Bitcoin Mining in Texas Not Responsible for Increasing Power Demand
The Bitcoin mining industry in Texas has seen significant growth in recent years, making the Lone Star State one of the largest Bitcoin mining hubs globally. Miners have flocked to Texas after China’s mining exodus, attracted by the region’s abundance of wind and solar power, as well as its vast land resources. According to a blog post from the Texas Blockchain Council, Texas accounts for over 30% of the total hashrate in the US and is home to five of the largest Bitcoin mines in the country. This has effectively made Texas the capital of Bitcoin mining worldwide.
Despite the success of the Bitcoin mining industry in Texas, local media outlets have been quick to blame miners for the increasing power demand in the state. An article published in The Austin Chronicle stated that Texas’ power demand currently stands at around 85 gigawatts (GW) and is expected to double by 2030, reaching 150 GW. The article attributed more than 50% of this new demand to the growing number of crypto mining operations and data centers in the Permian Basin.
However, industry experts argue that Bitcoin mining is not the primary cause of the rising power demand. Lee Bratcher, Founder and President of the Texas Blockchain Council, believes that the estimation by the Electric Reliability Council of Texas (ERCOT) that energy consumption will reach 150 GW by 2030 is skewed. Bratcher pointed out that Bitcoin mining in Texas currently accounts for 2902 Megawatts (MW) of demand, according to ERCOT. He expects the aggregate amount of Bitcoin mining to level off around 5,000 MW by the end of the decade due to capacity constraints, falling profitability, and competition with AI data centers. Based on these numbers, Bratcher argues that Bitcoin mining will only account for around 3% of the load growth between now and 2030.
ERCOT, on the other hand, states that crypto mining represents the largest share of large flexible loads (LFLs) seeking to interconnect to the ERCOT system. Trudi Webster, Head of ERCOT Communications, explains that about 50% of ERCOT’s estimated new large load growth in Texas by 2030 is made up of combined crypto mining and AI data center load. However, ERCOT does not specifically break down crypto mining or data operations in its reports.
Contrary to the claims made by Texas media outlets, ERCOT’s findings indicate that Bitcoin mining is not responsible for the increasing power demand. Jamie McAvity, CEO of Cormint Data Systems, a Bitcoin mining company based in Texas, points out that rising electricity prices in the state are primarily due to the lack of new natural gas generation since 2017. McAvity also dismisses the notion that Bitcoin mining occurred during periods of high electricity prices and scarcity.
Furthermore, Bitcoin miners play a role in stabilizing the Texas power grid by curtailing their operations during peak performance times. Bratcher states that Bitcoin miners have a more muted impact on price increases compared to other industrial or commercial loads. They raise prices overnight and during times of low demand, which helps lower prices during peak demand times when miners curtail their operations.
Overall, the blame placed on Bitcoin mining for the increasing power demand in Texas seems unfounded. The industry experts argue that other factors, such as the lack of new natural gas generation, are the primary drivers of rising electricity prices. Bitcoin miners play a role in stabilizing the power grid and have a more limited impact on price increases than other industries.