Warren wants to know how much power Texas Crypto Miners use
In a letter Sent to the Electric Reliability Council of Texas, AKA ERCOT, Sen. Elizabeth Warren and her fellow congressional Democrats are asking how the Texas electric grid is subsidizing cryptomining groups when they subsidize their companies during peak demand.
Over the summer, as temperatures in Texas soared above 100 degrees, ERCOT asked major companies, including bitcoin mining, to shut down operations when power consumption increases. The Texas Blockchain Council, an association representing dozens of crypto mining companies in the state, had previously said the companies had agreed to ERCOT’s request and freed up close to 1% of Texas’ grid.
Warren’s letter also cites that Texas is already home to a quarter of all bitcoin mining and 9% of all mining power globally. This number could grow to around 20% by the end of 2023, according to industry insiders cited by Texas Monthly in August. At the same time, the energy used to mine bitcoin and ethereum, the two largest cryptocurrencies by market capitalization, resulted in 80 million tons of carbon dioxide emissions back in 2021.
Although despite this open hand to the people of Texas, there was also an economic incentive at play. Of course, peak energy usage also promotes a higher price per watt, so miners were encouraged to cut back on usage. Warren’s letter cited Gizmodo’s previous reporting on how one of Texas’ largest crypto mining operations was led by Riot Blockchain actually earned when it voluntarily went offline during the hottest summer months thanks to a power purchase agreement with ERCOT. More than that, the White House noted in its recent crypto and climate report:
“Increased electricity demand from mining cryptoassets also increases the overall peak level of grid demand. While it is valuable to reduce this peak during a grid outage, the increased peak is often why demand response is necessary, and establishes misaligned incentives between miners and grid operators.”
Warren and her fellow Democrats asked ERCOT about the annual power consumption of crypto miners over the past five years and the estimated carbon dioxide emissions from that energy use, the nature of the company’s power purchase agreements and how crypto mining companies plan to grow in Texas.
According to a July letter sent to the EPA by Warren and other congressional representatives, the largest mining operations in Texas drew approximately 1,045 megawatts of electricity, a figure they estimated could power all the residential houses in Houston, Texas. Although these numbers were based in February, before the crypto crash in May sent the entire industry into a bear market, Riot Blockchain used over 400 megawatts of capacity from both the Coinmint and Whinstone facilities.
But even without Warren and co.’s letter, cryptomining in Texas may be on the upswing. According to a report by CoinDesk in late August, the Texas Blockchain Council’s director of bitcoin mining analytics, Steve Kinard, said that ERCOT was already calling back how many new mining permits were issued. More than that, Kinard said there were fewer places that new mining operations could simply connect to without building up expensive supporting infrastructure first. Despite the permit decline, Kinard said grid operators did not directly say they were no longer interested in attracting new mining operations.
What can beat miners even more is the second most popular cryptocurrency ethereum transition from proof-of-work to proof-of-effortwhich promised to cut out the need for most mining operations, effectively reducing power requirements by 99%, at least by some estimates.
The only Texas representative to sign the letter was Al Green, whose district is in Houston. Green did not immediately respond to a request for comment Wednesday night.
