The CEO of Marathon Digital delves into the cryptocurrency market and mining practices in an exclusive interview with FOX Business.
The surge in artificial intelligence (AI) development, expanding clean technology manufacturing, and cryptocurrency mining is straining energy resources in the United States. The escalating demand is outpacing the capacity of energy sources to keep up.
The increasing industrial demand from technology firms, which operate data centers and train AI models, as well as the rise of electric vehicles, manufacturers, and innovative technologies like cryptocurrency, have led to a significant spike in the need for energy generation. The decommissioning of fossil fuel and nuclear power plants due to the escalating electricity demand is intensifying pressure on the country’s energy supply.
The North American Electric Reliability Corporation (NERC), a non-profit organization dedicated to ensuring dependable and efficient energy access in the U.S., Canada, and parts of Mexico, conducts assessments on the adequacy of energy supply for both summer and winter seasons, along with long-term reliability evaluations.
In its latest long-term reliability assessment conducted in 2023, NERC identified substantial increases in energy demand during the winters from 2020 to 2023. It predicted that the summer demand in 2024 would peak at the highest level since 2016, with winter demand reaching its highest point since at least 2015.
The report highlighted various risks to reliable energy supply across its transmission regions, pinpointing a high-risk zone for capacity shortages in the next four years, primarily spanning from Canada near the Great Lakes and Mississippi River down to the Gulf of Mexico. Additionally, most states west of the Mississippi River and the northeastern region were designated as elevated risk areas.
NERC emphasized that the Bulk Power System is on track to experience its highest demand and energy growth rates since 2014, primarily fueled by electrification and the anticipated surge in electric vehicle adoption over the assessment period. The organization also noted the challenges in resource growth as fossil fuel-based generation facilities are phased out, with over 83GW of generator retirements planned through 2033.
Andy Cvengros, the managing director of data center markets at JLL, expressed concerns to the Washington Post, stating that power companies are grappling with unprecedented challenges posed by the surge in energy demand across various sectors.
Sam Altman, the CEO of OpenAI, stressed the necessity of an energy breakthrough, such as broader adoption of nuclear fusion, to unlock the full potential of AI. He highlighted the substantial energy consumption associated with training large language models that power AI tools like ChatGPT, emphasizing the critical need for innovation in energy production.
Altman’s personal investment of $375 million in the nuclear fusion company Helion Energy underscores the importance of advancing sustainable energy solutions. Helion Energy, backed by key investor Microsoft, has secured a deal to supply energy, aligning with the mission of OpenAI.
Emerging technologies like cryptocurrency are also adding pressure to the electric grid, particularly due to the energy-intensive nature of crypto mining. The federal Energy Information Administration (EIA) has shown interest in gathering data from crypto miners to gain insights into their energy consumption patterns.
Despite initial pushback from the crypto industry citing data confidentiality concerns, the EIA plans to revise its data collection strategy, engaging in a federal rulemaking process that includes a public comment period before implementing any new measures.
