Cryptocurrency mining and artificial intelligence operations are driving demand for electricity to new highs across North America as industries connect large-scale data facilities to the energy grid.
According to a North American Electric Reliability Corporation (NERC) report, this growth in electricity demand is expected to present challenges to forecasting and reliability.
Crypto mining power use can vary, often scaling with market prices, which adds further complexity to energy grid management and sudden fluctuations in load requirements during normal operations.
The NERC report highlights the strain on grid reliability and the increased risk of energy shortfalls posed by crypto mining and AI operations. It also seeks to address the issues for the future to ensure a stable power supply for North America.
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Crypto, AI expected to spike energy demands
The NERC’s latest Long-Term Reliability Assessment shows that significant growth, particularly in regions like Texas, implies an increase of 4.6% annually to 2029 at peak summer demand, which is four times more than previous projections.
The report highlights that AI data centers and crypto mining present unique challenges with their energy-intensive nature and varying load behaviors.
These energy demands can shift when crypto-mining facilities adjust consumption based on electricity prices or AI data centers ramp up energy use for processing, cooling and storage.
Projected Reserve Margin Shortfall Areas. Source: NERC
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Risks to reliability and stability
With crypto and AI becoming mainstream over time, their associated operations pose significant challenges to energy grid stability and reliability amid potential grid strain, particularly during peak periods or operational faults.
In Texas, where crypto mining and AI hubs are concentrated, the Electric Reliability Council of Texas (ERCOT) reports increasing risks associated with contracted and non-contract energy loads.
Sudden load changes in the crypto mining and AI industries potentially mimic issues seen with inverter-based resources, like disconnections during faults or price spikes, and introduce new risks for grid operators managing variable renewable energy resources.
Projected Growth in Data Centers in the US. Source: NERC
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Strategies to address rising electricity consumption
NERC is calling for proactive measures to address the increasing strain on North America’s energy grid, suggesting improved demand forecasting, advanced transmission planning and expanded demand-side management (DSM) programs.
ERCOT has implemented energy response and demand response programs to balance the energy grid load during critical periods.
Texas has also introduced legislation, like Texas’ HB 3390, which mandates improved distributed energy resources (DERs) tracking to improve reliability assessments.
In tandem with the increasing concerns, some mining firms are shifting toward renewable energy sources, like MARA’s (formerly Marathon Digital) acquisition of a wind farm in Hansford Country, Texas.
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