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America's (No) Productivity and (No) Credit Problem

Associated Press has carried a report today that two of the United States regional power systems—the Texas grid and the PJM Mid-Atlantic connector, and possibly the Southwest Power Pool in the Great Plains as well, are introducing procedures to cut off power to data centers in peak load emergency situations. An association of tech companies and Bitcoin miners, the Data Center Coalition, is raising a fuss about this, as well it might, since diesel generators that can keep a large data center operating are rare. But AP quotes Joe Bowring of Monitoring Analytics, a Mid-Atlantic grid watchdog firm: “Data center load has the potential to overwhelm the grid, and I think it is on its way to doing that.”

The basic problem comes from the fact that electricity consumption per capita in the United States has been declining since the 1990s, and electric capacity (what is called net summer installed capacity) has declined—though more slowly—since approximately 2005. (Again here, the long economic shadow of the 2007-08 crash is seen.) But now, suddenly since 2022, data centers have hit the grids, devouring electricity—now approaching 5% of national power consumption—while more baseline electric power plants (coal, nuclear, hydro) are being retired (12.5 gigawatts this year), than are being added.

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