NZ Herald
  • Home
  • Latest news
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather forecasts

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
    • The Great NZ Road Trip
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
    • Cooking the Books
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • What the Actual
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business / Companies / Energy

Market Watch: Global demand for electricity soars with rise of AI and EVs - who will pay?

Liam Dann
By Liam Dann
Business Editor at Large·NZ Herald·
28 May, 2024 01:00 AM5 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

Business editor-at-large Liam Dann talks to Pie Funds CIO and founder Mike Taylor about the power issues. Video / Getty Images

Electric power consumption is expected to soar in the next few years. What will increased demand mean for share market investors?

“I’m not sure that the average person is aware how much more electricity we’re going to need and consume over the next five to 10 years as we transition away from traditional fossil fuels,” says Pie Funds chief investment officer Mike Taylor.

“Not to mention the impact that AI will have on the electricity demand.”

It was probably more understood that if the entire car fleet went electric, we’d need a lot of power. But while the world has raced to adopt AI in the past two years, the amount of electricity that must be generated to power it was not so well-understood, he said.

“A really simple way to think about it is if you look at an average Google search and the energy consumption for that versus an AI Chat GPT search, the AI search requires 10 times as much power or energy as a regular Google search,” Taylor said.

Advertisement
Advertise with NZME.

There had been an explosion of growth for data centres, he said.

“Where all this work goes on in the background is on servers and data centers.”

If we look at the US as an example, data centres currently consume about 3 per cent of their overall power - by 2030 this was estimated to be 7 per cent of power, Taylor said.

Advertisement
Advertise with NZME.

“They’ve got to come up with that extra power, on top of the fact that the whole economy is electrifying as well. So estimates in the US say that over the next 10 years, they will need an extra 40 per cent more power.”

Taylor said that was putting discussion about more nuclear power back on the table in the Northern Hemisphere.

Discover more

Business

Auckland’s giant new data centres are rising - the staggering power they’ll chug

27 Jan 12:30 AM
Telecommunications

Spark reveals aggressive data centre plans - involving a Dairy Flat surf park

28 Feb 04:10 AM
Freight and logistics

RUCs for EVs: Many yet to sign up, with deadline just days away

26 May 11:02 PM

There had been talk that Meta boss Mark Zuckerberg was looking to build an entire power plant just to run a data centre, he said.

In the past few weeks, New Zealand’s power grid has struggled to keep up with demand as winter hit early.

Meanwhile, we were also talking up this economy as a great space for data centres, encouraging the likes of Microsoft here.

That combined with a growing electric car fleet could create issues locally unless we start investing in a big way, Taylor said.

Increasing demand for power has generated discussion about more nuclear power, at least in the Northern Hemisphere. Photo / Getty Images
Increasing demand for power has generated discussion about more nuclear power, at least in the Northern Hemisphere. Photo / Getty Images

“We have to be a little bit careful of what we wish for. Obviously to have data centres here is good for data sovereignty, but then we need the power to run them,” he said.

“I’m not sure that, in a short period of time, we could generate the additional electricity required for that, particularly if we want to move away from fossil fuels, because not all our power here that’s generated is renewable.”

Advertisement
Advertise with NZME.

New Zealand still relied on coal to some extent and, while it was good to see some solar and wind continuing to open, it was not yet at a significant scale, Taylor said.

“Just to give some context, New Zealand uses about 43,500 gigawatts of power per year. There’s a new solar farm that’s been built in the Bay of Plenty - it’s got about 60,000 solar panels and that’s only going to generate 54 gigawatts. It’s a drop in the ocean [with regard to] to the extra power we’re going to need over the next decade.”

For consumers, this could mean ever-higher prices. But what does it mean for investors?

“As an investor, you’re always looking to invest in something that’s got strong tailwinds, and from a utility perspective or power companies, it really looks like they do have tailwinds for the foreseeable future,” Taylor said.

In fact, the market had already cottoned on to this, he said.

The utility sector was the best-performing sector in the US year to date, even though interest rates were still high and normally these were dividend-paying stocks that don’t grow fast.

“They normally trade very much around where bond yields are, but now that investors can see that, they will be getting growth as well as a yield,” Taylor said.

“It’s suddenly becoming quite an attractive place to go.”

On top of the traditional heavyweight power companies, there were investment options around alternative and green energy start-ups.

But perhaps more overlooked were the money small-cap stocks that focused on improving energy efficiency, Taylor said.

“There’s lots of little companies around the world you can find to invest in which are focusing on providing energy-efficient components, whether it’s into a data centre or in a building.”

Liam Dann is business editor-at-large for the New Zealand Herald. He is a senior writer and columnist. He also presents and produces videos and podcasts and is the author of the best-selling book BBQ Economics. Liam joined the Herald in 2003.

The Market Watch video show is produced in partnership with Pie Funds.

Save

    Share this article

    Reminder, this is a Premium article and requires a subscription to read.

Latest from Energy

Energy

Vector hires advisers for strategic review of fibre business

13 May 09:35 PM
Energy

Z Energy refuses to comment on Flick Electric closure

12 May 04:55 AM
Premium
Stock takes

Stock Takes: Will reporting season see the end of a bear market?

08 May 09:00 PM

Connected workers are safer workers 

sponsored
Advertisement
Advertise with NZME.

Latest from Energy

Vector hires advisers for strategic review of fibre business

Vector hires advisers for strategic review of fibre business

13 May 09:35 PM

Auckland's Vector has appointed Barrenjoey to review its fibre business,

Z Energy refuses to comment on Flick Electric closure

Z Energy refuses to comment on Flick Electric closure

12 May 04:55 AM
Premium
Stock Takes: Will reporting season see the end of a bear market?

Stock Takes: Will reporting season see the end of a bear market?

08 May 09:00 PM
'Like a Band-Aid': Methanex deal highlights energy supply challenges

'Like a Band-Aid': Methanex deal highlights energy supply challenges

08 May 05:44 AM
The Hire A Hubby hero turning handyman stereotypes on their head
sponsored

The Hire A Hubby hero turning handyman stereotypes on their head

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • What the Actual
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven CarGuide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP