The North American Electric Reliability Corporation (NERC) has raised concerns about the growing energy demands of the cryptocurrency and AI industries, which could threaten grid reliability.
Energy Consumption Challenges of Crypto and AI
In its latest Long-Term Reliability Assessment report, NERC highlights the unpredictable and energy-intensive nature of crypto mining and AI data centres. These operations, characterized by fluctuating energy needs, adjust consumption based on electricity prices or increase demand for processing, cooling, and storage. According to the body, this variability poses risks to grid stability and amplifies the potential for energy shortfalls.
NERC's Recommendations for Grid Stabilization
NERC projects a 4.6% annual increase in peak summer electricity demand through 2029, with Texas expected to experience demand growth four times higher than previous forecasts. To address these challenges, NERC recommends proactive measures such as enhanced demand forecasting, advanced transmission planning, and expanding demand-side management (DSM) programs to stabilize the grid.
Global Energy System Impacts
These warnings coincide with significant growth in North America’s crypto-mining sector. For instance, Hut 8 recently secured a power purchase agreement in West Texas, granting it access to 205 megawatts of electricity. Meanwhile, NERC’s warnings align with concerns raised by Russian officials about potential energy shortages due to the rapid growth of crypto mining in the country, especially in Siberia.
Given the increasing energy demands from the cryptocurrency and AI sectors, energy regulators need to implement more effective measures to ensure grid reliability and prevent potential shortfalls.
