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Crypto, AI to drive surge in energy use after decade of flat demand

Mar 13, 2024 - markets.businessinsider.com
The rise of artificial intelligence (AI) and cryptocurrency industries is expected to significantly increase energy consumption in the US, according to energy experts. Data centers, which power these industries, are predicted to triple their power consumption over the next seven years. The growth in electricity demand is expected to rise from 2.6% last year to 4.7%, driven mainly by these data centers. Crypto mining alone accounted for 0.6%-2.3% of the US's electricity demand last year, equivalent to the total electricity used by Australia in 2023.

However, there are concerns that the US electric grid may not be able to handle this surge in demand. Building new power plants and updating the existing grid system is a time-consuming process. The situation is further complicated by the ongoing climate crisis and policy issues, such as the Biden administration's goal to decarbonize the grid, which could make it even more challenging to meet the increasing power demand.

Key takeaways:

  • Crypto and AI industries are expected to significantly increase energy use, with data centers predicted to triple their power consumption in the US over the next seven years.
  • Annual power demand has been flat for the past decade, but consumption and peak demand forecasts are now higher than at any point in the last decade.
  • The US electric grid may not be ready to handle the surge in power demand, and building new power plants or updating the existing grid system could be a lengthy process.
  • The push to decarbonize the grid, a goal of the Biden administration and about 20 states, could be complicated by the increased power demand from the crypto and AI industries.
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