Democrats led by Senator Elizabeth Warren are investigating how the crypto-mining industry is affecting the Texas mainnet, citing concerns about reliability and climate change.
In a letter WednesdayWarren and six other Democratic lawmakers asked the Electrical Reliability Council of Texas (ERCOT) for data on the energy used in crypto-mining operations, the associated carbon dioxide emissions, and the impact this has on electricity costs in Texas.
The letter also requested details about payments to crypto-mining companies to cut back on their energy use under programs that start with industrial customers when power supplies are tight. Critics have raised concerns that miners – especially those using energy-intensive bitcoin – received huge subsidies to cut back on use this summer during heat waves, which also helped the crypto industry avoid high electricity prices.
In simple terms, bitcoin miners earn money from mining that puts significant stress on the electrical grid: During peak demand when the profitability of continuing to mine declines, they then collect subsidies in the form of payments in response to demand when they are shut down,” the Democratic lawmakers said in the letter. Mining and doing nothing.
The Democrats added that the payments “contribute to the larger cause of getting consumers, rather than industries with huge demand for electricity like crypto companies, to bear the costs of maintaining the power grid.”
Senators Sheldon Whitehouse (DRI) and Ed Markey (D-Mass.) also signed the letter as well as Representatives Al Greene (D-Texas), Katie Porter (D-CA), Jared Hoffman (D-Calif.), and Rashida Tlaib (D-Michigan).
Texas has become a hub for crypto miners, raising concerns about the power grid. Cryptocurrency mining requires large amounts of electricity and works virtually around the clock. This can sometimes force grid operators to start up natural gas or coal-fired power plants that would otherwise remain idle.
Industrial-scale crypto miners are already using an estimated 2 gigawatts of power on the grid in Texas, according to an April presentation by the Texas Blockchain Council. There are 1,000 megawatts in gigawatts. One megawatt can power about 200 homes during peak demand, according to ERCOT, whose area accounts for about 90 percent of the state’s electricity load.
ERCOT estimates that another 27 gigawatts of encryption could be added to the network by 2026, an amount that is about a third of the peak of normal network demand.
This summer, peak demand for ERCOT broke several records amid a triple-digit heat, with peak demand reaching 80 gigawatts for the first time ever. Supply concerns have prompted occasional conservation calls for businesses and residential users. In February 2021, a prolonged cold snap triggered an energy crisis in Texas, with millions of customers losing steam.
The crypto industry touted its ability to be flexible and to reduce demand. Lee Bratcher, President of the Texas Blockchain Council, Tell Washington Post More than 95 percent of industrial-scale bitcoin miners in the state collectively reduced power consumption by more than 1,000 megawatts for a number of hours during the July heat wave.
The industry also said it performs network service through its ability to increase and decrease demand, helping to match supply and demand. Some mines are located near wind farms in West Texas where poor interconnection with populated cities means that energy can go unused.
Bratcher and ERCOT did not respond to requests for comment in time for publication.
Warren (D-Mass.) has been a vocal critic of cryptocurrency, urging more oversight of the industry’s financial and environmental impacts.
in Investigation Warren and Other Democrats, released over the summer, found that seven large miners who responded to requests for data ran more than 1,045 megawatts of electrical production capacity nationwide, which Warren and her co-authors estimated to be the equivalent of 830,000 homes.
The report also found that miners plan to increase their capacity by nearly 230 percent in the coming years to increase about 2,400 megawatts.
“All this energy use leads to significant amounts of carbon emissions and other negative air quality impacts,” the Democrats wrote in the latest letter.
New York lawmakers in June passed a bill that would impose a two-year moratorium on new flight permits for fossil fuel stations that feed cryptocurrency miners (energy ware, 15 June). Still Governor Cathy Hochhol (Democrat) You did not sign the law.
Texas officials have not indicated that they might consider a similar ban or other restrictions, although the network’s effects on the industry are being closely watched.
Ben Hertz-Shargill, global head of grid edge at Wood Mackenzie, told E&E News that asking for data from Democrats could help politicians deal better with the industry and could help support more regulations to beat the most energy-intensive form of mining. Bitcoin in particular relies on a verification process that uses a huge amount of electricity, he said, while other crypto platforms such as Ethereum have focused on a cleaner process.
In an interview, Hertz-Shargel said the power grid has a number of unprecedented challenges, from extreme temperatures to wildfires and droughts to high natural gas prices and inadequate grid components.
“Bitcoin mining represents an enormous burden on the network that regulators can control, and they are keen to prevent it from contributing to the energy security and climate challenges they already face,” he said.
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