I’ve been thinking about this paradox since my PhD days. Back then I was trying to make ships more fuel efficient, believing it would reduce emissions. Then I discovered William Stanley Jevons and his 1865 book “The Coal Question.” It nearly broke me.
Jevons noticed something counterintuitive about James Watt’s steam engine. Watt made steam engines roughly four times more efficient than the old Newcomen engines. Common sense says this should have reduced coal consumption. The opposite happened. Coal use exploded.
Why? Because efficient steam power suddenly became cheap enough to use everywhere. Factories, railways, mines. The efficiency didn’t save resources. It unlocked demand that hadn’t existed before.
“It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth.”
That quote has stuck with me for years.
Now look at AI. In 2024, data centers consumed about 415 terawatt hours globally, roughly 1.5% of all electricity. Projections put that at 945 terawatt hours by 2030. Virginia already sends 26% of its electricity to data centers. Ireland is at 21-22%.
DeepSeek showed you can train competitive models far more cheaply. Did that reduce compute demand? No. It opened the door for more companies to train more models. Same pattern as Watt’s engine.
Here’s where I land on this: the paradox isn’t a warning. It’s a description of how economic systems work. Fighting it is pointless. The question is whether we can meet rising demand with clean, abundant energy.
Solar is already the cheapest electricity source available. The sun has always been Earth’s power plant. Even the coal Jevons worried about is just ancient stored sunlight.
We’re going to use more electricity. A lot more. That’s not a crisis. That’s an opportunity to finally build the energy system we should have had all along.
More on this in future episodes.——SHOW NOTES:
Episode recorded Sunday morning, Kalmar, Sweden
The History
* William Stanley Jevons, Liverpool-born economist, published “The Coal Question” in 1865
* UK consumed 93 million tons of coal annually at the time, nearly all of Britain’s energy supply
* Coal production had grown 3.5% per year for the previous 80 years
* British coal production didn’t peak until 1913, almost 50 years after Jevons wrote his warning
The Famous Quote “It is wholly a confusion of ideas to suppose that the economical use of fuel is equivalent to a diminished consumption. The very contrary is the truth.”
The Steam Engine Story
* Thomas Newcomen developed the atmospheric engine in 1712, less than 1% efficient
* James Watt (born 1736) was given a Newcomen engine to repair in 1763
* Conceived the separate condenser idea in 1765, patented in 1769
* Watt’s engine was roughly 4x more efficient than Newcomen’s
* Result: coal consumption exploded because steam power became economical for everything
The Paradox More efficiency didn’t reduce coal use. It made steam power cheap enough to deploy everywhere. Textile mills, railways, factories. The efficiency unlocked demand that didn’t exist before.
Modern Examples
* More fuel-efficient cars → people drive more
* LED lights → we install far more lights
* Air conditioning → billions of new users as it became affordable
AI and Data Centers Today
* 2024: Global data centers consumed 415 TWh (1.5% of global electricity)
* 2030 projection: 945 TWh (nearly 3% of global electricity)
* Data center electricity growing 15% per year (4x faster than overall electricity growth)
* US: 4% of total electricity goes to data centers
* Virginia alone: 26% of state electricity to data centers in 2023
* Ireland: 21-22% of national electricity to data centers
The DeepSeek Parallel Early ChatGPT models might be the Newcomen engine of AI. Useful for specific tasks but extremely inefficient. DeepSeek and other breakthroughs are making AI cheaper and more efficient. According to Jevons Paradox, this won’t reduce compute demand. It will increase it.
The Optimistic Take Rising electricity demand isn’t a problem if we meet it with abundant, cheap, clean sources. Solar is now the cheapest electricity source on earth. The sun has always been Earth’s power plant. Even fossil fuels are just stored sunlight.
