Bitcoin Mining Not the Cause of Increasing Texas Power Demand, Experts Argue

Bitcoin Mining Not the Cause of Increasing Texas Power Demand, Experts Argue

Texas has emerged as a significant hub for Bitcoin mining, becoming one of the largest centers for this activity globally. The state has attracted numerous miners, especially after China’s crackdown on mining operations, due to its abundance of wind and solar power and vast land. According to a recent blog post by the Texas Blockchain Council, Texas accounts for over 30% of the U.S. hashrate, housing five of the ten largest Bitcoin mines in the country. As a result, Texas has essentially become the global capital of Bitcoin mining.

Media Outlets Blame Bitcoin Mining for Power Demand Surge

Despite Texas’s prominent role in Bitcoin mining, local media outlets are attributing the state’s increasing power demand to this industry. An article from The Austin Chronicle reported that Texas’s current power demand is around 85 gigawatts (GW) and is projected to double to 150 GW by 2030. The article suggested that Bitcoin mining is a significant factor in this increase, claiming that over 50% of the new demand would come from crypto mining operations and data centers in the Permian Basin. Similarly, The Houston Chronicle published an opinion piece warning that Bitcoin mining could potentially crash the Texas power grid.

Experts Dispute Media Claims

Industry experts, however, argue that Bitcoin mining is not the primary reason for the rising power demand in Texas. Lee Bratcher, Founder and President of the Texas Blockchain Council, challenged the Electric Reliability Council of Texas (ERCOT) estimation that Texas’s energy consumption would reach 150 GW by 2030. Bratcher noted that Bitcoin mining currently accounts for 2902 Megawatts (MW) of demand and has seen a steady increase of about 90 MW per month over the past two years. He expects Bitcoin mining demand to level off around 5,000 MW by the end of the decade, which would constitute only about 3% of the load growth from now until 2030.

Bratcher further pointed out that ERCOT’s claim that Bitcoin miners will account for 20% of the load growth is skewed because it includes many mining projects that never materialized but remain in the interconnection queue.

ERCOT’s Perspective on Large Flexible Loads

Trudi Webster, Head of ERCOT Communications, stated that ERCOT does not comment on specific facilities’ power usage but acknowledged that the crypto mining industry represents the largest share of large flexible loads (LFLs) in Texas. Webster explained that this could be why Texas media outlets are blaming Bitcoin mining for the increasing power demand. ERCOT has established the Large Flexible Load Task Force (LFLTF) to address the operational, planning, and market impacts of these large loads. Currently, about 50% of ERCOT’s estimated new large load growth by 2030 is expected to come from combined crypto mining and AI data centers.

Rising Electricity Prices: Other Factors at Play

Jamie McAvity, Energy Expert and CEO at Cormint Data Systems, highlighted that electricity costs in Texas have doubled over the past six years. He attributed this increase to the lack of new natural gas generation plants since 2017, rather than Bitcoin mining. McAvity noted that while wind and solar energy have contributed to meeting the rising demand, their intermittent nature leads to serious shortages during times when renewable sources are not producing power. He proposed the construction of 7500 MW of natural gas peaker plants to stabilize the grid and reduce electricity prices.

Bitcoin Mining’s Role in Grid Stabilization

Contrary to claims that Bitcoin mining strains the Texas power grid, industry experts argue that miners actually help stabilize it by curtailing operations during peak demand times. Bratcher mentioned that Bitcoin miners have shown a willingness to reduce their power usage during peak times, thereby having a subdued impact on price increases compared to other industrial or commercial loads. Ross Gan, Chief Communications Officer of Bitdeer Technologies Group, supported this view, citing academic research that suggests voluntary curtailment by Bitcoin miners can effectively manage load growth without major economic losses.

Gan emphasized that ERCOT’s proactive engagement through the Large Flexible Load Task Force indicates a positive approach to integrating flexible loads like Bitcoin mining into the grid. He added that Bitcoin miners’ ability to curtail power demand during peak times provides a reliability service that few other industries can match.

In conclusion, while Bitcoin mining is a growing industry in Texas, experts argue that it is not the primary driver of the state’s increasing power demand. Instead, they point to other factors, such as the lack of new natural gas plants and the rise in renewable energy sources. Moreover, Bitcoin miners are seen as playing a beneficial role in stabilizing the power grid rather than exacerbating its challenges.

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