Meanwhile, Texas has positioned itself as a mecca for crypto-mining at the same time its energy grid still struggles to keep up. February 2021’s crushing winter storm prompted widespread power outages statewide and claimed at least 246 lives.
Crypto-mining operations, which verify transactions and create new coins, are energy-intensive because they require high-powered computers to produce the virtual currency. But while miners have promised to help return power to the grid during times of peak demand by shutting down, not everyone views crypto as a boon.
Texans will continue to see calls for conservation this summer, said Adrian Shelley, director of the Texas office for Public Citizen, a nonprofit consumer advocacy group.
Crypto is simply another strain on an already taxed grid, he said. The claims that the operations will spur investment in clean energy and provide grid stability don’t hold up under scrutiny.
“It’s just kind of common sense,” Shelley said. “If the miners weren’t here, then we wouldn’t have their demand on the grid to worry about. Once they’re here, they’re putting demand on the grid.”
Crypto-mining is coming to Texas because it bills itself as a haven for cheap and abundant energy, and because the state has a laissez-faire business climate, Shelley said. Some mining outfits that have altruistically vowed to shut down during tight demand likely would have anyway because they’d no longer be making money while energy prices surge.
In addition, some experts say these operations will raise prices for regular energy consumers and contribute to climate change.
Certain politicians, such as Gov. Greg Abbott and Sen. Ted Cruz, have touted cryptocurrency as a solution to Texas’ energy troubles. But Shelley argued that such lawmakers are either being insincere or have been “completely misled by the industry.”“It’s a very volatile market, per se.” – Dr. Joshua Partheepan, West Texas A&M University
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“I think that crypto-miners are preying on anxiety about the grid and ignorance about how the grid works, and making overstatements about their benefit that they know are misrepresentations,” he said. "Politicians have either been duped or they are being disingenuous with the people of Texas.”
China was the go-to destination for crypto until it recently banned the practice, noted Joshua Partheepan, an associate professor of engineering at West Texas A&M University. Since then, miners have moved to Texas, where electricity prices are low. The Panhandle tends to be one of the cheaper places in the U.S., and Partheepan expects more to relocate here.
Putting aside cryptocurrency’s negative connotations, the industry could theoretically be good for the power grid if handled properly, he said. We’ll have to hope that they’ll do what they promised to do during times of extreme strain: shut down.
Partheepan said he knows of a crypto unit that consumes around 700 megawatts of electricity, which can power roughly half of Amarillo’s population.
If cryptocurrency’s value is high, it makes sense to consume electricity to mine coins, he added. But its worth has dropped in recent days, with Bitcoin and Ethereum nosediving by nearly 20% over the span of one week in May.
“When it reaches that threshold, they’re going to turn off their computers until it comes back in value,” Partheepan said. “So, it’s a very volatile market, per se.”
