Energy consumption by Crypto miners in Texas is increasing exponentially

Energy consumption by Crypto miners in Texas is increasing exponentially

Mining cryptocurrencies can take a toll on the energy reserves of its mining areas. According to the White House, the annual electricity usage by crypto-assets globally has increased exponentially. From 2018 to 2022, electricity usage for crypto-related activities increased from double to quadruple. Added to the recent shaky market of digital assets, the growth of crypto industries has struggled in the state of Texas. 

Miners are demanding more power for their minings. According to Lee Bratcher, head of the industry association Texas Blockchain Council, bitcoin miners employ around 2,100 megawatts of the state’s power supplies. According to Bratcher, electricity use increased by 75% last year and was nearly triple that of the previous year. Those demands amount to about 3.7% of the state’s lowest forecast peak load this year, according to data from grid operator Electric Reliability Council of Texas (ERCOT).

The crypto industry has seen a few hurdles recently. With the closure of major banks like Silvergate and SVB and the long winter, the industry has been struggling. This has also affected the mining business with firms either shutting down or scaling back their operations. The industry is also facing new government laws, such as a planned 30% tax on power consumption for digital mining and proposals for a regulatory framework from the US Treasury secretary and commodities regulator.

However, in Texas, certain counties have granted tax breaks, and miners are still lured to the state’s wind and solar power, which may meet 39% of ERCOT’s energy demands in 2023. This year, New York banned certain bitcoin mining that uses fossil fuel-generated power. Other states will most likely follow suit.

“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.”

Cody Harris, a member of the Texas House of Representatives, submitted a motion on March 21 intending to have the legislature declare that the “Bitcoin economy is welcome” in the state. If passed, House Concurrent Resolution 89 would primarily not affect Texas laws and regulations, but would rather reflect a feeling among lawmakers.

Cryptocurrencies are recognised under Texas business regulations as part of an amendment to the Uniform Business Code. However, some federal senators have criticised Texas’ apparent lax regulatory framework for the possible environmental effect of mining businesses’ energy use. The reelected Texas governor is a self-proclaimed supporter of the crypto industry. This gives hope to the miners in the state 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.