Sen. Warren leads probe of Bitcoin influence on Texas energy grid, ERCOT use of demand response ‘subsidies’
Dive Temporary:
Seven lawmakers led by Sen. Elizabeth Warren, D-Mass., have requested the Electrical Reliability Council of Texas for information on the power consumption of Bitcoin miners, together with what influence the cryptomining sector could also be having on power prices to native households and companies.
Particularly, Warren’s Oct. 12 letter seeks info on Bitcoin miners’ participation in ERCOT demand response packages that pay giant shoppers to cut back power consumption in instances of grid stress. These “subsidies” to miners “feed back into the worsening climate crisis,” in keeping with the lawmakers.
Texas might host as much as 20% of the world’s cryptomining computing energy worldwide by the top of subsequent 12 months, by some estimates. Miners say their power use may help hold the grid dependable as a result of it’s a versatile load that acts like a requirement facet battery.
Dive Perception:
Regardless of a speedy slide in Bitcoin costs this 12 months, ERCOT officers say curiosity in connecting to the Texas grid has continued to rise.
As of August there have been 33 GW of crypto mining masses wanting to connect with the grid, in keeping with ERCOT. That determine has nearly doubled since April, when it was simply 17 GW, the grid operator mentioned. Bitcoin completed April buying and selling north of $37,000 and closed out August at round $20,000.
Whereas there are dozens of gigawatts of crypto load interested by connecting to ERCOT, the grid operator famous in an e mail that at the moment there are solely “an estimated few hundred MW currently operational.”
The determine is rising. “Texas Bitcoin miners are bringing hundreds of direct jobs and thousands of indirect jobs to rural communities across the state as well as paying tens of millions of dollars in state and local taxes,” the Texas Blockchain Council, which advocates for the business, said in a response to Warren’s letter.
The group mentioned Texas miners curtailed over 50,000 MWh in July, in response to report warmth and power demand on the grid.
Bitcoin mining “soaks up excess power capacity during times of low demand and turns off on hot summer days when Texans use more energy,” Texas Blockchain Council President Lee Bratcher mentioned in a press release.
Offering providers again to the electrical grid can generate as much as 10% of a mine’s income. And ERCOT has confirmed the miners “respond during grid events by rapidly reducing their electric use,” together with serving to to make extra power accessible throughout Winter Storm Uri.
However Warren and the opposite lawmakers say asking ratepayers to fund demand response funds to crypto miners is unfair, and the incentives to cut back energy demand “contribute to a larger issue of having consumers, rather than industries with outsized electricity demand like cryptominers, bear the costs of maintaining the electricity grid.”
Demand response funds might attain $170 million yearly within the coming years, in keeping with the letter. “These subsidies to cryptominers also feed back into the worsening climate crisis,” the lawmakers mentioned.
The letter requested ERCOT to supply information on:
the electrical energy consumption of the Texas cryptomining business in 2022, together with what number of tons of carbon dioxide emissions it produced;
which cryptomining corporations have signed energy curtailment agreements with ERCOT;
how a lot miners are paid hourly to curtail their power consumption;
and the common value of electrical energy to shoppers throughout instances when crypto miners are being paid to curtail.
“The climate change that cryptomining is contributing to will further exacerbate extreme weather, creating a feedback loop in which energy demand more frequently exceeds supply, causing further strain on electrical grids and potentially resulting in more payouts to those same cryptomining companies,” the lawmakers instructed ERCOT.
ERCOT officers say they’ve obtained Warren’s letter and can have a response within the coming weeks.
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