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Artificial intelligence is not only pushing chip company stock prices to new heights, it is also pushing energy demand to a much higher level than anyone expected.
The nine-year growth forecast for North America has essentially doubled from a year ago, as companies begin building AI hosting facilities that make the demands of traditional data centers look dwarfed.
Last year, a five-year forecast from Grid Strategies predicted growth of 2.6%. That number has since nearly doubled to 4.7% — and the planners Predict peak demand To grow by 38 gigawatts. This is equivalent to the amount of energy needed 12.7 million homesa little more than Total number of housing units in Texas.
Perhaps more worryingly, experts say this is likely an underestimate of what the actual need will be, saying they expect the next forecast (in December of this year) will likely show a higher rate of growth nationwide.
“The US electric grid is not prepared for significant load growth,” Grid Strategies warned.
Artificial intelligence is a major part of the problem when it comes to increasing demand. Not only are industry leaders like OpenAI, Amazon, Microsoft, and Google building or looking for sites to build massive data centers to house the infrastructure needed to run large language models, but smaller companies are in on the act as well. It also requires huge energy needsas Washington Post Reports.
Meanwhile, the surge in interest in cryptocurrency that has come as a result of Bitcoin reaching new highs could impact energy demand as well. Bitcoin faces an event planned for later this year known as the “halving,” where the number of new coins in circulation will be reduced by 50%, and cryptocurrency miners will work harder than ever to obtain those coins. The growing number of electric cars and home appliances isn’t helping matters either.
All of this made highlighting power requirements a challenge. Georgia Power, the state’s main energy provider, was recently forced to increase its expected winter megawatt demand by up to 38%. This is partly due to state incentives for computer operations, something officials are now rethinking. Meanwhile, General Electric in Portland (Oregon) recently doubled its five-year forecast for new electricity demand.
A potential energy crisis could pose many potential problems for consumers. There are of course the obvious ones, like how do energy companies prioritize who gets power from the grid when it is at or near capacity? Lawmakers in several states are also looking at how to protect residential customers from having to pay for necessary upgrades that will largely be used to power data centers.
There are also environmental concerns. While there is a push to move to clean energy production methods, such as solar, due to large federal subsidies, many have not yet come online. Utility companies are putting pressure to delay the closure of fossil fuel plants (and some hope to operate more of them) to meet the increase in demand.
“Annual peak demand growth forecasts appear to be headed toward growth rates double or even triple what they have been in recent years,” Grid Strategies wrote. “Transmission planners need long-term forecasts of both electricity demand and electricity supply sources to ensure adequate transmission is available when and where it is needed. Such a failure to plan can have real consequences on investments, jobs and system reliability for all electricity customers.”
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