After being flat for nearly two decades, demand for power in the U.S. is soaring. A recent report by Grid Strategies, a power sector consulting company, estimated that yearly electricity demand is set to grow by 0.9%, while the capacity added to the grid is planned to increase by just 0.5%.
What’s the cause of this crunch? First, a boom in domestic industry, and growing need for AI-driven computing power which is projected to increase the amount of data centers across the country.
But there are a few lesser-known factors that could push America’s grid over the edge. The AI boom, the ongoing popularity of crypto mining, and legalized marijuana are all adding potential strain to the grid at a time when extreme weather is making it more vulnerable.
Data centers—essential for cloud computing—today make up about 2.5% of the nation’s energy consumption. By the end of the decade, their power use is expected to triple, according to Boston Consulting Group, boosted by the growth in AI applications as well as cryptocurrency mines. The International Energy Agency had a similar take, projecting that data centers’ power demands would double between 2023 and 2026. In the U.S., the growth in data centers is responsible for one-third of the added demand in that time period. PJM, an interconnection utility that covers parts of 13 states, from Ohio to Virgiania, has “observed unprecedented data center load growth,” according to Grid Strategies. Virginia contains the U.S.’ largest concentration of data centers, with Loudoun County nicknamed “Data Center Alley.,” The state’s utility, Dominion Energy, has delayed or turned away centers saying it can’t meet power demand, according to industry publication Data Center Dynamics.
AI and crypto are both energy-intensive activities. Training an AI model on terabytes of data as well as feeding it prompts are data-dense processes that use much more power than, say, an equivalent Google search. One study in Joule projected that, globally, AI applications could use as much power as the entire nation of the Netherlands by 2027.
Crypto is a power hog for a similar reason. Miners compete to be the first to solve complex problems that are rewarded with crypto; because the chances of solving it first are infinitesimally small, miners have an advantage by using more and faster computers, which translates into intense energy demands.
“It really is just a matter of luck,” Samantha Robertson, a member of the strategy team at the Bitcoin company Bitdeer, told the Texas Tribune. “In order to increase your chances, it makes sense to have these computers running at scale.”
Nationwide, crypto mining claims as much as 2.3% of America’s energy use, according to the Energy Information Administration. In Texas, a popular destination for crypto mining operations, miners have requested the equivalent of 41 new nuclear reactors’ worth of power, according to the Guardian. Texas’ grid “has experienced continued rapid load growth” since last summer, according to Grid Strategies.
Then there’s another burgeoning, power-hungry industry: Marijuana. The rapid decriminalization and legalization of the drug, not to mention younger Americans’ preference for bud over booze, has created tremendous growth in the weed market. Half of U.S. states now have some form of legal cannabis, either recreational or medical, and all that weed needs to be grown somewhere.
And growing the plant, it turns out, is an electricity-intensive undertaking. Cannabis plants demand lighting as intense as you’d see in 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 used about 1% of the nation’s electricity. Today that number is surely larger based on its explosive popularity. In Massachusetts, marijuana today accounts for 10% of the state’s indoor energy use; in Colorado, one of the first states to legalize weed in 2014, it now emits as much carbon as mining, according to a letter from two members of Congress to the Energy Department, who wrote with concerns about the “industry’s rapidly growing demands on our country’s energy systems.”
All this means that, after decades of America’s electricity demands being flat—thanks to economic shifts and more efficient power generation—it’s set to boom again. And the nation’s regulators may not be prepared. The nonprofit North American Energy Reliability Council recently said that energy demand was “rising faster than at any time in the past five or more years,” and estimated that 13 of the continent’s 20 power interconnection areas are at risk of a power shortfall this summer.
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