Crypto Mining and Electric Vehicles May Challenge the Grid
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According to the North American Electric Reliability Corporation (NERC), emerging trends such as crypto mining and increased adoption of electric vehicles (EVs) will pose power reliability challenges in the years to come. Exasperating the challenge is the fact that more power plants are shutting down than are being brought online, which means that the challenge is on both the supply and demand sides of the equation.
Details on the Impact of Crypto Mining and EV Adoption for Reliability
According to NERC’s most recent long-term reliability assessment, these issues will “significantly alter the nature of how the system is going to be operated.” Specifically, NERC estimates that electric vehicles could increase overall load by up to 25% in less than 10 years. As for crypto mining activities, no percentage increase was provided, but NERC did indicate that the projected growth in this activity would have a “significant effect on demand.”
In terms of the supply side, existing plant shutdowns are outpacing the development of new generation sources. Specifically, at least 90 gigawatts of fossil fuel and nuclear capacity is set to retire by 2027. The idea is to replace this capacity largely with renewable energy sources, but the pace for doing this has been too slow, resulting in a net capacity loss.
The impact of these trends is region-specific. In Texas, ERCOT (Electric Reliability Council of Texas) launched a voluntary curtailment program for crypto mining. In the Midwest, MISO (Midcontinent Independent System Operator) is facing the prospect of a 1,300-megawatt shortage during the summer of 2023.
Overall, NERC says that California and the Midwest are at high risk for electricity shortages from 2023 to 2027, while the Southwest, Northwest, Texas and New England have adequate capacity for so-called blue-sky days but are likely to face shortfalls in severe conditions.
The bottom line is that EV adoption and crypto mining are probably here to stay, and as such utilities across the country need to ramp up their efforts to prepare for this inevitability.
