I have three things to say about this.
With interest surging in digital currencies and the blockchain technology behind them, more and more investors and operators are turning to Texas, lured by its cheap energy and hands-off regulatory approach. The rush, like those underway in Wyoming, South Dakota and other states, has been welcomed by energy executives and some elected officials who see it as a catalyst for job growth and tax revenue.
But it is also adding massive new demand to the state’s fragile electricity grid and putting pressure on legislators to harness the growth in ways that are sustainable — and that don’t price out residential consumers.
The Energy Reliability Council of Texas, which manages the state’s grid, is projecting that the explosion in cryptocurrency and other “large load” operators could bring as many as 16 gigawatts of new electricity demand by 2026. That’s about a quarter of the grid’s current capacity and enough to power over 3 million homes on a summer day.
“I don’t think anybody thinks all of that will be built, but it’s still a tremendous amount,” said Cyrus Reed, conservation director for the Lone Star Chapter of the Sierra Club.
For a state that failed so spectacularly to secure the power supply during last year’s winter blackouts, piling on more demand will be a critical new test, especially in the face of climate change. Last week alone, unseasonably high temperatures drove electricity demand to midsummer levels. Late Friday, the state asked Texans to conserve power after six natural gas-fired power plants tripped offline.
Leaders in the crypto industry say their entrance will improve reliability by bringing uniquely flexible loads — often sprawling, power-hungry data warehouses — that can shut down within minutes and put electricity back on the grid when demand peaks.
[…]
Joshua Rhodes, a researcher at the University of Texas at Austin who has consulted for a crypto mining company, said the same hallmarks of the state’s deregulated electricity market that helped lead to such growth in wind and solar over the past two decades could make it hard for leaders to rein in bad actors.
“They have the ability to be part of the energy transition that we need, but I’m becoming less convinced that the majority of them care enough to do it,” Rhodes said of the industry.
Any new regulation will have to wait until next year’s legislative session. Last cycle, the House and Senate set up a study group that includes two Republican members and the president of the Texas Blockchain Council, a trade group whose lobbyist is a former top aide to Republican Gov. Greg Abbott. The group will meet to take public testimony this month.
Rep. Tan Parker, R-Flower Mound, has been leading the crypto push in the House. He said his focus is on helping the industry grow with minimal restrictions and on ensuring there is enough power to meet demand, including new generation from fossil fuels and possibly nuclear power.
“It’s all about creating a level playing field so that folks know what the rules of engagement are, and therefore can be successful,” Parker said.
If new rules are on the way, many in the industry aren’t worried that they’ll stifle growth.
“We just had a gubernatorial race where we had three candidates tripping over each other to be the most bitcoin candidate there was, so I don’t see regulation coming now,” Griffin Haby, co-founder of Limpia Creek Technologies, told attendees at a crypto conference last month in Houston, referring to the Republican Party primary. “But you never know.”
1. This story weirdly does not mention the utter mess that the crypto market is in right now. I’m hardly a crypto expert, and things change quickly over there, so one might simply say that it’s all a bit of minor turbulence that will have no effect on the longer term projections. Fair enough, but the volatility of the market, the zeroing out of some entire currencies, the huge loss of investors’ capital, you’d think it would have at least merited a sentence or two.
2. We all know that the Republicans will do absolutely nothing to bolster or protect the grid as they roll out the red carpet for coinminers. They did nothing after the freeze last year, so it would be delusional to think they’ll do anything here. Maybe those “large load” operators will come swarming in, and maybe the coinminers themselves will have a bit of civic responsibility. That’s about the best you can hope for as long as the Republicans are in charge.
3. It’s going to be a long, hot summer. Forget the future projections, hope that the grid doesn’t crap out on us tomorrow or next week or (God forbid) in August.