Crypto Mining: Texas Firms Feel Heat Of Grid Stressbit2main
The operator of Texas’ electrical power grid warned Monday of possible rolling blackouts and has called for public energy conservation. The Lone Star State has been setting new temperature highs since June as a heat wave drives record demand for power. ERCOT — the Electric Reliability Council of Texas — expects power demand to surpass a record 79 gigawatts Monday. That could spell trouble for upward of 27 Texas crypto mining companies.
Texas Crypto Mining
Texas has quickly become one of the biggest crypto mining hubs in the country, thanks to its cheap electricity, expanding renewable options, legislative backing and relaxed regulatory environment. It was the second-biggest contributor to U.S. BTC production in November, according to the Cambridge Bitcoin Electricity Consumption Index. Its 11.22% hash rate share — the mining rate for crypto transactions — trailed only Georgia’s 30.67% share. Next in line, Kentucky came in at 10.93% and New York at 9.77%, rounding out the top four states.
Texas Governor Greg Abbott and Senator Ted Cruz have lauded blockchain technology in the past. At a Heritage Foundation event in May, Cruz stated, “I want Texas to be the oasis on planet Earth for bitcoin and crypto.” In addition, he’s a personal investor, and bought $15,001-$50,000 of Bitcoin in January, according to a financial disclosure. And the nonprofit Texas Blockchain Council, made up of crypto companies and experts, was formed to advance policy initiatives for the technology.
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Fort Worth and Rockdale have become massive mining centers thanks to the state’s push. Rockdale is home to the Riot Blockchain (RIOT) Whitestone facility, has the highest bitcoin mining capacity of any facility in North America. The site has a total power consumption capacity of 750 MW. It’s expanding to add 400 MW of capacity, a project set for completion this summer.
By 2023, ERCOT predicts that crypto mining in Texas will increase the state’s electricity demand by 6 gigawatts. The equivalent of what it takes to power Houston’s 1.2 million homes.
Is Crypto A Grid Stressor Or Savior?
However, mining executives and the Texas Blockchain Council claim that mining can help mitigate current grid stress. “The Bitcoin mining industry can also increase grid resilience as it acts as a manageable load,” Lee Bratcher, president of the TBC said in response to conservation notices in May. “Bitcoin miners are able to turn off in a matter of seconds. Making them an ideal resource for grid frequency balance and demand response.”
That sentiment was echoed by Riot CEO Jason Les in a June interview with Fox News. Their flexible mining operations can return power to the grid when needed and turn off when they have excess capacity. Compared to other energy loads that run constantly, Les said.
In addition, miners are also looking for alternative power sources, such as renewable energy or batteries, to power operations. And while industry experts say it shouldn’t have a major impact on customer utility bills, a 2021 report from the University of California Berkeley found that crypto mining operations in New York increased annual electric bills by $244 million for individuals and small businesses.
You can follow Harrison Miller for more news and updates on Twitter @IBD_Harrison
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