Bitcoin miners claim they can help stabilize Texas’s vulnerable electricity grid, but they can also be a drain on utilities as they cash in on the state’s cheap energy.
“Industry advocates argue that as Bitcoin mining booms in the state, someone will come along to build more power plants,” reports Bloomberg.
“Plus, miners say their ability to quickly throttle back operations when the grid needs power will actually make the system more stable.”
But Bitcoin mines are insatiable energy consumers—two mines proposed in the jurisdiction of the Rayburn Country Electric Cooperative Inc. would each devour as much electricity as it would take to power 60,000 Texas homes, and the investment would require US$20 million to reinforce power lines and avert blackouts.
Although it’s too early to estimate how much power draw will rise from new mining, Lee Bratcher, president of the Texas Blockchain Council, says Bitcoin mines shouldn’t cost customers much because of their location in sparsely populated areas.
But ratepayers in upstate New York ultimately paid about US$250 million more in annual electricity bills after Bitcoin mines moved in, according to researchers from University of California Berkeley, while delivering a new lease on life to a fracked gas plant on the shores of Seneca Lake. They estimated in 2021 that individuals in Plattsburgh paid an extra $8 per month, while small businesses paid $12 more per month. The city ended up banning crypto mining until effective regulations were in place to offset the industry’s impacts, Bloomberg writes.
“Besides threatening to boost power bills, the dozens of Bitcoin mines proposed are also a risk to the state’s shaky power grid after a deep freeze last year left hundreds dead and pushed up prices so much that utilities were left with massive debts or bankrupted,” reports Bloomberg, adding that it falls to the Electric Reliability Council of Texas (ERCOT), the state’s grid operator, to evaluate how Bitcoin mining will affect the power system.
Upgrades will be needed because the grid “can’t handle all of this new load,” said Evan Caron, a former electricity trader in Austin who invests in energy technology. New investments in the transmission system are typically shared among ERCOT’s consumers and show up in their utility bills, Bloomberg explains. This year, the state utility expects more than $4.5 billion in transmission charges to be distributed among users, from factories to local utilities.
Utilities are also concerned miners could close up shop, leaving ratepayers to cover the costs of upgrades that may no longer be needed.
Then again, taking a risk on mining could eventually pay off in terms of grid stability, as crypto miners have pledged to shut down in times of crisis to conserve power. The biggest Bitcoin miner in Texas, Riot Blockchain, did so in February and last year, writes Bloomberg, and others, such as Compute North LLC and Bitdeer Technologies Holding Co., have committed to shutting if needed.