Key Takeaways
- The rapid rise of data centers in the U.S. is increasing the risk of potentially catastrophic electricity surges in the national grid.
- As energy demand grows for crypto mining and Big Tech, risks of disruption to their activities are increasing.
- Some grid operators have called for data centers to “ride through” voltage dips.
On July 10, 2024, sixty data centers abruptly disconnected in a region known as “Data Center Alley” close to Washington, D.C., in what was meant to be a routine safety switch to backup generators.
Instead, the routine safety measure created a dangerous electricity surge, forcing power operators to scramble to prevent a massive blackout.
As data centers rapidly expand across the U.S., these incidents have revealed a massive risk of potential disconnections to crypto miners and U.S. Big Tech.
Dangerous Safety Measures
The electricity surge last year was caused by a safety mechanism switching some data centers to backup generators.
This is intended to protect computer chips and data center equipment from voltage fluctuations. However, the lack of power to the centers caused a huge swell in excess electricity, with nowhere for it to go.
According to Reuters, the electricity surge forced data center operators to pull back electricity from the data centers to protect from a series of power outages across the local area.
Although energy plants usually have measures in place by grid operators for tripping offline, the vast expansion of crypto mining and AI training has led to an unprecedented level of energy.
Grid operators are now having to balance between domestic supplies for towns and cities with the rapidly growing demands of Big Tech and crypto miners.
According to Reuters, the 200 data centers within “Data Center Alley” consume roughly the same electricity as Boston.
“As these data centers get bigger and consume more energy, the grid is not designed to withstand the loss of 1,500-megawatt data centers,” John Moura, Director of Reliability Assessment and System Analysis for NERC, told Reuters. “At some level, it becomes too large to withstand unless more grid resources are added.”
Alison Silverstein, former senior adviser to the U.S. Federal Energy Regulatory Commission chairman, told the publication that the incident showed data centers have the “potential to cause cascading power outages for an entire region.”
Potential Blackout Incidents Increasing
The number of potentially catastrophic events, like the one in Data Center Alley last year, is reportedly growing yearly.
Last May, research from the Electric Power Research Institute (EPRI) found that data centers could use up to 9% of U.S. electricity generated by 2030.
According to the Institute, the annual growth rate of AI electricity usage could range from 3.7% to 15% through 2030, depending on the efficiency of newly built data centers.
“The U.S. electricity sector is working hard to meet the growing demands of data centers, transportation electrification, crypto-mining, and industrial onshoring while balancing decarbonization efforts,” said EPRI Vice President of Electrification and Sustainable Energy Strategy David Porter.
A Department of Energy report in December, 2024, claimed that data center usage in the U.S. is projected to double or triple by 2028.
Crypto Mining and AI
The rapid rise of crypto miners and AI training is leading to unprecedented energy consumption levels in the U.S.
In December 2022, a power surge in Texas caused nearly 400 crypto miners, data centers and industrial facilities to suddenly disconnect, creating a major electricity surplus that grid operators struggled to manage.
Regulators are now concerned that as crypto mining and AI demand grow, these disruptions will become more frequent and severe.
To prevent this, some grid operators have called for data centers to “ride through” voltage dips, which usually spark a switch to backup generators.
The Electric Reliability Council of Texas proposed new restrictions last year that would have forced crypto miners and Big Tech to stay online during voltage fluctuations.
However, the proposal was withdrawn due to pushback from the Data Center Coalition, which includes Amazon, Google and Meta.
“Data center hardware and power supplies, similar to other electronics, are very sensitive to power supply stability,” the coalition said. “Deviating from this range will deteriorate the optimal performance, reduce longevity, or damage the components beyond repair.”
Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
