Crypto puts a strain on the power grid. Congress wants to empty it
All the companies included in the survey were asked to explain “the impact of their facilities on the energy costs of local families and businesses”, but none could describe existing estimates or models that tracked these impacts. Those involved in the issue said this was because they did not expect it to have a noticeable effect on the cost of consumers’ energy bills. One firm, Bit Digital, said it would be counterintuitive to study its own impact on local families and businesses because firms are purposely located in rural areas with excess power supply and limited demand – taking up empty space not used on the power grid. do not compete with consumers for power.
Bit Digital’s chief strategy officer, Samir V. Tabar, criticized the letter from Warren, et al. for being “silent about” data provided showing how the cryptomining firm engages in job creation “in dilapidated economies while using unwanted power infrastructure.” Tabar says Bit Digital is “excited to help shape the industry by being a leader in using sustainable power sources,” and the firm “hoped the senator would see our efforts there.”
Because data is so underreported, it remains difficult to predict how local residents and businesses will be affected by the projected growth of these firms. Some firms said that due to commitments by crypto mining firms to transition to renewable energy sources, things could change so quickly that existing data cannot be reliably used to predict how US citizens will be affected. At least one firm, Stronghold Digital Mining, claimed that the “variety of factors that affect residential electricity costs,” such as “natural gas prices, temperature fluctuations and other factors,” make it “difficult to attribute changes in local electricity costs” to crypto mining. (Stronghold did not immediately respond to a request for comment.)
The members of Congress believe that reporting requirements are the answer. They are particularly concerned about residents and businesses in states like Texas, where “relatively cheap electricity costs” are attracting “an influx of crypto mining companies,” which could potentially “add to the stress on the state’s power grid.”
The Future of Cryptocurrency in the United States
Warren et al. say that since 2019, global electricity consumption from bitcoin mining alone has “almost quadrupled” — basically erasing “the total reductions in greenhouse gas emissions associated with electric vehicles.”
In their responses, cryptomining firms pushed back against environmental complaints by pointing out that their goal is to spend as little money as possible on power, thus the biggest firms are highly motivated to switch to renewable energy sources. That, firms argued, could help the U.S. meet its renewable energy goals if the U.S. supported the expansion of cryptomining, rather than restricting or banning it as China has done and India is trying to do.
Companies also say that due to agreements between power companies and cryptominers to cut off miners’ power when there is a surge in energy demand online, companies help stabilize energy supplies and reduce consumer costs. Bit Digital even suggested that lawmakers consider rewarding miners who participate in these programs and encourage more cities to adopt crypto mining partnerships. Cryptominers’ hunger for growth and incentives seems, predictably, boundless.
Energy security remains a top priority in the US for most Democrats, and helping officials understand how digital currency works will remain an important part of the country’s energy use equation. By the end of the summer, members of Congress expect the EPA and DOE to reveal how they plan to increase reporting on crypto mining in the United States. If the agency’s response is timely, this update should come ahead of President Joe Biden’s request for a September report that would explain in part the energy policy implications if the U.S. adopts a digital central bank currency in the coming years.
This story originally appeared on Ars Technica.
