How much power does AI and crypto use?

Massachusetts’ first cannabis ‘micro-business’ opened in 2020. Pat Greenhouse/The Boston Globe

After being flat for nearly two decades, demand for power in the US is soaring. A recent report by Grid Strategies, a power sector consultancy, estimated that annual electricity demand will grow by 0.9%, while capacity added to the grid is projected to increase by just 0.5%.

What is the cause of this grinding? First, a boom in domestic industry, and a growing need for AI-driven computing power that is expected to increase the amount of data centers across the country.

But there are some lesser-known factors that could push America’s grid over the edge. The AI ​​boom, the continued popularity of crypto-mining and legalized marijuana all add potential stress to the grid at a time when extreme weather makes it more vulnerable.

Data centers—essential to cloud computing—account for about 2.5% of the nation’s energy consumption today. By the end of the decade, their power consumption is expected to triple, according to Boston Consulting Group, fueled by the growth in AI applications as well as cryptocurrency mining. The International Energy Agency took a similar view and predicted that data center power needs would double between 2023 and 2026. In the US, the growth in data centers accounted for one-third of the additional demand in that period. PJM, an interconnection utility that covers parts of 13 states, from Ohio to Virginia, has “observed unprecedented data center load growth,” according to Grid Strategies. Virginia contains the U.S.’s largest concentration of data centers, with Loudoun County nicknamed “Data Center Alley.” The state’s utility company, Dominion Energy, has slowed or turned away centers saying it can’t keep up with power demand, according to the 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 are data-dense processes that use much more power than, say, an equivalent Google search. One study in Joule projected that AI applications worldwide 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 leads to intense energy needs.

“It’s really just a matter of luck,” Samantha Robertson, a member of the strategy team at Bitcoin company Bitdeer, told the Texas Tribune. “To increase your chances, it makes sense to run these computers at scale.”

Nationwide, crypto mining claims as much as 2.3% of America’s energy consumption, 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’ 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-obsessed industry: Marijuana. The rapid decriminalization and legalization of the drug, not to mention younger Americans’ preference for bot over booze, has created tremendous growth in the weed market. Half of US states now have some form of legal cannabis, either recreational or medical, and all that weed has to be grown somewhere.

And growing the plant, it turns out, is an electricity-intensive business. Cannabis plants require lighting as intense as you would 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 uses about 1% of the nation’s electricity. Today, that number is surely greater based on its explosive popularity. In Massachusetts today, marijuana 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 concern about the “industry’s rapidly growing demands on our country’s energy systems.” All of which means that after decades of America’s electricity needs being flat — thanks to economic shifts and more efficient power generation — they’re about to boom again. And the nation’s regulators may not be prepared. The nonprofit North American Energy Reliability Council recently said that the demand for energy “increased faster than at any time in the last five or more years,” and estimated that 13 of the continent’s 20 power connection areas are at risk of a power shortage this summer.