Texas crypto miners can claim as much power as the entire state of New York

Cryptocurrency miners are accelerating their efforts to expand in Texas far beyond what authorities initially expected, threatening to send the state’s electricity use skyrocketing.

Enough miners have applied to connect to Texas’ power grid to use up to 33 gigawatts of electricity, the Electric Reliability Council of Texas, which operates the system, said in an email Friday. That’s a third more than what the grid operator’s CEO said in April that officials were preparing to handle over the next decade. It’s also enough to power the entire state of New York.

A spokeswoman for the grid operator, known as ERCOT, said officials expect to have enough power plants available to meet any surge in demand. The miners will need approval from ERCOT before connecting to the grid.

The growing interest underscores how attractive Texas remains to crypto miners, even though the value of Bitcoin has plunged more than 50% in the past year. And while many of those miners may never set up shop, the sheer number raises questions about whether the state’s grid, which collapsed during a deadly winter storm in 2021, will be able to meet demand for electricity.

Crypto miners currently account for about 1.2 gigawatts of electricity demand in Texas, according to the Texas Blockchain Council, which represents miners. That’s enough to power around 240,000 homes. Over the past four months, the number of miners applying to connect to the network has doubled.

The state has aggressively recruited miners, touting its cheap power, abundant renewable energy and business-friendly regulatory environment. Texas has some of the cheapest electricity rates for large consumers, averaging about 7.57 cents per kilowatt-hour in June, a third lower than the national average, according to the US Energy Information Administration. It also has more wind power than any other state, which appeals to miners pushing to appear more environmentally friendly.

In April, ERCOT interim CEO Brad Jones said he was working with miners to prepare the grid to handle about 25 gigawatts of crypto demand over the next decade. Asked if Texas aims to be the world’s largest mining center, he replied: “Yes, that’s what we’re planning.”

Cryptominers say they can actually help stabilize Texas’ grid by soaking up excess power from wind and solar farms during the day, then shutting down when demand increases and the grid needs power. Nearly all of the state’s miners stopped operating during heat waves earlier this summer as electricity demand in Texas rose to all-time highs, according to the Texas Blockchain Council.

While miners typically pay upfront for certain infrastructure to connect to the grid, the added demand is likely to require more expansive upgrades that critics say will increase costs for households and other businesses.

Naureen S. Malik, Bloomberg