Texas Bitcoin Miners bail as record heat changes economy

Texas bitcoin miners have halted operations and moved energy allocations back to Lone Star State’s power grid as a blistering heatwave and a waning cryptocurrency price combine to change the industry’s performance picture.

“Almost all industrial-scale bitcoin mining” in Texas has shut down its rigs since Monday, Bloomberg reported, after the Electric Reliability Council of Texas (ERCOT) on Sunday night appealed to consumers to save electricity as heat reached all-time highs.

On Sunday, temperatures rose as high as 130ºF, and 110ºF is expected today.

The collective relocation of bitcoin miners at the industrial level has already released over 1,000 megawatts of electricity, about 1% of the Texas grid, for commercial and retail users, Bloomberg quoted the Texas Blockchain Council as saying.

ERCOT’s forecast shows that the demand for energy may exceed the supply when Texans blow up air conditioners during the heat wave. Crypto-miner Core Scientific announced it Twitter it had closed all of its mining servers in texas, which account for less than 15% of the footprint.

Texas became a hub for bitcoin miners in the United States after China suspended all industrial operations last year, and took advantage of the state’s cheap land and electricity prices. Crypto mining-friendly policies also made Texas attractive.

Turning off their power may not be just a measure of good faith. With a mining cost of around $ 16,647.79 per bitcoinBTC
In the state at a price that fluctuates around 19,900 dollars today, some miners see more profit in stopping operations and returning the energy back to the Texas grid than extracting bitcoin.

This is largely because the flexible mines of bitcoin miners allow them to pause operations and deliver energy to the state grid. In fact, bitcoin miners have entered into demand-response contracts with ERCOT, in which they agree, in exchange for discounts, to shut off electricity in times of high demand for electricity.

Riot BlockchainRIOT
said the Whinstone plant in Rockdale, Texas, reduced energy consumption by a total of 8648 megawatts in June in a statement. The company is the second largest listed bitcoin miner, with a market value of $ 659 million. Riot currently has a 10-year contract to buy all the power it needs in Rockdale at 2.5 cents per kwh, with a discount of 0.5 cents per kwh. This comes from their demand response contract, which also gives them the ability to resell all the power back to the grid.

Extreme weather conditions all year round mean that this is not the first time Texas bitcoin miners have stopped operations in favor of returning energy back to the grid. During the winter storm known as Uri in February 2021, bitcoin miners reduced their energy needs to zero, ERCOT said in a statement to UtilityDive.

In February this year, when temperatures in Texas once dropped to freezing, blockchain mining companies also shut down operations. Riot Blockchain closed 99% of its operations to move energy back to the grid.