Cryptocurrency bankruptcies and worries over electric power consumption have failed to dent the industry’s growth in Texas, according to a top trade group, citing the rise in the miners’ power demands.
Bitcoin miners consume about 2,100 megawatts of the state’s power supplies, said Lee Bratcher, president of industry group Texas Blockchain Council. That power usage rose 75 per cent last year and was nearly triple that of the prior 12 months, Bratcher said.
Those demands amount to about 3.7 per cent of the state’s lowest forecast peak load this year, according to data from grid operator Electric Reliability Council of Texas (ERCOT).
“There’s been some challenges with the Bitcoin mining industry,” Bratcher said, noting his group recently saw two prominent bankruptcies and other miners scaling back expansions.
The industry also faces new federal regulations, including a proposed 30 per cent tax on electricity usage for digital mining and calls by the US Treasury secretary and commodities regulator for a regulatory framework.
New York this year imposed a ban on some cryptocurrency mining that runs on fossil fuel-generated power. Other states are expected to follow suit.
But in Texas, some counties have offered tax incentives and miners continue to be drawn to its wind and solar power, which could supply about 39 per cent of ERCOT’s energy needs in 2023.
“Bitcoin mining is a very energy intensive business, which is why we tend to find places like West Texas to be full of Bitcoin miners,” said Matt Prusak, chief commercial officer at cryptocurrency miner US Bitcoin Corp, which has one of its mining operations in a 280-megawatt wind farm in Texas.
Its McCamey, Texas, site last month consumed 173,000 megawatt hours of power – about 60 per cent provided by the grid and nearly 40 per cent from the nearby wind farm. The average American home uses about 10 MWh in a year, according to the Energy Information Administration.
In Texas, where about 250 people died during a winter storm blackout that exposed the fragility of the state’s grid, the prospect of higher crypto demand has raised alarms.
“There are a lot of Bitcoin mines that are trying to connect to the system,” said Joshua Rhodes, a research scientist at the University of Texas at Austin. “If all of them were to connect in the timelines that they are looking to connect, then it probably would present an issue to the grid because that load would be growing way faster than it ever has before.”