Texas plans bitcoin power grid all

“They turned the switch on and all of the sudden, we realize—Holy smokes!—where did this electricity usage come from?” said Mayor Christopher Rosenquest.

Another overlooked part of mining: Its energy intensity will continue to rise because the system is designed to make it harder to mine each incremental coin. Miners are evolving from small “mom and pops” adding connections to their basements to massive servers racked in large air-conditioned warehouses, using increasingly more power.

Ed Hirs, an energy fellow at the University of Houston, warns that Texas and crypto aren’t a good match.

“Who is the beneficiary of Bitcoin mining? It doesn’t provide employment, doesn’t pay taxes,” he said.

Texas plans to become the bitcoin capital vulnerable power grid and all

Other states can usually share energy with each other in an emergency.

The state has so far avoided large power outages after the Electric Reliability Council of Texas, or ERCOT, asked Texans to voluntarily reduce their power consumption on Monday. Back in February 2021, a deadly cold snap caused massive outages across the state. Stifling temperatures are forecast to continue throughout the week in Texas, so its power grid isn’t out of the woods yet.

This isn’t the first time that Bitcoin miners in the state have responded to a power crunch during high temperatures, and it probably won’t be the last.

Riot Blockchain, a Bitcoin mining company, curtailed 8,648 megawatt-hours of energy consumption throughout June, Riot marketing coordinator Alexis Brock said in an email to The Verge.

Hittinger.

“So it’s not exactly charity, as some people might frame it,” Hittinger says. Nor is it a new service for the grid. Historically, other industries — from chemical processing to manufacturing — have played similar roles in helping to stabilize the grid by powering down when needed. That crypto companies curtailed mining in Texas this week is a sign that the industry is capable of providing the same service, Hittinger says, if there are the right economic incentives.

“Just in efforts to support the citizens of Texas, that’s always going to be our priority,” says Alexis Brock, marketing coordinator at Bitcoin mining company Riot Blockchain, when asked whether the company planned to continue conserving energy during times of peak demand in the future.

If there’s one thing Texas has in large amounts, if there’s one thing Texas knows about, deeply, it is energy.”

But Texas saw its power grid overloaded during a deadly winter storm earlier this year, raising questions about whether the grid can handle major growth in such an energy-intensive industry.

Industry advocates describe a symbiotic relationship between bitcoin miners and the Electric Reliability Council of Texas, the state’s grid operator. They suggest the proliferation of blockchain technology would help stabilize a Texas power grid that has increasingly come under fire for failures during a storm that left an estimated 70% of Texans without power for an average of 42 hours.

The increased demand brought by mining could incentivize new sources of power to come online, they say.

Our machines’ power danced, ramped up and down based on what Ercot told our software to do, and what it did is it helped stabilize the grid while other generation came on,” said Chad Everett Harris, CEO of the facility. Harris said it voluntarily shut down on Feb. 11 as temperatures plunged across Texas, three days before Ercot started cutting of power to save the grid.

In fact, miners realize most of their appeal right now is their ability to do good—curtail output to help the grid even at the risk of their own profits—otherwise they lose the argument that they’re aiding energy transition, Dixon of Voltus said. That’s why he thinks companies will do the right thing, unregulated or not.

“It is the elephant in the room,” he said.

The bitcoin miners were able to push over 1,000 [megawatts] back into the grid for ten-hour plus periods multiple times during the week.”

While that ordinarily may not seem like much, it can matter during times of peak demand, said Joshua D. Rhodes, a research associate with the Webber Energy Group at the University of Texas at Austin. When an electricity grid is “within a few thousand megawatts of how much supply we have and how much demand we have, a 1% change can make a big difference,” said Rhodes, who has consulted for cryptocurrency mining companies.

“When we’re running out of supply, reducing demand is very helpful in that context,” he said.

But, Rhodes noted, the action wasn’t a “silver bullet” for electricity concerns.
“I don’t think it single-handedly saved” the grid, he said.

Riot operates what it claims is the largest Bitcoin mining facility in North America in Rockdale, Texas, and it powered off completely for at least 10 hours a day for several days over the past week.

That hasn’t eased concerns that Jackie Sawicky has about another massive crypto mine Riot plans to build in Navarro County, Texas, where she lives. “We do NOT want this enormous burden on our already fragile infrastructure,” reads a petition Sawicky started to stop its construction. Once completed, the new facility is expected to have the capacity to use 1 gigawatt of electricity.

“They talk about stabilizing the grid,” Sawicky says to The Verge.

The price of electricity also climbs when the power supply is limited.

“It’s good to know that they can and there are times when they’re willing to do so,” Rhodes said of miners voluntarily pausing their operations. “But it wasn’t completely altruistic.”

With extreme weather events becoming increasingly common, asking cryptocurrency operations to shut down for certain periods might be viewed by some as a possible solution to help avoid overtaxing electricity grids.

“It could become an expectation in some people’s minds,” Rhodes said. “But I think until it is actually formalized into a program and someone signs a contract, I am hesitant to rely on it.”

It’s important, he said, to find ways to make shutting down worth it to companies.

The commonly used method of extracting coins involves huge amounts of computing power. Networks of miners have to use processors to solve complex puzzles to earn coins as well as track and verify transactions — all of which consumes energy.

A 2019 study estimated that bitcoin, one of the most popular cryptocurrencies, emitted between 22 and 29 million metric tons of carbon dioxide during the previous year, according to findings published in the peer-reviewed journal Joule.

“This means that the emissions produced by bitcoin sit between the levels produced by the nations of Jordan and Sri Lanka,” the study’s authors wrote.

Meanwhile, extreme weather events, largely driven by climate change, have continued to strain Texas’s power system, which runs independently of the national grid.

In May, Musk announced Tesla had halted purchases of its vehicles with bitcoin, citing concerns around the fossil fuels used to mine it.

Bratcher suggested Texas’ greener energy options make mining in the state more sustainable than in China. While he said he is cognizant of the environmental impact, he said that bitcoin mining in Texas relies 30% on renewable energy. Twenty percent of the state’s energy comes from wind power.
Less than 15% of bitcoin mining in the state uses coal, he added.

But those numbers aren’t good enough, according to Benjamin A. Jones, a University of New Mexico economics professor who has researched cryptocurrency mining’s environmental impact. He pointed to a September 2020 University of Cambridge study, which estimated 39% of mining is powered by renewable energy.

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