If you listen to chip manufacturers, tech giants, and crypto evangelists, we have entered a golden age of ‘smart’ energy. AI data centers are aiding decarbonization, electric vehicles are stabilizing the grid, and Bitcoin miners are saving remote hydropower plants. They are all, of course, part of the solution. And the result is that, ultimately, ordinary people end up paying more for electricity.
The problem is that the same story repeats itself every time a new energy-hungry technology emerges. First, we get the promise of a revolution, and then the bills arrive. This time, those bills come in the form of higher electricity prices, accelerated concrete infrastructure development, and an even greater gap between the ‘energy elite’ and everyone else.
At the same time, a new analysis by Morningstar (Morningstar’s Electrification Observer) coldly reminds us that Europe, despite all the hype, is dragging its feet towards 2030. The continent is on track to electrify only about 25 percent of total energy consumption, instead of the approximately 32 percent needed to meet existing climate goals. If this remains the case, emissions would fall by about 43 percent by 2030 compared to 1990, which is far from the politically promised 55 percent. In short, the transition is too expensive to stop and too slow to deliver the results that politics promises.
Whoever has the power buys megawatts
AI data centers, giga battery factories, large industrial complexes, AI factories, they all share one common trait. When they come to a city or region, they do not ask whether there will be enough electricity for everyone. They hoard power in advance, often at privileged prices, subsidies, and political support. Local residents and small businesses then ‘adapt,’ as noted by Morningstar in its analysis.
For example, Virginia has the largest cluster of data centers in the world and is already a laboratory of the future, so they are experiencing ‘future problems.’ A congested grid, new power lines, substations, and pressure on local communities that pay for infrastructure work, often without understanding who and why consumes so much electricity. Data centers employ significantly fewer people per megawatt than any traditional industry.
The same dynamics are evident in Europe. A large cloud provider enters negotiations, locks in long-term contracts for renewable sources, takes the best location with available capacity on the grid, and the rest of the system, from local households to small producers, gets a roll of restrictions, complications in connection, and higher tariffs. On paper, this is recorded as a ‘green transition,’ but in reality, it resembles a classic concentration of energy and market power.
AI heat factories: real projects or PR stunts
One of the favorite PR stories claims that data centers generate huge amounts of heat that can be used for heating buildings, pools, or entire neighborhoods. Technically, this is true. In practice, most of the waste heat still goes into the air, and serious projects for integration into heating networks remain rare. Cities that already have developed heating networks can benefit, but even then, the costs of infrastructure, heat exchangers, pipelines, and system adjustments often end up on the public bill. The data center operator gets labeled as ‘sustainable’ and a better ESG rating, while the city gets a new complex of pipes and additional dependence on a single consumer.
Globally, the electricity consumption of data centers is around 1.5 percent of total electricity consumption, and the International Energy Agency expects it to more than double by 2030, to about 945 TWh annually.
Morningstar estimates that in Europe, data center consumption will grow by about 15 percent annually and reach approximately 182 TWh by 2030. That is electricity that someone has to pay for, and the grid has to swallow.
If the heat is indeed utilized, that is a plus. But the key question is whether the project was designed from the outset to bring public benefit or if the heat is only subsequently used as a green layer over an investment that would have happened anyway. For now, in most cases, we are much closer to the latter scenario.
Bitcoin: the perfect tool or the perfect parasite
Bitcoin advocates like to say that the network consumes less electricity than the global financial system, that it increasingly uses renewable sources, and that it saves ‘fugitive energy,’ i.e., surpluses from hydropower plants, wind farms, and gas fields. All of this is partially true, but also very selective. Indeed, mining can be connected to cheap surpluses and help small power plants maintain their business model. Some projects use waste gas that would otherwise be burned, so the overall carbon impact is even positive compared to the status quo. However, nothing in the protocol prevents miners from connecting to the dirtiest source if it is cheap enough.
In countries with weak regulation, we have seen both extremes. Farms that operate on surpluses and save marginal projects, but also those that consume electricity originally intended for local industry and households. For less developed countries, this is a particularly dangerous scenario as foreign investors come with the promise of ‘monetizing surpluses’ and leave with a budget that depends on the volatile price of Bitcoin and a network tailored to their needs, not the needs of the local community.
When the price crashes, the farm shuts down. Who is left with the infrastructure, debts, and damaged trust? Certainly not the miners.
Electric vehicles, walking batteries
The narrative around electric vehicles is even more seductive. Cars are, the story goes, ‘batteries on wheels’ that will save the grid, charge when electricity is cheap and green, and return energy to the grid when it is expensive. The technology for Vehicle-to-Grid exists, pilot projects are underway, and the calculations look promising. However, when you look at actual user behavior, the picture is less than ideal. Most people charge their cars when it is convenient for them, not when it is best for the system. If there are no clear price signals and smart chargers, EV owners will connect just when everyone else turns on the air conditioning, stove, and TV.
