Dive Brief:
- Seven lawmakers led by Sen. Elizabeth Warren, D-Mass., have requested the Electric Reliability Council of Texas for knowledge on the power consumption of Bitcoin miners, together with what impact the cryptomining sector could also be having on power prices to native households and companies.
- In specific, Warren’s Oct. 12 letter seeks information on Bitcoin miners’ participation in ERCOT demand response packages that pay giant customers to cut back power consumption in occasions of grid stress. These “subsidies” to miners “feed back into the worsening climate crisis,” based on the lawmakers.
- Texas might host as much as 20% of the world’s cryptomining computing power worldwide by the top of subsequent 12 months, by some estimates. Miners say their power use will help preserve the grid dependable as a result of it’s a versatile load that acts like a demand facet battery.
Dive Insight:
Despite a fast slide in Bitcoin costs this 12 months, ERCOT officers say curiosity in connecting to the Texas grid has continued to rise.
As of August there have been 33 GW of crypto mining hundreds wanting to connect with the grid, based on ERCOT. That determine has nearly doubled since April, when it was simply 17 GW, the grid operator stated. Bitcoin completed April buying and selling north of $37,000 and closed out August at round $20,000.
While there are dozens of gigawatts of crypto load focused on connecting to ERCOT, the grid operator famous in an e mail that at present there are solely “an estimated few hundred MW currently operational.”
The determine is rising. “Texas Bitcoin miners are bringing hundreds of direct jobs and thousands of indirect jobs to rural communities across the state as well as paying tens of millions of dollars in state and local taxes,” the Texas Blockchain Council, which advocates for the business, said in a response to Warren’s letter.
The group stated Texas miners curtailed over 50,000 MWh in July, in response to report warmth and power demand on the grid.
Bitcoin mining “soaks up excess power capacity during times of low demand and turns off on hot summer days when Texans use more energy,” Texas Blockchain Council President Lee Bratcher stated in a press release.
Providing companies again to the electrical grid can generate as much as 10% of a mine’s income. And ERCOT has confirmed the miners “respond during grid events by rapidly reducing their electric use,” together with serving to to make further power out there throughout Winter Storm Uri.
But Warren and the opposite lawmakers say asking ratepayers to fund demand response funds to crypto miners is unfair, and the incentives to cut back power demand “contribute to a larger issue of having consumers, rather than industries with outsized electricity demand like cryptominers, bear the costs of maintaining the electricity grid.”
Demand response funds might attain $170 million yearly within the coming years, based on the letter. “These subsidies to cryptominers also feed back into the worsening climate crisis,” the lawmakers stated.
The letter requested ERCOT to offer knowledge on:
- the electrical energy consumption of the Texas cryptomining business in 2022, together with what number of tons of carbon dioxide emissions it produced;
- which cryptomining corporations have signed power curtailment agreements with ERCOT;
- how a lot miners are paid hourly to curtail their power consumption;
- and the common price of electrical energy to customers throughout occasions when crypto miners are being paid to curtail.
“The climate change that cryptomining is contributing to will further exacerbate extreme weather, creating a feedback loop in which energy demand more frequently exceeds supply, causing further strain on electrical grids and potentially resulting in more payouts to those same cryptomining companies,” the lawmakers advised ERCOT.
ERCOT officers say they’ve acquired Warren’s letter and could have a response within the coming weeks.
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