Texas’ Power Grid Needs Larger Increase Than Expected to Handle AI, Bitcoin Mining

Texas recently revised estimates of how much capacity its grid will need, citing demand from AI and bitcoin mining.

The political climate towards these two industries is souring because of increased energy demands, while Trump is doubling down on his support for mining.

Texas’ grid will soon need to dramatically expand to meet growing demand from bitcoin miners and artificial intelligence data centers, while the political climate towards both these industries may be souring.

Speaking to the Texas Senate Business and Commerce Committee Wednesday, Pablo Vegas, the CEO of the Electric Reliability Council of Texas (ERCOT), which manages the state’s power grid, said that demand from these two industries is testing the grid forcing officials to revise estimates for how much energy it will need to produce by the end of the next decade.

“We’re trying to put together a puzzle that kind of illuminates how this market can work for the next five to ten to fifteen years,” Vegas is quoted by local media as saying.

Vegas said that within the next six years capacity needs to grow from 85,000 megawatts to 150,000 megawatts. Initially the expectation was that the grid only needed 130,000 megawatts in this time frame.

Bitcoin mining and AI data centers will be responsible for more than half of the added growth on the Texas grid, he said. Data centers for AI workloads use significantly more power than their peers because of the intensity of the workload.

Research from Vrije Universiteit in Amsterdam projects that AI could be responsible for as much electricity consumption as bitcoin in just a few years.

All this comes as political climate towards bitcoin and AI’s power consumption is souring.

State Sen. Jose Menendez (D-San Antonio) said during the testimony that it was “inherently unjust” mining operations and AI data centers could move to the state to take advantage of its low cost of energy while everyday Texans were “making tough decisions about costs”.

In a post on X, Lt. Gov. Dan Patrick wrote that these two industries “produce very few jobs compared to the incredible demands they place on our grid” and that the Texas Senate would be taking a closer look.

“I’m more interested in building the grid to service customers in their homes, apartments, and normal businesses and keeping costs as low as possible for them instead of for very niche industries that have massive power demands and produce few jobs,” he wrote. “We want data centers, but it can’t be the Wild Wild West of data centers and crypto miners crashing our grid and turning the lights off.”

In December 2022, the Canadian province of British Columbia enacted an 18-month moratorium on new crypto mining operations citing the low number of jobs they create compared to the high energy demand. A provincial court upheld that ban earlier this year (the moritorium is scheduled to expire by the end of July).

All this comes as Republican front runner Donald Trump doubles down on his support for the bitcoin mining industry.

“Bitcoin mining may be our last line of defense against a CBDC. Biden’s hatred of Bitcoin only helps China, Russia, and the Radical Communist Left. We want all the remaining Bitcoin to be MADE IN THE USA!!! It will help us be ENERGY DOMINANT,” Trump said in a recent post on the social media platform Truth Social.