Editorial comment
If the world’s economies are to continue pushing for digitalisation, then our global energy appetite is going to rapidly increase. Electricity grids are buckling under the weight of accommodating AI-driven computing power demands, not to mention bitcoin mining booms and the ever-expanding data centre sprawl that is cropping up in once-sleepy corners of the grid. For the pipeline sector, this is an emerging opportunity.
Register for free »
Get started now for absolutely FREE, no credit card required.
Electricity blackouts are making headlines: in April, a major power blackout occurred across the Iberian Peninsula, affecting mainland Portugal and some of Spain for about 10 hours. The diagnosis pointed to a problem in the synchronisation of the power grid: The Conversation described it as “a perfect storm of poor grid management and inadequate connections of solar facilities to the grid, as well as other unknown faults”.1 At around midday on 28 April, most of Spain’s energy demand was being covered by renewable sources (solar and wind, as is usual at this time of the year), and nuclear plants were operating at half their usual capacity (as planned) to counteract high operating costs. A sudden drop in the Iberian electricity grid was registered just after 12:30. Here’s the breakdown: fluctuations were observed in the grid and there was a spike in wind power generation; France suddenly stopped importing electricity from Spain (likely because it had detected a problem in the peninsular grid); the few operating nuclear power plants received an overload signal and were shut down; then thousands of solar facilities were switched off automatically. The normal balance of supply and demand could not be restored, and the blackout ensued.
The incident served as a reminder that even grids flush with renewables are vulnerable without adequate storage, coordination, and backup power, especially in an era of unpredictable, tech-driven demand surges.
The Texas Observer reported recently on the energy drain of the digital boom, outlining Bitcoin mining’s voracious energy use and its impact on the grid in Texas, and beyond.2 The most famous of cryptocurrencies is reported to be rallying, which further drives the mining operations, placing more strain on the system.
ICF’s latest electricity report underscores this trend, showing how data centres and crypto operations could account for disproportionate spikes in regional demand.3
It’s a crisis, but also a crossroads. And the pipeline sector is uniquely positioned to step in as both a stabiliser and enabler in this situation. In an article in the May 2025 issue of World Pipelines, Black & Veatch discussed how to shore up infrastructure resilience, explaining how natural gas midstream operators are helping power AI’s energy revolution, since gas offers a reliable, scalable and cost-effective fuel source to power generators. Expanding pipeline networks to accommodate data centre clusters makes geographical sense.
Private equity firms such as I Squared Capital are interested in assets that serve surging digital demand. Their investment in the Matterhorn Express Pipeline in May (described as critical to AI growth hubs) underlines the evolving interplay between traditional pipelines and the next-gen energy landscape. “This investment exemplifies our strategy of acquiring critical infrastructure assets that support the major re-industrialisation themes we see in the US economy today,” said Gautam Bhandari, Global Chief Investment Officer and Managing Partner of I Squared Capital.
Oil and gas pipelines can do it all: power generators, serve LNG terminals, and feed energy-hungry industrial and digital economies. So the pipeline sector can no longer view digital demand as someone else’s problem. There are opportunities here to collaborate with renewable providers; focus on smarter pipeline routing, and monitoring; invest in hybrid infrastructure (hydrogen, CCS); and carry us into the future of powering modern life.
- Spain & Portugal Blackouts - The Conversation
- The Crypto Racket - Texas Observer
- Impact of Rapid Demand Growth in the US - ICF
