Energy Challenges in North America
North America faces potential energy shortages due to the construction of new energy-intensive data centers for artificial intelligence and crypto mining. The North American Electric Reliability Corporation (NERC), a nonprofit organization responsible for coordinating the electrical grids under government oversight, warns of this issue. In their current ten-year outlook, they emphasize the urgent need to expand energy generation and transmission capacities. By 2025, power shortages could occur in the Midwest.
Compounding the situation is the ongoing energy transition in North America, where older coal power plants are being shut down in favor of renewable energy sources. The NERC report states that the closure of power plants with a capacity of 115 gigawatts is planned in the coming years. They recommend a careful review of this timeline. Often, photovoltaic systems and wind energy replace fossil fuel power plants, but these are less reliable due to weather dependency and other variable factors.
The demand for electricity is growing at a rate not seen in over 20 years. The summer peak load is expected to increase by 132 gigawatts over the next 10 years, and the winter peak by 149 gigawatts, surpassing previous forecasts of 80 and 92 gigawatts, respectively. Besides AI data centers and crypto mining, the rising number of electric vehicles and increased use of heat pumps in households are driving electricity demand.
If nothing is done, the safety buffer for power supply in almost all areas will fall below the threshold values. NERC also anticipates a further increase in energy demand. In the worst-case scenario, power outages could occur if sufficient capacities for power generation and transmission are not available.
Big tech companies like Microsoft, Amazon, and Meta are already seeking solutions. They plan to generate the energy for their AI data centers themselves or have it produced by partners. Nuclear power plays a significant role in these plans. There are efforts to refurbish and reactivate old nuclear power plants or build new ones. These could help achieve climate goals while ensuring adequate electricity supply.