Legal experts Eliza Martin and Ari Peskoe explain how data centers' massive electricity demands could shift billions in infrastructure costs onto regular utility customers.
Not nearly as much as the data centers. Crypto can be located anywhere, the data centers are focused on being 'as close as possible' to the bulk of internet. Milliseconds matter to them. That means highly localized grid strain requiring lots of new distribution build outs.
The Future's market should be able to deal with huge new customers. Existing customers will be locked into current pricing. New Customers will either pay spot market prices, buy futures, or create their own electricity generation.
I meant that the futures market would be for electricity delivered in the future. Companies that generate electricity will sell future supply. Companies and people who use electricity would buy future supply based on their expected future use. Speculators will buy and sell. If a server farm wants to build a server, they will buy electricity at a higher price than those who have pre-existing futures contracts. If the price rises to a point where profit could be made by building a source of electricity and pre-selling the electricity it in the futures market, someone will build the plant. The electricity will already have been sold, so the company building the plant will not have to worry about stranded assets.
And again, that assumes the infrastructure exists to supply it. I can say entirely, we, the current rate payers are the ones being asked to fund the infrastructure expansion to accommodate that 'future'. It's not the new players on the block like data centers. That's literally the point of the pod.
The Transmission of the electricity and the generation of the electricity should be run by different companies. The customer should pay for the electricity cost at the point of delivery. The electricity should have dynamic pricing based on supply and demand. The cost of supply would be based on the cost of generation plus the cost of transmission. If my neighbor generates the electricity, there shouldn't be a transmission cost. Distribution: yes, but not Transmission. If no one else needs electricity from the new plant, the transmission lines don't need to be built from the plant to the town. The server farm company will have to pay for all of the transmission costs. This will encourage them to build the server farm right next to the generation plant. When it is cheaper to generate electricity locally, lots of electricity will be generated locally. Batteries will be installed and EVs with bidirectional charging will be used so that we need much less transmission capacity.
Another problem with costs, is billing customers a per kwh charge for the *infrastructure*. Distribution infrastructure does not degrade based on kwh usage alone. Solar/battery peeps get called 'leechers' for not paying enough for distribution maintenance when the problem is the legacy fee model.
David, I invite you to listen to the first 10 minutes of this episode. This is a monologue. Your guests are the experts, frankly and directly, I want to hear them not you.
I'm regular podcast listener, not this time,I gave up after 10 minutes.
How much of the data center demand is associated with cryptocurrency mining?
Not nearly as much as the data centers. Crypto can be located anywhere, the data centers are focused on being 'as close as possible' to the bulk of internet. Milliseconds matter to them. That means highly localized grid strain requiring lots of new distribution build outs.
The Future's market should be able to deal with huge new customers. Existing customers will be locked into current pricing. New Customers will either pay spot market prices, buy futures, or create their own electricity generation.
Future's markets are generally about fuel and materials, not infrastructure build out, no?
I live in Northern VA at the heart of this issue. Current ratepayers have to fund the infrastructure build out via higher rates.
I meant that the futures market would be for electricity delivered in the future. Companies that generate electricity will sell future supply. Companies and people who use electricity would buy future supply based on their expected future use. Speculators will buy and sell. If a server farm wants to build a server, they will buy electricity at a higher price than those who have pre-existing futures contracts. If the price rises to a point where profit could be made by building a source of electricity and pre-selling the electricity it in the futures market, someone will build the plant. The electricity will already have been sold, so the company building the plant will not have to worry about stranded assets.
And again, that assumes the infrastructure exists to supply it. I can say entirely, we, the current rate payers are the ones being asked to fund the infrastructure expansion to accommodate that 'future'. It's not the new players on the block like data centers. That's literally the point of the pod.
The Transmission of the electricity and the generation of the electricity should be run by different companies. The customer should pay for the electricity cost at the point of delivery. The electricity should have dynamic pricing based on supply and demand. The cost of supply would be based on the cost of generation plus the cost of transmission. If my neighbor generates the electricity, there shouldn't be a transmission cost. Distribution: yes, but not Transmission. If no one else needs electricity from the new plant, the transmission lines don't need to be built from the plant to the town. The server farm company will have to pay for all of the transmission costs. This will encourage them to build the server farm right next to the generation plant. When it is cheaper to generate electricity locally, lots of electricity will be generated locally. Batteries will be installed and EVs with bidirectional charging will be used so that we need much less transmission capacity.
Full blown gish gallop. Good Day
Listening to this episode back to back with this podcast https://podcasts.apple.com/us/podcast/microsoft-cuts-the-power-to-ai/id1730587238?i=1000698829485
Another problem with costs, is billing customers a per kwh charge for the *infrastructure*. Distribution infrastructure does not degrade based on kwh usage alone. Solar/battery peeps get called 'leechers' for not paying enough for distribution maintenance when the problem is the legacy fee model.
Rhodium Group just published a study on dedicated geothermal feasibility for data centers:
https://rhg.com/research/geothermal-data-center-electricity-demand/
David, I invite you to listen to the first 10 minutes of this episode. This is a monologue. Your guests are the experts, frankly and directly, I want to hear them not you.
I'm regular podcast listener, not this time,I gave up after 10 minutes.
Be nice! I've got David's "monologue" timed to a brisk 5 min 7 seconds
I have discussed this in my weekly column recently. https://www.newsmax.com/paulfdelespinasse/led-solar-wind/2025/02/21/id/1200030/