AUSTIN (KXAN) — Cryptocurrency mining is expected to grow significantly in Texas over the next five years, which could have a big impact on our electric grid.
According to estimates from ERCOT, miners could use about five gigawatts of energy by 2023.
“It’s growing from close to zero just a few years ago,” Carey King, the assistant director at UT-Austin’s Energy Institute, said earlier this month.
“Each miner is about the size of a desktop computer. And if you’re a large industrial scale bitcoin miner, you might have thousands of these computers running,” Lee Bratcher with the Texas Blockchain Council said.
Bratcher explained bitcoin mining is a process by which the Bitcoin network is secured, and how new bitcoins enter into circulation.
“To keep it brief, Bitcoin miners are just machines. Their application-specific integrated circuits…are running a hash algorithm, trying to solve a cryptographic equation in order to set the next block of transactions,” Bratcher said. “The blockchain is then verified and confirmed by the other miners. And the nodes then update their ledgers. So it’s a security mechanism to keep the Bitcoin network free from hacker attacks. And it’s also a way for new bitcoins to enter into circulation.”
When it comes to added strain to the grid in extreme weather conditions, Bratcher said the machines can turn off at any time, meaning extra power can surge elsewhere.
“They’re okay to be turned off at any time, they can turn off within 60 seconds,” he said.
King said, beyond his personal ethical questions about cryptocurrency, he only sees two issues with more crypto mining in Texas.
“There’s a short-term issue. It’ll raise prices to some degree. There’s a long-term issue: will it incentivize new types of generation to serve this new demand? Will it bring the revenues so that companies invest more in the grid? This is to be determined,” King said.
Bratcher said the new miners will most likely be in more rural areas, where “stranded energy” is often found. That’s energy that is produced, but not able to be used, because of a lack of transmission lines to transport the power elsewhere in the state.
“There’s a lot of excess West Texas wind energy, a lot of solar energy that can’t get to the big urban population centers like Dallas, Houston and Austin because there’s not enough transmission capacity at the right times of day,” Bratcher said.
Starting this spring, new industrial miners need to apply for permission to energize through the PUC, which oversees ERCOT.
“Any miner that’s coming on, we’ll have a load study done by the utility and by ERCOT, and receive approval. ERCOT is actually quite favorable to this industry because it helps provide more reliability and resilience with the grid. They have these loads that are out there that they can turn off whenever they need to,” Bratcher said.