Challenges Facing the U.S. Power Grid Amid Surging Energy Consumption

. Introduction: The Texas Freeze Event—A Prelude to the U.S. Power Grid Crisis

In the month and year, Texas, USA, was struck by a polar vortex, with temperatures plummeting to minus degrees. This extreme weather event served as a painful rehearsal for the U.S. power grid crisis, exposing deep-seated vulnerabilities and contradictions within its electrical system.

The consequences of this cold wave were extremely severe: Electricity prices soared, with wholesale electricity prices skyrocketing from a few cents per kilowatt-hour to $9/kWh (approximately 65 RMB/kWh); Humanitarian disaster, over 200 people died from the extreme cold and power outages, including an 11-year-old boy, Cristian Pavon Pineda; Capital frenzy, while the public suffered, energy traders and companies (such as the energy company owned by Texas billionaire and Dallas Cowboys owner Jerry Jones) made huge profits due to the surge in energy prices, describing those days as "like hitting the Jackpot."

The core contradiction behind the event has become evident: the conflict between the survival rights of ordinary people and the development rights of tech giants/capital. Electricity, once an infrastructure, has transformed into a luxury more expensive than gold and Bitcoin.

. Year: The Real Crisis—Becoming an "Electricity-Guzzling Beast"

In January 2025, the U.S. government declared a national energy emergency. The direct cause of this emergency was the unprecedented electricity demand driven by the explosive growth of Artificial Intelligence (AI). The power consumption of the AI industry has reached astonishing levels: training a single large AI model (such as OpenAI's model) consumes approximately 1,100,000 megawatt-hours of electricity, which is equivalent to the annual electricity usage of 1 million American households.

The power pressure brought by AI has tangibly impacted American society: in Virginia, where data centers are concentrated, power outage durations have surged by 200% year-on-year; residential electricity prices have skyrocketed by 30% in just a few years; Microsoft CEO Satya Nadella even admitted that the company has piles of GPUs sitting idle in warehouses due to power shortages. It can be said that the Texas freeze scenario is repeating itself, but this time, the hand "clutching the lifeline of electricity" has shifted from extreme weather to artificial intelligence.

. The underlying logic of the U.S. power grid: the transition from "survival" to "business."

The crisis of the U.S. power grid is not accidental; its root lies in a fundamental shift in the underlying logic—from a "survival" orientation that ensures societal operation to a complete turn toward a "business" orientation driven by capital pursuit of profit. This transformation has undergone a long historical evolution. In its early days, under the guidance of the "natural monopoly" theory proposed by the "father of the grid," Samuel Insull, the U.S. power grid implemented a model of unified planning and government regulation. It was once an industrial marvel that attracted worldwide attention, effectively ensuring the accessibility and stability of electricity.

In the 1970s and 1980s, the rise of neoliberal ideology led Wall Street capital to view the power grid as a "bullshit natural monopoly" with meager profits, strongly advocating for its dismantling. This became a critical turning point in the development of the U.S. power grid. Driven by capital, the grid was forcibly split into multiple segments, including generation, transmission, and retail, ushering in a frenzy of "free market" activity. However, this dismantling also shattered the "backbone" of the U.S. power grid, laying the groundwork for a series of subsequent crises.

One of the "Deadlocks" in the U.S. Power Grid: Supply Chain Disruptions and Aging Equipment.

When the United States wanted to rebuild its power grid due to electricity shortages caused by AI, it found itself trapped in a dual dilemma of supply chain issues and aging equipment, making grid upgrades extremely difficult. The key equipment for grid upgrades, large transformers, faces severe shortages: in 2021, the lead time for ordering a transformer was 50 weeks; by 2024, this lead time had extended to 120 weeks; while the wait time for large transformers is as long as four years.

