Cryptocurrency mining requires huge amounts of electricity, raising concerns not only about the ability of Texas’ beleaguered grid to meet growing demand as more miners are expected to flock to the state, but also about the wider potential environmental impact of the industry.
“Over 95% of industrial-scale bitcoin mines reduced their power consumption during peak periods in the past week,” Lee Bratcher, president of the Texas Blockchain Council, wrote in an email to Washington. Post. “Bitcoin miners were able to push over 1,000 [megawatts] in the grid for more than ten hours several times a week.
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While that doesn’t usually seem like much, it can matter during peak demand periods, said Joshua D. Rhodes, a research associate at the Webber Energy Group at the University of Texas at Austin. When a power grid is “a few thousand megawatts away from supply and demand, a 1% change can make a big difference,” said Rhodes, who has consulted with cryptocurrency mining companies.
“When we run out of supply, demand reduction is very helpful in that context,” he said.
But, Rhodes noted, the action was not a “silver bullet” for the electricity problems. “I don’t think he single-handedly saved” the grid, he said. “This was part of a series of energy consumer-wide actions that helped maintain grid stability.”
In recent years, Texas has become one of the favorite places for crypto entrepreneurs. To date, about 10 facilities have connected and there are over “27 gigawatts of crypto load working on the interconnect over the next four years,” ERCOT said in a statement to The Washington Post.
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Around the world, the huge carbon footprint of the cryptocurrency industry is coming under increasing scrutiny. The commonly used method of mining coins involves huge amounts of computing power. Networks of miners must use processors to solve complex puzzles to earn coins as well as track and verify transactions, which consumes energy.
A 2019 study estimated that bitcoin, one of the most popular cryptocurrencies, emitted between 22 million and 29 million metric tons of carbon dioxide in the previous year, according to findings published in the journal. Joule peer-reviewed.
“This means that the emissions produced by bitcoin are between the levels produced by the nations of Jordan and Sri Lanka,” the study authors wrote.
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Meanwhile, extreme weather events, largely due to climate change, continued to strain Texas’ electrical system, which operates independently of the national grid. The recent heat wave was preceded by other extreme heat events as well as a record breaking heat wave in February 2021, which left millions of Texans without power at one point as temperatures plummeted to minus 2 degrees Fahrenheit in Dallas and 13 degrees in Houston.
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Amid scorching temperatures this week, which have driven demand for electricity to record highs, ERCOT has issued public calls to save energy. Wednesday’s appeal said the efforts of residents and businesses earlier in the week “helped ERCOT successfully meet record electricity demand by reducing their energy consumption by 500 MW,” or megawatts.
Although mining companies are among the companies that have been asked to voluntarily conserve energy, “it is not an obligation for them to conserve,” ERCOT said in a statement to The Post.
Bitcoin miners are “turning off both because it’s the right thing to do and because they’re incentivized by market mechanisms within ERCOT,” Bratcher wrote in an email.
Some companies have signed up for programs offered by ERCOT, which pay heavy electricity consumers not to use electricity during periods of high demand, Rhodes said. The price of electricity also rises when the power supply is limited.
“It’s good to know they can and there are times when they’re willing to,” Rhodes said of miners who voluntarily suspend operations. “But it wasn’t completely altruistic.”
With extreme weather events becoming more common, asking cryptocurrency operations to stop during certain periods could be seen by some as a possible solution to avoid overloading power grids.
“That might become an expectation in some people’s minds,” Rhodes said. “But I think until it’s formalized in a program and someone signs a contract, I’m hesitant to trust it.”
It’s important, he said, to find ways to make the shutdown worthwhile for businesses. “It’s not a good idea to rely on someone to just be a good citizen.”