AI Data Center Boom Creates Historic Uncertainty for Nordic and European Power Markets, Finds StormGeo

StormGeo’s latest energy market analysis shows that artificial intelligence is emerging as one of the most powerful new forces shaping Europe’s power system.

Oslo, Norway, 20.11.2025 – The rise of AI is triggering a new wave of data center investment, and with it, unprecedented uncertainty for the Nordic and European power system, according to the new Nordic and European Power Market Outlooks from StormGeo.

The reports identify AI-driven data center growth as the central uncertainty shaping the Nordic and European long-term power markets. In the most extreme scenarios, hyperscale data centers can consume as much electricity as entire cities, significantly influencing demand growth and price formation.

At the same time, the efficiency of AI computing is improving rapidly, with advancements in hardware and local models potentially driving down the energy cost per unit of computation. The balance between these opposing trends – exploding demand and rapid efficiency gains – will determine whether overall demand increases moderately or will surge to unprecedented levels, the report notes.

“The situation mirrors the so-called Jevon’s paradox,” says Sigbjørn Seland, Chief Analyst at StormGeo. “Overall demand could either surge to unprecedented levels if efficiency gains fuel explosive adoption or remains contained if powerful models run efficiently on local devices.”

The report finds that this uncertainty is particularly relevant for the Nordics, where large-scale projects are being planned in areas already characterized by significant renewable surpluses. StormGeo concludes that growth in AI workloads will outpace efficiency gains and cause an increase in electricity consumption growth in the Nordics from roughly 8 TWh in 2025 to 40 TWh in 2050.

For Europe as a whole, large-scale data center buildout could shift both demand growth trajectories and regional price structures, but the timing and magnitude remain highly unpredictable.

StormGeo’s Power Market Outlooks deliver insights into the long-term evolution of energy markets across the Nordics and Northern Europe. The analyses are used by utilities, investors, and traders to reveal the fundamentals, risks, and opportunities shaping the energy transition through 2050.

Media Contacts

Sigbjørn Seland
Chief Analyst, StormGeo
sigbjorn.seland@stormgeo.com

Rune Reiakvam
Head of Brand and Communications, StormGeo
rune.reiakvam@stormgeo.com