The IEA just released its “Electricity 2024” report. The increase in electricity use in advanced countries has slowed in the last two years. This, in turn, has slowed the growth of global usage. However, global use is expected to reverse that trend and rise sharply over the next three years–a rate of 3.6% per annum through 2026. A primary reason for this growth is “electricity consumption from data centres, artificial intelligence (AI) and the cryptocurrency sector could double by 2026.”
The increase in global electricity use is also due to an improved outlook for the economy and the demand that follows under these circumstances. Additionally, the rapidly rising electricity consumption by data centres, artificial intelligence (AI) and cryptocurrency alone, is likely to match Japan’s electricity demand in 2026. The IEA expects there to be new regulations to set guardrails on these three relatively new high-tech sources of consumption.
Bitcoin mining, as an example of crypto use, has caused a great deal of controversy. One major concern is how much it will strain the US electric grid, which is already viewed as weak and a major risk to America’s national interests. It has failed in the past, causing blackouts. There is also anxiety that the structure is poorly protected from hacks by foreign interests.
The New York Times attacked the industry recently in an article titled “The Real-World Costs of the Digital Race for Bitcoin: Bitcoin mines cash in on electricity — by devouring it, selling it, even turning it off — and they cause immense pollution. In many cases, the public pays a price.” Among the New York Times observations was that after a catastrophic failure of the Texas state grid, “…in the husk of a onetime aluminum smelting plant an hour outside of Austin, row upon row of computers were using enough electricity to power about 6,500 homes as they raced to earn Bitcoin, the world’s largest cryptocurrency.” What was not addressed in this article was the value of cryptocurrencies and their impact on the global economy. The market cap of Bitcoin is around $800 billion.
The EAI report raises a question it does not answer. If consumption by the leading-edge technologies of the early 21st Century continues at this pace, how will public policy balance the traditional needs for electricity with those that could not have been anticipated less than a decade ago?