Bitcoin Miners Shut Off Rigs as Texas Power Grid Nears Brink




  • In Business
  • 2022-07-11 20:28:33Z
  • By Bloomberg
 

(Bloomberg) -- Nearly all industrial scale Bitcoin miners in Texas have shut off their machines as the companies brace for a heat wave that is expected to push the state's power grid near its breaking point.

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Miners such as Riot Blockchain Inc., Argo Blockchain Plc and Core Scientific Inc., who operate millions of energy-intensive computers to secure the Bitcoin blockchain network and earn rewards in the token, flocked to the Lone Star State thanks to its low energy costs and liberal regulations on crypto mining. The state has become one of the largest crypto-mining hubs by computing power in the world.

"There are over 1,000 megawatts worth of Bitcoin mining load that responded to ERCOTs conservation request by turning off their machines to conserve energy for the grid." Lee Bratcher, president of Texas Blockchain Association told Bloomberg in an email response. "This represents nearly all industrial scale Bitcoin mining load in Texas and allows for over 1% of total grid capacity to be pushed back onto the grid for retail and commercial use."

Miners may see a drop in profitability as the heat wave keeps their machines off by sending energy prices soaring and further stressing the state's power grid. The miners are already struggling to repay debt and raise additional capital with Bitcoin prices in sharp decline. Shares of public miners have tumbled about 75% this year.

The all-time peak record for energy usage was set Friday with 78,206 megawatts, breaking the previous unofficial all-time peak of 77,460 megawatts that occurred on July 5, according to data from the state's power operator Electric Reliability Council of Texas. The operator has been working with Bitcoin miners, who are required to turn off their mining machines when the state faces energy shortages.

While Texas is likely to face more energy shortages in the future, ERCOT expects crypto miners to increase electricity demand by up to six gigawatts by mid-2023, more than enough to power every home in Houston.

"Currently, 100% of the machines located in Texas have been powered off to provide support for the ERCOT grid," Core Scientific CEO Mike Levitt said. "In troubled situations including the current Texas heat event, we have been curtailing power and will continue to curtail power as needed." The company operates in six states, with less than 15% of its production located in Texas, he said.

Riot is participating in ERCOT's Four Coincident Peak program, in which the company's Whinstone Facility located in Rockdale, Texas, will curtail energy consumption when called on during the four summer months of peak energy demand, the miner said in an email to Bloomberg.

(Adds comment from Core Scientific and Riot in the final two paragraphs.)

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©2022 Bloomberg L.P.

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