After China’s Bitcoin (BTC) mining ban in May this year, the US became the biggest Bitcoin mining hub in the world. Most of the large Bitcoin mining farms in China either shut down completely or relocated to the US, Kazakhstan, and Russia to continue their mining operations. The US has seen the largest influx of Bitcoin miners especially in cities like Texas. However, what was seen as a great opportunity for the city now seems to be turning into a problem.
Texas is quite popular among crypto miners because of its business-centered regulations and cheap cost of electricity. The majority of the big crypto mining cooperations are opening up new subsidies and increasing their existing capacity with more mining rigs. This has put a severe concern among people whether the electric grid would be able to absorb the heavy load.
— Greg Abbott (@GregAbbott_TX) May 5, 2021
Michelle Michot Foss, a fellow in the Center for Energy Studies at Rice University’s Baker Institute called Bitcoin miners “energy hogs.” He explained that even though the severe growth of crypto mining in the wake of the China ban was anticipated but nobody took note of the “sensitivity of the system to break downs.”
“They are energy hogs, absolutely. I don’t think that in Texas, we’ve actually done a bad job in terms of anticipating growth, I think where we’ve missed it is in understanding the sensitivity of the system to break downs.” Michot Foss said. “And when you’ve got much larger load building at the same time, then the chance for disruptions is there.”
Texas Electricity Council is Keeping a Tight Watch
The Electric Reliability Council of Texas (ERCOT) is monitoring the growing pace of crypto mining in the state and its potential impact on the power grid.
“ERCOT is monitoring cryptomining developments and evaluating the potential impacts on the grid,” an ERCOT spokesperson said. “It is fair to say that these crypto loads can have impacts just like any large load.”
The power grid issues won’t be a first of its kind, in fact, countries that have legalized crypto mining have also faced similar problems be it Iran or Kazakhstan. Iran had suspended crypto mining operations for five months in the Summer amid growing blackouts in the country. However, it’s mostly illegal crypto mining that takes the main toll on power consumption as they are unaccounted for.