Israel's Electricity Consumption to Skyrocket by 2040, Driven by AI and EVs
Translated & summarized from Maariv by baba
Israel's electricity consumption is projected to surge dramatically by 2040, driven by the increasing use of electric vehicles, AI, and server farms. A new forecast predicts electricity demand will rise significantly, with transportation's share growing from 2% to 12% and server farms consuming 18 billion kWh by 2040. Peak winter demand is also expected to nearly double. Private electricity producers are ready to expand capacity but call for clear government policy and reduced barriers to investment.
The story in 6 lines · by baba
- Israel's electricity consumption is set for a dramatic increase by 2040, driven by AI and electric vehicles.
- Server farm electricity use is projected to jump from 0.8 billion kWh in 2025 to 18 billion kWh by 2040.
- The transportation sector's electricity demand will rise from 1.5 billion kWh in 2025 to 17.1 billion kWh by 2040.
- Over half of private vehicles in Israel are expected to be electric by 2035.
- Peak winter electricity demand is forecast to rise from 15 GW in 2025 to 27.6 GW by 2040.
- Private electricity producers urge clear policy and removal of barriers to meet rising demand.
Israel's electricity consumption is projected to increase dramatically within the next two decades, according to a new forecast prepared by BDO for the Forum of Private Electricity Producers. This surge is attributed to several factors, including the growing adoption of electric vehicles, increased water desalination, higher energy use in homes, and significantly, the expansion of server farms and artificial intelligence applications.
Server farm electricity consumption alone is expected to jump from approximately 0.8 billion kWh in 2025 to 7 billion kWh by 2030 and 18 billion kWh by 2040. AI applications are a major driver of this trend, with their share of server farm demand predicted to rise from about 54% in 2025 to 71% by 2030. The transportation sector will also see a substantial shift, with electricity consumption rising from 1.5 billion kWh in 2025 to 17.1 billion kWh by 2040, increasing its share of total electricity use from 2% to 12%.
By 2035, more than half of private vehicles in Israel, including plug-in hybrids, are expected to be electric, according to the forum. Electrification is also anticipated in public transportation and trucking, with projections indicating that 70% of buses and 20% of trucks will be electric by 2040. The water sector's electricity demand is also set to grow, from 4.8 billion kWh in 2025 to 7.8 billion kWh by 2040, mainly due to expanded desalination efforts.
Core electricity demand from households, commerce, industry, and agriculture is also expected to increase due to population growth and rising living standards. Peak demand in winter is forecast to rise from about 15 GW in 2025 to 27.6 GW by 2040. The forum anticipates a demand deficit compared to national planning by 2030, which is expected to widen in subsequent years.
The Forum of Private Electricity Producers stated that the Israeli electricity sector is at a turning point, with electricity replacing other energy sources and new demands emerging from AI and server farms. They emphasized the need for Israel to prepare for this change to ensure reliable power for technology companies. The forum, which currently produces about 60% of the country's electricity, highlighted that private producers have the capacity to expand production but require clear policy, long-term certainty, and the removal of barriers to investment.
