Bitcoin Mining Increasing: The mining sector is no exception to the rule that everything is bigger in Texas. The Lone Star State is now among the world’s top locations for Bitcoin mining. The mining departure from China was followed by a stampede of miners to Texas. Since Texas has so many land, wind, and solar power plants, it is no surprise that many Bitcoin miners have set up shop there.
According to a recent blog post by the Texas Blockchain Council, more than 30 percent of the United States hash rate is located in Texas. As mentioned in the post, five of the top 10 Bitcoin mines in the United States are in Texas. The United States also ranks first globally for its proportion of the Bitcoin network’s total hash rate, as the Texas Blockchain Council pointed out. As a result, Texas is now widely recognized as the world’s leading Bitcoin mining capital.
Texas Media Says Bitcoin Mining Increases Power Demand
Interestingly, Texas has emerged as a center for Bitcoin mining; nevertheless, media publications in the Lone Star State are accusing miners of driving up electricity bills. The present power consumption in Texas is approximately 85 gigawatts (GW), according to an article published in The Austin Chronicle last week. According to the article, this figure is predicted to quadruple by 2030, reaching 150 GW.
The article claims that the increasing power demand is due to Bitcoin mining. The author predicts that “the increasing number of crypto mining. Operations and data centers in the Permian Basin” will account for more than half of the additional demand. According to another opinion piece published in The Houston Chronicle, Bitcoin mining could cause a power outage in Texas.
Bitcoin Mining Isn’t Driving Texas Power Demand
Bitcoin Mining Increasing is divisive in Texas, but professionals disagree that it’s driving up electricity prices. Cryptonews spoke with Lee Bratcher, president and founder of the Texas Blockchain Council. Who stated that ERCOT’s prediction that Texas’s energy consumption will exceed 150 GWs by 2030 is biased. Bratcher brought attention to the fact that, according to ERCOT, 2902 MWs of demand are presently accounted for by Bitcoin mining in Texas.
“We have noticed a consistent rise of approximately 90 MW per month for the previous two years,” he emphasized. “We anticipate that the total quantity of bitcoin mining will plateau at approximately 5,000 MWs by the decade’s end due to capacity constraints and competition from AI data centers. Declining profitability, and the high cost of building large-scale bitcoin mining data centers.”
These figures led Bratcher to estimate that Bitcoin mining will contribute about 3% to the increase in load from 2018 to 2030. He observed that, due to the persistence of abandoned mining operations in the interconnection queue. ERCOT asserts that Bitcoin miners will be responsible for 20% of the increase in demand during that period. Because of this, ERCOT’s predictions are now off.
ERCOT Says Crypto Mining Dominates Flexible Loads
According to Trudi Webster, Head of ERCOT Communications, who spoke with Crypto News, ERCOT does not provide details about the power use of individual facilities. According to Webster, the crypto mining business is currently the biggest. Regarding large flexible loads (LFLs) in Texas looking to join the ERCOT system, for this exact reason, media in Texas may be pointing fingers at Bitcoin Mining Increasing for the state’s rising electricity bills.
According to Webster, the Large Flexible Load Task Force (LFLTF) was formed by ERCOT to determine how to handle the logistical, financial, and operational consequences of interconnected big loads in the ERCOT area. The LFLTF proposes that LFLs be either co-located loads exceeding 20 MWs or stand-alone loads exceeding 75 MWs. Webster stated that the Large Load Interconnection Queue status update from the LFLTF conference on June 3, 2024, is current.
“This report does not specifically break down crypto mining or data operations,” Webster stated, referring to ERCOT. Crypto mining and artificial intelligence data center load together account for nearly half of the new significant load growth anticipated in Texas by 2030, according to ERCOT.
Also Read: Bitcoin Price Drops Weekly Before Fed Rate Cut, More Pain?
Texas Electricity Prices Double Despite Bitcoin Mining
Despite persistent claims to the contrary by Texas media outlets, ERCOT has never supported the idea that Bitcoin mining is driving up electricity demand. Energy expert Jamie McAvity of Ft. Stockton, Texas-based Bitcoin mining firm Cormint Data Systems told Crypto News. That power prices in Texas had doubled in the past six years. According to McAvity, the lack of additional natural gas generation in ERCOT since 2017 is the root cause of increased power rates.
According to McAvity, Bitcoin is unrelated to this. Instead, it’s related to the 40% increase in grid demand and user count. Wind and solar power have completely matched the increased demand for electricity even though the amount of power generated on the grid has increased by that amount. Wind and solar power are lovely, inexpensive energy sources. Still, as McAvity pointed out, there can be severe shortages in a grid that depends on these sources when the weather is terrible.
He observed that the 70 most costly hours of power distribution were responsible for 26% of the overall yearly cost. Power rates 2023 were relatively low at $.037/KWh for 99.2% of the year, ranking among the nation’s cheapest. In contrast, prices averaged a whopping $1.63/KWh during. The most costly is 0.8% of the year, significantly more than the national average. During such times of high pricing and electrical scarcity, Bitcoin mining did not occur, according to McAvity.
According to McAvity’s observation, the day of September 6, 2023, was not associated with any Bitcoin mining loads. Back then, power was in high demand, and due to the extreme heat, no Bitcoin mining took place. McAvity reminded Texan government leaders that 7500 MW of natural gas peaker plants would solve the problem. After construction, prices will drop, but getting there will take some time. Meanwhile, he pleaded with the audience not to make Bitcoin the villain.
Bitcoin Miners Help Stabilize Texas Power Grid
Also, by reducing activity during periods of high performance, Bitcoin Mining Increasing aid in power grid stability in Texas. Due to their past performance and desire to conserve electricity during peak demand, Bratcher argues that Bitcoin miners have a more muted or subdued impact on price increases. Then the average industrial or commercial load.” Bitcoin miners raise prices at night and when demand is low, which decreases prices when they scale down during strong demand, Bratcher said.
Ross Gan, Bitdeer Technologies Group’s chief communications officer and a Texas Bitcoin miner, said Crypto News, an academic study showed. A voluntary restriction could limit Bitcoin mining load increases, according to 2023. Gan said Bitcoin miners may improve reliability without significant economic losses by reducing power demand by 200 hours per year.
Gan further said that the researchers recommended that grid operators take advantage. Bitcoin miners demand flexibility to improve grid stability. To benefit everyone, new market arrangements may be necessary. He praised ERCOT’s involvement in the Large Flexible Load Task Force, calling it a positive sign of their efforts. “To ease seasonal supply constraints at scale. Unlike large industrial electricity users with firm electrical demand, Bitdeer and other Bitcoin miners can curtail power demand accordingly.”