The numbers are not as encouraging as the PR. According to Morningstar, by 2030, battery electric vehicles could account for about 45 percent of new car sales in Europe, but the total electrification of road transport will only reach about 5 percent of final energy consumption, which means only about a 5 percent reduction in emissions from road transport.
An additional problem is that car manufacturers are not thrilled about the idea of batteries being drained for additional cycles due to discharging into the grid, regulators are just setting the rules of responsibility, and grid operators are learning on the go how to manage millions of small, dispersed batteries. Without clear and fair models for sharing costs and benefits, who pays for battery degradation, who takes the risk, who determines the price of energy going from the car to the grid, V2G remains a nice demo, not a mass practice.
Expensive electricity, slow transition
While the tech sector promises a symbiotic future, the math for Europe looks tough. Electricity for households and industry is still significantly more expensive than in the US and China, and the gap has not closed even after the worst hit of the energy crisis. Morningstar expects that electricity consumption in the EU will grow by only about 1.1 percent annually by 2030, barely above pre-pandemic levels, while in the US it will grow faster.
The structural reasons are well known. High grid fees, taxes, a fragmented market, and a slow pace of building grid infrastructure. The result is a combination that kills both industry and households. The chemical sector in the EU is already closing capacities or relocating across the Atlantic, and some analyses predict a double-digit decline in production in the coming years precisely due to energy prices.
Energy poverty 2.0
In developed countries, we have a paradox. Namely, we have never had more kilowatt-hours from renewable sources, never more digitization, and never a higher number of households that cannot pay their electricity or heating bills. Energy poverty is not disappearing; it is changing shape.
For example, heat pumps are a good example. The EU has set itself a goal of about 60 million heat pumps by 2030, but Morningstar estimates that it will not exceed 39 million. Residential electrification of homes will rise, according to the same analysis, from about 26 to 28 percent by the end of the decade, with a reduction in emissions in that segment of about 1.7 percent annually.
For those who cannot afford a heat pump, insulation, rooftop solar, or an electric car, the story of the transition looks very simple. Bills are rising, and access to modern technologies remains reserved for those with capital and credit ratings.
If the additional consumption of AI, EVs, and crypto is transferred to the grid without smart design, the most vulnerable will again pay the highest price. Not only through higher tariffs but also through fees for renewable projects that are not in their backyard, and through investments in the grid primarily motivated by the needs of large players. In an extreme scenario, you get an energy caste, corporations with direct PPA contracts, their own batteries and aggregators, and citizens on a classic tariff as the ‘remainder’ of the system that serves to balance, with minimal control and influence over decisions.
Green infrastructure, old logic of power
Behind all this lies not only technology but also politics. Who decides where new power lines, substations, wind farms, and solar complexes will be built? Who has access to cheap electricity, and who pays a higher tariff? Who sits at the table when laws are written, and who gets notified only when the public discussion has formally ended?
AI data centers, EV production, and Bitcoin mining have become the latest players in the old game of lobbying and regulatory capture. At the same time, we are witnessing the dilution or slowing down of certain ESG standards in the EU, the postponement of the implementation of stricter climate rules, and the push for rapid ‘digital’ reforms that often benefit large platforms more than citizens. All of this is justified by the need for ‘competitiveness’ and ‘speed of innovation.’
The worst-case scenario is not a technical collapse of the grid, although that is not excluded if unrealistic deadlines are enforced without investment in the grid. The worst-case scenario is a quiet turn in which decisions about who has access to energy and under what conditions are increasingly made behind closed doors, under the guise of complexity and the alleged inevitability of technological progress.
Under what conditions
AI data centers, electric vehicles, and part of the crypto industry will not disappear. The question is no longer ‘for or against,’ but ‘under what conditions.’
A responsible version of this transition would look significantly different from what we see today in many markets. Large consumers would not connect to the grid without firm commitments to flexibility, participation in system balancing, and measurable local benefits, from utilizing heat to lower tariffs or direct investments in the community. EVs would not just be private gadgets but part of public energy infrastructure, with models rewarding owners who actually let their batteries play when the system is under the most stress.
Crypto mining could gain access to electricity only where it truly utilizes surpluses or helps finance a grid that will later serve others, and that under strict, transparent rules.
Without that, the nice story of a ‘symbiotic’ energy future remains just another layer of green cellophane over the old story where profit is privatized, and risks and costs remain for everyone else.
The key question for states, cities, and businesses is not whether AI, EVs, and Bitcoin will develop; they certainly will. The question is whether we will use them as a tool for a more democratic, resilient energy future or as yet another way to concentrate power over the most important infrastructure of modern society, which is access to cheap, reliable electricity.
The answer cannot be given by algorithms, miners, or batteries. It will be given by regulators, politics, and the public, if they realize in time that this race is not only taking place in data centers and blockchains but also on electricity bills.
