North America is facing energy challenges as cryptocurrency mining and AI data centers drive electricity demand to unprecedented levels.
As the cryptocurrency mining and artificial intelligence industries connect large data facilities to the grid, electricity demand across North America is reaching new highs.
This increased electricity demand is expected to create challenges in forecasting and reliability, according to a report from the North American Electric Reliability Corporation (NERC).
Electricity consumption in cryptocurrency mining can be variable, often fluctuating with market prices, further complicating energy grid management and leading to sudden fluctuations in load demand during normal operations.
Electricity consumption in cryptocurrency mining can be variable, often fluctuating with market prices, further complicating energy grid management and leading to sudden fluctuations in load demand during normal operations.
The NERC report highlights the strain on grid reliability and increased risk of energy shortages posed by cryptocurrency mining and AI operations. It also aims to address future challenges to ensure a stable supply of electricity to North America.
Cryptocurrency and AI are expected to boost energy demandSignificant growth, especially in areas such as Texas, means demand will increase 4.6% annually through 2029 during peak summer demand, four times higher than previous forecasts, according to NERC’s latest long-term reliability assessment.
This energy demand may change as cryptocurrency mining facilities adjust their consumption based on electricity prices or as AI data centers increase their energy consumption for processing, cooling, and storage.
Risks to reliability and stability
As cryptocurrencies and AI become more mainstream over time, operations associated with them pose significant challenges to the stability and reliability of the energy grid, especially in the face of potential network stresses during peaks and disruptions. In Texas, home to a high concentration of cryptocurrency mining and AI centers, the Electric Reliability Council of Texas (ERCOT) has reported increased risks associated with contracted and uncontracted energy loads.
Sudden changes in loads in the cryptocurrency mining and AI industries can mimic issues experienced with inverter-based resources, such as failures and interruptions during price spikes, creating new risks for grid operators managing variable renewable energy resources.
Strategies to address rising electricity consumption
NERC has called for proactive measures to address growing strains on North America’s energy grid, proposing improved demand forecasting, advanced transmission planning, and expanded demand-side management (DSM) programs.
ERCOT has introduced energy response and demand response programs to balance energy grid loads at critical times.
Texas has also introduced legislation such as Texas HB 3390, which mandates enhanced tracking of distributed energy resources (DERs) to improve reliability ratings. In tandem with the growing concerns, some mining companies are betting on renewable energy sources, such as MARA (formerly Marathon Digital) buying a wind farm in Hansford County, Texas.
