A gigawatt — or 1,000 megawatts — is approximately the same amount of power as used by 750,000 homes. ERCOT has tallied more than 17 gigawatts in potential crypto-mining related interconnections by 2026.
About two gigawatts of crypto-mining capacity now exists in Texas with another two gigawatts arriving each year, according to new data released by an industry analyst.
A gigawatt — or 1,000 megawatts — is approximately the same amount of power as used by 750,000 homes. However, rather than undermining the state’s power grid, that stunningly high level of new energy consumption should help improve resiliency, an industry advocate has told an ERCOT task force.
“The increasing energy consumption … is inherent in the function on Bitcoin — it is not a problem — instead it provides a lot of value,” said Texas Blockchain Council official Steve Kinard.
Those comments and other pertaining to the growing cryptocurrency industry in Texas came during an initial meeting of ERCOT’s Large Flexible Load Task Force, a panel created to address challenges crypto mining will create for ERCOT’s interconnection and planning processes. The April 26 meeting, the second for the task force, drew about 200 participants.
ERCOT tallies 17 GW of potential interconnections
In an opening presentation, ERCOT tallied more than 17 gigawatts (GW) in potential “Large Flexible Load” interconnections by 2026, with the lion’s share in the North and Far West zones. Nearly three-quarters of the interconnection requests are behind the meter or co-located with generation, according to information provided by ERCOT.
More specifically, officials tallied eight data mining loads currently providing 750 megawatts (MW) of Controllable Load (that is, load with the technical ability to quickly respond to grid conditions on a voluntary basis) within ERCOT. These Controllable Load sites also have requested interconnection of an additional 2,600 MW. In addition, ERCOT reports seven sites initiating new registration requests as Controllable Loads, and 14 mining site totaling 650 MW that operate as less sophisticated “Non-Controllable” Loads.
Kinard, of the Texas Blockchain Council, noted that more than 90 percent of the cryptocurrencies mined in Texas is Bitcoin, as opposed to other currencies such as “Ethereum.” He said that under Bitcoin’s protocols, no more than 21 million of the coins can ever exist, and of that number, miners already have extracted 19 million. He said the remaining five million to be “coined” by 2040. Under Bitcoin’s protocols, the number of coins available for mining halves every four years. This drives demand, increases prices for the currency and has created additional urgency for cryptocurrency miners to get their operations up and running.
Given the supply of Bitcoin will eventually deplete itself, should ERCOT harbor concerns about the currency’s long-term viability? In response to one such question, an industry advocate said Bitcoin operators also earn “transaction fees” and that such fees will make up for lost revenues as fewer Bitcoins are mined. The details on how the profitability of those fees compare with mining operations was not explored, however.
Industry officials noted generally that their mining operations increase grid reliability and lowers prices. They said miners find West Texas particularly attractive because of its overlapping solar and wind corridors, which they described as unique in the nation. They noted that expanding operations in West Texas should help alleviate grid congestion because miners consume excess solar and wind power that otherwise face deliverability challenges. A number of crypto-currency advocates also touted positive comments about their industry from Gov. Greg Abbott, pro-industry legislation adopted last session (specifically, House Bills 4474 and 1576) and other examples of solid political support in Texas.
The panel has announced plans to hold at least two additional meeting in the coming weeks.