded the analysis and looked at what the implications are for us here in Aotearoa. We have identified three areas to consider:
- Accelerate renewable energy development to accommodate data centre energy consumption, electrification and net-zero goals
- Broaden environmental impact considerations and build data centres that meet growing demand for nature-positive approaches
- Undertake a collaborative approach with industry, government and tangata whenua toward sustainable AI.
1. Accelerate renewable energy development to accommodate data centre energy consumption, electrification and net-zero goals
Aotearoa is at a critical juncture as we prepare to accommodate the energy consumption of new datacentres from tech giants like Amazon, Microsoft, and Google, while also electrifying the nation and pursuing our net-zero goals. With Amazon and Microsoft planning datacentres and Google leveraging existing ones to create a 'Cloud Region,' the demand for electricity is set to soar, especially given the energy-intensive nature of AI applications. These tech giants have firm emissions targets and as a result they are shoring up renewable energy supply for their datacentres. For example Microsoft has entered an agreement with Ecotricity to secure 100% renewable energy for its datacentres from day 1. Projections indicate that by 2030, in a high-growth scenario, datacentres could consume as much as 7% of New Zealand’s total electricity consumption. Globally, datacentres are on track to consume 4% of the world's electricity by 2026.
Meanwhile we continue to scale up our renewable energy. New Zealand's renewable energy supply peaked at 88% in 2023, and there is a robust development pipeline with 22 of the 149 projects approved under the Fast-Track bill being renewable energy projects. Critically, the pace of renewable energy growth must match the rising demand from datacentres, AI, and nationwide electrification efforts. With substantial reconsenting of renewable energy generation assets over the next 10 years and complex compliance landscape for new renewable energy assets, the pathway to achieve this goal is far from secure. Accelerating renewable energy development is crucial to ensure that this additional demand isn't met by an increase in fossil-fuel energy, thereby supporting New Zealand's path to a sustainable and net-zero future.
2. Broaden environmental impact considerations and build data centres that meet growing demand for nature-positive approaches
Climate reporting requirements and global commitments have meant that emissions management is a well established aspect of sustainability. There is an increasing need to consider environmental impacts more broadly and look at nature aspects like biodiversity and water usage. Customers expectations are growing, and the release of the Taskforce for Nature-related Disclosures in 2023 demonstrate this growing focus.
Beyond energy consumption of AI and their supporting datacentres, the water consumption is substantial and the infrastructure will impact local communities and ecosystems. Predictions indicate that by 2027, AI globally could draw as much water as half of the United Kingdom annually. This level of growth would add considerable pressure to the country's water infrastructure. With water being a critical issue in Aotearoa and diverse views on the role of tangata whenua in water governance, this resource needs to be managed carefully. This offers a unique opportunity for tech companies to embed nature-positivity into their datacentre designs from the outset. Opportunities to consider include:
- Undertaking a LEAP assessment for each datacentre site to understand nature dependencies and impact, and the risks and opportunities they present
- Establishing partnerships with mana whenua
- Developing water replenishment commitments beyond consent requirements, in partnership with local communities
- Biodiversity conservation specific to the datacentre site and in partnership with local communities
By proactively addressing these emerging requirements, tech companies can use New Zealand as a test market to pilot innovative approaches that ensure operations support and enhance the natural environment, securing long-term sustainability and commercial viability.
3. Undertake a collaborative approach with industry, government and tangata whenua toward sustainable AI
Thus far, “Green AI” has been primarily driven by industry leaders rather than policymakers, with many proactive efforts and self-imposed criteria on data centre energy supply
Powering AI identifies the collaborative development of a sustainable AI roadmap as a priority opportunity to progress in this space. In Aotearoa we have a unique advantage to bring most stakeholders together and coordinate collaborative action, so let’s make the most of that. The government needs to take proactive action to develop policy settings in collaboration with industry and tangata whenua to ensure consistent standards and kaitiakitanga of our environment.
AI, and Gen AI in particular, can be harnessed to address sustainability challenges in Aotearoa, such as flexible load shifting, smart households and waste heat recovery. In order to realise these benefits, we first need to address the environmental risks posed by the energy and water hungry nature of the technology. Renewable energy, nature-positive approaches and government policy are key levers that will enable this outcome.
You can find Deloitte Global’s Powering artificial intelligence report here. Please reach out to Louise Aitken and Frances Arns to discuss this report further and how it is relevant to your emission and AI journey.
