When a violent heat wave suffocated Texas this week and taxed the power grid with record high demand, bitcoin mining operators in the state shut down their power-hungry machines.
By restricting bitcoin, crypto miners helped Texas during the heatwave
Cryptocurrency mining requires huge amounts of electricity, raising concerns not only about whether Texas’ besieged network can keep up with sky-high demand as more miners are expected to flock to the state, but also over the industry’s broader potential environmental impact.
“Over 95% of bitcoin mines on an industrial scale reduced their power consumption during high demand times in the past week,” Lee Bratcher, president of the Texas Blockchain Council, wrote in an email to The Washington Post. “Bitcoin miners were able to squeeze over 1,000 [megawatts] back in the grid for ten hours plus periods several times during the week. “
Although it usually does not seem like much, it can be significant in times of high demand, said Joshua D. Rhodes, a research fellow at Webber Energy Group at the University of Texas at Austin. When a power grid is “within a few thousand megawatts of how much supply we have and how much demand we have, a change of 1 percent can make a big difference,” said Rhodes, who has consulted for mining companies for cryptocurrencies.
“When we run out of supply, it is very useful to reduce demand in that context,” he said.
But, Rhodes noted, the action was not a “silver bullet” for electricity problems. “I do not think it saved on its own,” the grid, he said. “It was part of a series of actions across energy consumers that helped keep the grid stable.”
In recent years, Texas has become one of the best places for crypto entrepreneurs. To date, about 10 plants have connected, and there are more than “27 gigawatts of crypto-load working on interconnection over the next four years,” ERCOT said in a statement to The Washington Post.
Around the world, the cryptocurrency industry’s massive carbon footprint has received increasing attention. The commonly used method of extracting coins involves enormous amounts of computing power. Networks of miners must use processors to solve complex puzzles to earn coins as well as track and verify transactions – all of which consume energy.
A study from 2019 estimated that bitcoin, one of the most popular cryptocurrencies, emitted between 22 and 29 million tonnes of carbon dioxide during the previous year, according to findings published in the peer-reviewed journal Joule.
“This means that the emissions produced by bitcoin are between the levels produced by the nations of Jordan and Sri Lanka,” the study’s authors wrote.
Meanwhile, extreme weather events, mainly driven by climate change, have continued to strain Texas’ power system, which operates independently of the national grid. The recent heat wave has been triggered by other extreme heat events as well as a record wave in February 2021, which left millions of Texans without power at once as temperatures dropped to minus-2 degrees Fahrenheit in Dallas and 13 degrees in Houston.
In the midst of this week’s scorching temperatures, which sent electricity needs to record highs, ERCOT issued public calls to save electricity. Wednesday’s appeal stated that the efforts of residents and businesses earlier in the week “heart ERCOT to meet record demand for power by reducing their energy consumption by 500 MWs,” or megawatts.
Although mining companies are among the companies that were voluntarily asked to save electricity, “this is not a requirement for them to save,” ERCOT said in a statement to The Post.
Bitcoin miners “turn off both because it is the right thing to do and because they are incentivized by ERCOT market mechanisms,” Bratcher wrote in an email.
Some companies have opted for programs offered by ERCOT, which pay large power consumers not to use power 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 are willing to do that,” Rhodes said of miners who voluntarily halt their operations. “But it was not entirely altruistic.”
With extreme weather events becoming more common, it may be seen by some as a possible solution to avoid congestion on the power grid to ask cryptocurrency operations to shut down during certain periods.
“It can be an expectation in some people’s minds,” Rhodes said. “But I think until it’s actually formalized into a program and someone signs a contract, I’s hesitant to trust it.”
It is important, he said, to find ways to make closure worth it for businesses. “It’s not a good idea to trust that someone is just a good citizen.”
