Kilowatt Madness – Paul Krugman

Soaring electricity prices, driven largely by surging demand from AI data centers and crypto mining, are contributing to stagflation—contradicting promises to cut energy costs in half. Data from the Department of Energy shows that renewables are not to blame for rising prices, while policies blocking renewable expansion and rolling back efficiency standards are making the crisis worse. Texas has already passed a law giving its grid operator the power to disconnect data centers during shortages. Rising electricity costs—estimated at about 2% of GDP when including business pass-through—threaten both household budgets and broader economic growth, and could halt the AI investment boom.