After remaining stable for nearly two decades, energy demand in the United States is surging. A recent report from Grid Strategies, an energy consultancy, estimates that annual electricity demand is expected to grow by 0.9%, while capacity added to the grid is expected to increase by only 0.5%.
What is the cause of this crisis? First, a boom in domestic industry and a growing need for AI-based computing power, which is expected to increase the amount of data centers across the country.
But there are some lesser-known factors that could push America’s grid over the edge. The boom in artificial intelligence, the continued popularity of cryptocurrency mining and the legalization of marijuana are all adding potential strain to the network at a time when extreme weather makes it more vulnerable.
Data centers, essential for cloud computing, now account for about 2.5% of national energy consumption. According to Boston Consulting Group, by the end of the decade, their energy consumption is expected to triple, driven by the growth of artificial intelligence applications and cryptocurrency mining. The International Energy Agency took a similar approach, predicting that data center energy demand will double between 2023 and 2026. In the United States, data center growth is responsible for a third of the additional demand over that period of time. PJM, an interconnection utility that covers parts of 13 states from Ohio to Virginiania, has “observed unprecedented data center load growth,” according to Grid Strategies. Virginia contains the largest concentration of data centers in the United States, with Loudoun County nicknamed “Data Center Alley”. The state utility, Dominion Energy, has delayed or rejected the centers saying it could not meet energy demand, according to an industry publication Data center dynamics.
Artificial intelligence and cryptocurrencies are both energy-intensive businesses. Training an AI model on terabytes of data and feeding it with suggestions are data-dense processes that use much more power than, say, an equivalent Google search. A study in Joule predicts that, globally, AI applications could use as much energy as the entire nation of the Netherlands by 2027.
Cryptocurrencies are power-hungry for a similar reason. Miners compete to be the first to solve complex problems who are rewarded with cryptocurrencies; since the chances of solving it first are infinitesimally small, miners have an advantage by using faster and faster computers, which results in intense energy demand.
“It’s really just a matter of luck,” Samantha Robertson, a member of the strategy team at Bitcoin firm Bitdeer, told the newspaper. Texas Grandstand. “To increase your chances, it makes sense for these computers to run on a large scale.”
Nationally, cryptocurrency mining accounts for 2.3% of American energy consumption, according to the Energy Information Administration. In Texas, a popular destination for cryptocurrency mining operations, miners have required the equivalent of the power of 41 new nuclear reactors, according to the Caretaker. According to Grid Strategies, the Texas grid “has experienced continued rapid load growth” since last summer.
Then there’s another thriving, power-hungry industry: marijuana. The rapid decriminalization and legalization of drugs, not to mention young Americans’ preference for bud over alcohol, has created enormous growth in the weed market. Half of American states now have some form of legal cannabis, whether recreational or medical, and all that weed has to be grown somewhere.
And growing the plant, it turns out, is an electricity-intensive undertaking. Cannabis plants require bright lighting like that of a hospital operating room, fans for air circulation, and frequent temperature changes. More than a decade ago, the National Conference of State Legislatures estimated that the marijuana industry consumed about 1 percent of the nation’s electricity. Today that number is certainly larger given its explosive popularity. In Massachusetts, marijuana now accounts for 10% of the state’s domestic energy consumption; in Colorado, one of the first states to legalize pot in 2014, now emits as much carbon as mining, according to a letter from two members of Congress to the Department of Energy, who wrote with concern about “the rapidly escalating demands growth of the sector in relation to our country’s energy systems”.
All of this means that, after decades in which America’s electricity demand remained stagnant – thanks to economic changes and more efficient energy production – it is set to grow again. And the nation’s regulators may not be prepared. The nonprofit North American Energy Reliability Council recently said that energy demand “is increasing faster than at any time in the last five or more years” and estimated that 13 of the continent’s 20 electrical interconnection areas are at risk of an energy deficit this summer.