A new report warns that the growing energy demand from data centres, particularly their reliance on natural gas, is expected to push up US electricity bills. The rising costs could further strain the economics of cryptocurrency mining, which is already under pressure from the recent halving and network difficulty increases.
The gas-powered data centre boom
Data centres are expanding rapidly to support cloud computing, AI workloads, and streaming services. To meet their massive power needs, many operators are turning to natural gas-fired plants. The report says this increased gas consumption will ripple through regional power grids, driving up wholesale electricity prices. Utilities will pass those higher costs on to residential and commercial customers, including industrial users like crypto miners.
Crypto miners face another cost headwind
Bitcoin mining is an energy-intensive business. Miners already operate on thin margins, especially after the April 2024 halving cut block rewards in half. Higher electricity bills would directly eat into profitability. The report warns that if power costs rise significantly, some mining operations may become unviable, forcing them to shut down or relocate to regions with cheaper energy. This could accelerate the ongoing consolidation in the mining sector, where large, efficient players with access to low-cost power are better positioned to survive.
What the report says
The analysis does not name specific data centre operators or mining firms, but it models the impact of projected data centre load growth on regional electricity markets. It finds that even a modest increase in gas-fired generation can lift prices across the board. The report also notes that the trend is likely to intensify as more data centres come online in the next few years. For crypto miners, the timing isn't great — many are already struggling with debt and rising hardware costs.
The report's findings come as regulators and grid operators grapple with the rapid expansion of data centres. The next step is likely to be increased scrutiny of energy procurement by both data centres and miners, with potential policy responses ranging from demand-side management to stricter emissions rules.