The United States, which once manufactured the world's first transformer, now has virtually zero domestic production capacity in this field. The grain-oriented silicon steel required for transformer manufacturing is produced by only one company in the entire country, and most of its production capacity has been relocated to Mexico, Canada, and other regions, further exacerbating the fragility of the supply chain. Meanwhile, the existing U.S. power grid equipment is severely aged: 70% of transformers and transmission lines have been in operation for more than 25 years; the average age of large transformers has reached 40 years, exactly hitting the limit of their designed lifespan; at the same time, the grid's compliance reserve margin is only 20%, indicating a clearly insufficient ability to withstand shocks. Under the combined effect of multiple factors, the U.S. power grid has become a "trapped beast" doubly locked by supply chain disruptions and equipment aging.

. The Second "Deadlock" of the U.S. Power Grid: The Pitfalls of Electricity Liberalization and "Shareholder Primacy"

Electricity deregulation reform and the capital logic of "shareholder primacy" together constitute another deadlock for the U.S. power grid, where the safety and stability of the grid are subordinated to the pursuit of capital profits. The core of the U.S. electricity deregulation experiment is "separation of generation and grid," which splits the power grid into three independent segments: first, power plants (privately owned), which focus solely on generating electricity, pursue profit maximization, and hope that electricity becomes "more valuable when scarce"; second, transmission grids, which are responsible only for maintaining the lines and are unwilling to spend extra on upgrades as long as the lines operate normally; and third, electricity retail companies, which have no physical assets, merely buy and sell electricity through offices, acting as "scalpers."

The logic of "shareholder primacy" dominates the decision-making direction of power giants. Take the choice faced by a power company CEO as an example: Option A is to spend $1 billion to replace aging equipment and ensure grid security, but this is a pure expense that would lead to ugly financial reports, falling stock prices, and the CEO might even be fired; Option B is to use $1 billion to repurchase shares or distribute dividends to shareholders, driving up the stock price, and the CEO could receive a huge bonus. Ultimately, almost all major U.S. power giants have chosen Option B. What’s more serious is that over the past decade (2014-2024), the U.S. has frantically built unstable power sources such as wind and solar, while drastically reducing the most stable and reliable thermal and nuclear power capacity, cumulatively cutting 73.6 gigawatts. This approach is like "tearing down the load-bearing wall that can withstand typhoons and replacing it with a sunshade that depends on the weather," further undermining the stability of the power grid.

. The Third "Dead End" of the U.S. Power Grid: Artificially Created "Islands" and Scarcity

The U.S. power grid is not a unified national network but is artificially divided into isolated "islands." This fragmentation is not due to technical limitations but is deliberately engineered by capital to create scarcity and drive up prices. The U.S. grid is divided into three independent regional networks: the Eastern Interconnection, the Western Interconnection, and the most representative Texas (ERCOT) grid, with the Texas grid exhibiting the most pronounced "island" characteristics.

The Texas power grid refuses to connect to the interstate grid, with the core motivation being to pursue "freedom," avoid federal regulation, and achieve autonomous pricing. However, the cost of this choice is extremely heavy: during the 2021 cold wave, Texas power plants were paralyzed due to a lack of anti-freeze measures. Neighboring states had sufficient electricity but were unable to provide assistance, leaving Texas completely isolated as a "gate-less island," exacerbating the severity of the disaster. In Wall Street's business logic, a grid that never lacks electricity is a "failed business model." By cutting the grid into "isolated islands," scarcity can be created during crises, driving electricity prices to astronomical levels (e.g., in Texas, prices can reach as high as $9,000 per megawatt-hour). During the California electricity crisis 20 years ago, Enron traders artificially shut down generators to create congestion and panic, driving up electricity prices, and famously chanted the slogan "Burn Baby, Burn," becoming a classic example of this logic.

