Crypto-miners in Texas are shutting down as the state experiences an extreme heat wave

by · July 11, 2022

With many parts of Texas lasting days with temperatures well above 100 degrees Fahrenheit in July, many crypto miners have shut down operations pending the state’s energy grid not being able to meet demand.

The Electric Reliability Council of Texas, or ERCOT, on Sunday urged residents and businesses in Texas to save electricity with “record high electricity demand” expected on Monday. According to ERCOT’s forecast, the demand for electricity in Texas – partly due to running air conditioners in the middle of extreme heat – may exceed available supply.

The energy supplier’s prediction model showed that demand could reach a record high of 79,615 megawatts (MW). While energy costs in Texas in June were reportedly reduced due to increased production from wind and solar, ERCOT reported on Sunday that wind production “generated significantly less than what it historically generated during this time period” – less than 8% of capacity when demand was forecast to be highest.

Many crypto miners in Lone Star State have announced that they have already scaled down or shut down pending demand that Texas’ energy network may not be prepared to handle. In a Monday announcement on Twitter, crypto miner Core Scientific so it had turned off all ASIC servers located in the state so far “to provide relief to the people of Texas.”

A spokesman for Riot Blockchain told Cointelegraph that the Whinstone plant in Rockdale had reduced energy consumption at ERCOT’s request during the summer months, consuming 8,648 MWh less. Argo Blockchain chief Peter Wall also said the company had also reduced operations in the state – probably with reference to the Helios facility in Dickens County.

“In times of high demand, we believe people should be given priority over crypto mining,” Wall told Cointelegraph. “When ERCOT issues a conservation warning, we take it seriously and limit our mining operations. We did this again this afternoon, as did many of our peers in the mining area.”

Related: Compass Mining loses the plant after failing to pay the electricity bill

Mining companies operating in Texas during the winter months have faced similar challenges since 2021, when sub-zero temperatures almost led to the entire network being shut down – instead, many parts of the state were without power for several days. In February, Riot announced that it had shut down 99% of operations ahead of a possible repeated winter storm, predicting that it would require about 50,000 MW of electricity – 62% of what the Texans might be trying to get from the grid on Monday.

ERCOT’s announcement came as many crypto mining companies continue to establish new operations in Texas, apparently attracted by less regulatory oversight and lower energy costs. In June, Riot Blockchain said it planned to “send the rest of its S19 mining fleet” from New York to Texas, and Swiss-based crypto-mining company White Rock Management announced it would expand its operations to the United States – starting with Texas.