REUTERS/Maxim Shemetov/File Photo
Texas' power-grid operator is telling big businesses to power down as historic sky-high temperatures descend upon the Lone Star State.
Among those major operations are crypto-mining companies, which flocked to Texas for its inexpensive electricity and wide, open spaces necessary for setting up shop.
The Electric Reliability Council of Texas on Monday urged residents and businesses to conserve energy in the hottest hours of the day, between 2 and 8 p.m. Austin's energy company offered tips on how to do so, like setting thermostats to 78 degrees or higher and avoiding use of large appliances like washers and dryers. For businesses, it said to minimize lighting where possible as temperatures reached 110 degrees in some places.
Bloomberg reported that virtually all of the state's large-scale bitcoin-mining operations had screeched to a halt as of Monday, which gave 1,000 megawatts of electricity back to ERCOT. That amounts to about 1% of what Texas' grid can distribute.
That may not be out of their own goodwill. ERCOT issues economic incentives — dubbed demand responses on the agency's website — to large entities to shut down when temperatures hit extreme highs.
Bitcoin miners use vast data centers full energy-hungry computers to make millions of complex calculations that power the bitcoin network. They are rewarded for doing so with new bitcoin.
But their profitability hinges on the energy they eat up costing less than what they can earn, meaning they could financially benefit from ceasing operations at a time when power is rising in price alongside the state's temperatures.
For context on bitcoin's energy consumption, the University of Cambridge says in its Bitcoin Electricity Consumption Index that the total amount of electricity used for bitcoin a year is more than what the entire country of Belgium consumes annually.
China was once a major mining hub, but its government rolled out anti-crypto laws last year, sending miners packing for friendlier pastures. They found them, in part, in Texas.
Mining giants like Riot Blockchain now call the state home, and an ERCOT spokesperson told Insider, "There are over 27 gigawatts of crypto load that is working on interconnecting over the next four years."