. The rules of the capital game: "" in disaster

在美国的资本游戏规则下，灾难不仅不是需要规避的风险，反而成为资本牟利的“狂欢时刻”，这种规则从根本上背离了公共利益。2021年德州寒流期间，天然气管道因未做防冻措施流速变慢，天然气公司并未选择抢修，而是直接On-site price increase，价格从2美元/单位暴涨至数百美元。富豪Jerry Jones旗下的天然气公司在那几天赚得盆满钵满，他兴奋地将这一时期称为“中了Jackpot”。

In the U.S. legal and business system, the CEO's "Fiduciary Duty" is defined as making money for shareholders, not taking on social responsibility. If a company chooses to lower prices to help people during a disaster, the CEO may instead be sued by the board of directors and abandoned by Wall Street. Even worse, U.S. energy policy is as unpredictable as "flipping a pancake" (such as adjustments to new energy subsidies in the "Inflation Reduction Act"), causing companies to hesitate in making decade-long investments in the power grid. In this environment, the optimal strategy for companies becomes "Don't play, or go all in, make a profit and run.", further hindering the long-term upgrading and maintenance of the power grid.

. The Ultimate Challenge and the Future of "Power Folding"

The sustained explosive growth of the AI industry is posing the ultimate challenge to the U.S. power grid, while the inherent difficulties in grid infrastructure make this challenge difficult to address, potentially giving rise to a fragmented future of "power folding." The electricity consumption of AI has already permeated everyday applications; for example, the power used by ChatGPT for each conversation is enough to boil a kettle of water. It is predicted that by 2030, the electricity shortfall in the United States due to AI will reach as high as Giva. This shortfall will completely overwhelm the already fragile U.S. power grid. The sustained explosive growth of the AI industry is posing the ultimate challenge to the U.S. power grid, while the inherent difficulties in grid infrastructure make this challenge difficult to address, potentially giving rise to a fragmented future of "power folding." The electricity consumption of AI has already permeated everyday applications; for example, the power used by ChatGPT for each conversation is enough to boil a kettle of water. It is predicted that by 2030, the electricity shortfall in the United States due to AI will reach as high as Giva. This shortfall will completely overwhelm the already fragile U.S. power grid.

In the United States, the challenge facing grid infrastructure is not a funding issue, but rather a series of difficult-to-resolve institutional obstacles such as property rights and environmental litigation. For example, the average approval time for building an interstate transmission line takes up to By the year. This lengthy approval process makes grid upgrades simply unable to keep pace with the growth rate of AI's electricity demand. Faced with the public grid's inability to provide sufficient support, tech giants like Microsoft and Amazon have begun seeking alternative solutions—Building a "Noah's Ark", which involves constructing dedicated independent energy systems such as private nuclear power plants.

The future of the United States may present such a scenario: tech giants, under the protection of their own nuclear power plants, enjoy a hegemony in computing power and continue to advance their development, while ordinary citizens are left to rely on aging and fragile public power grids, shivering in extreme weather such as blizzards. This "electricity divide" is not the result of market forces but an inevitable outcome of capital's pursuit of profit. The bridge of electricity connecting ordinary people and tech giants has been dismantled by capitalists themselves.

Summarize

The U.S. power grid system is facing a deep structural crisis, and the booming industry is becoming the "last straw" that could break it. The root of this crisis lies in the "business" logic of fully commodifying electricity in the United States. Under this dominant logic, the U.S. power grid has gradually fallen into multiple dead ends, including aging equipment, broken supply chains, artificially created scarcity for profit, and unpredictable policies. When this "electricity-devouring giant" emerges, the already outdated and fragile public grid is unable to bear its exponentially growing electricity demand. Moreover, the institutional obstacles facing grid infrastructure make it difficult to resolve this dilemma through short-term upgrades. Ultimately, American society may head toward a divided future of "electricity folding": tech giants rely on private energy systems to form isolated islands, continuing to dominate computing power, while ordinary people are trapped in a fragile and expensive public grid, suffering from energy shortages and soaring prices. This outcome profoundly reveals the inherent flaws and fatal shortcomings of the U.S. development logic, which prioritizes maximizing capital returns, in addressing the significant challenge of meeting the electricity demands of the era.