Forrester warns AI growth will strain energy & water

Forrester forecasts that AI growth will drive a new wave of pressure on energy, water, land and infrastructure resources by 2027, forcing changes in how data centre expansion is funded and regulated.

Its latest environmental sustainability outlook argues that the next phase of AI adoption will be shaped less by advances in models than by the physical systems needed to support them. Those include electricity networks, water supplies, suitable data centre sites and the local communities affected by large-scale developments.

Rising demand from AI workloads will intensify competition for scarce resources among governments, utilities, data centre operators and large companies. Organisations are likely to face growing pressure not only on access to computing capacity, but also on energy bills, grid constraints and broader community effects.

Energy costs

Among its main predictions, the firm expects two countries to introduce energy tariffs on data centre operators or builders. The move would reflect the growing burden on electricity systems as utilities respond to rising demand from new and expanded data centre sites.

Under that scenario, operators would have to bear more of the cost of grid upgrades, reserved power capacity and wider infrastructure expansion. That would make the economics of cloud and AI deployment more dependent on geography, energy contracts and the maturity of local grids.

The forecast points to a shift in the political and commercial debate around AI infrastructure. Rather than focusing only on access to chips and data centre space, companies may need to account more directly for the cost of power delivery and the public investment needed to support it.

Planning pressure

Forrester also expects community-impact reviews to become a de facto condition for approval of new data centres. Public opposition to major projects has grown in several markets as concerns rise over electricity use, water consumption, land conversion, noise, pollution and higher utility costs.

Large facilities will increasingly need to show their economic, environmental and social impact before winning approval. That points to a tougher planning environment for developers seeking to expand capacity quickly in response to AI demand.

The prediction reflects a broader tension emerging in digital infrastructure policy. Data centres have become central to economic strategy, but their local footprint is drawing more scrutiny from residents, regulators and elected officials.

Battery reuse

Beyond data centres, resource pressure will push companies to explore alternative energy arrangements and circular economy models. Forrester predicts that a Fortune 100 company will generate 100 MWh of power using repurposed electric vehicle batteries.

Such a project would use retired EV batteries at scale to support operations, contribute power to the grid or provide a buffer against supply disruption. Forrester links this to growing concern over energy resilience and the need to make better use of existing materials and assets.

The forecast suggests battery reuse could move further into mainstream corporate energy planning if grid pressure and supply chain risks continue to rise. It would also offer a practical example of how businesses are adapting infrastructure planning to environmental and operational constraints.

Regulatory track

Elsewhere, Forrester expects digital product passports in Europe to proceed despite wider regulatory pushback in other areas. Many manufacturers have hoped the requirements would be weakened or delayed, but the firm expects implementation to continue largely on schedule.

That would require companies to connect data on products, suppliers, materials and lifecycle information across their operations. The burden would fall particularly on manufacturers with complex supply chains and fragmented data systems.

Forrester also predicts that at least one major US city will adopt congestion pricing after New York City. The policy would be used to reduce emissions, improve air quality and raise funds for climate-related programmes, showing how transport policy is being used alongside environmental and economic goals.

The common thread in the forecasts is that environmental sustainability is moving from corporate messaging into operational decision-making, especially where infrastructure limits are becoming harder to ignore. In Forrester's view, AI is likely to sharpen that shift because of the scale of resources needed to sustain growth.

"In 2027, unlimited AI ambition will face a reckoning with limited resources," said Abhijit Sunil, senior analyst at Forrester.

"Winners will not debate or care whether to label the response 'sustainability.' They will be forced to plan AI, energy, water, land, infrastructure and community impact together, because that is now what resilient growth requires," Sunil added. .