Despite industry headwinds, Bitcoin mining is booming in Texas
MCCAMEY, Texas, March 23 (Reuters) – Cryptocurrency bankruptcies and concerns over electric power consumption have failed to slow the industry’s growth in Texas, according to a top trade group, citing increases in miners’ power needs.
Bitcoin miners use about 2,100 megawatts of the state’s power supplies, said Lee Bratcher, president of the industry group Texas Blockchain Council. That power consumption increased 75% last year and was nearly triple from the previous 12 months, Bratcher said.
Those demands make up about 3.7% of the state’s lowest peak load forecast this year, according to data from grid operator Electric Reliability Council of Texas (ERCOT).
“There have been some challenges with the Bitcoin mining industry,” Bratcher said, noting that his group recently saw two prominent bankruptcies and other miners scale back expansions.
The industry also faces new federal regulations, including a proposed 30% tax on electricity use for digital mining and calls from the US Treasury and commodities regulator for a regulatory framework.
New York this year imposed a ban on any cryptocurrency mining that runs on power generated from fossil fuels. Other states are expected to follow suit.
But in Texas, some counties have offered tax incentives and miners continue to be drawn to wind and solar power, which could supply about 39% of ERCOT’s energy needs by 2023.
“Bitcoin mining is a very energy-intensive business, which is why we tend to find places like West Texas to be full of Bitcoin miners,” said Matt Prusak, chief commercial officer at cryptocurrency miner US Bitcoin Corp, which has one of its mining operations in a 280-megawatt wind farm in Texas.
The McCamey, Texas, site last month consumed 173,000 megawatt-hours of electricity — about 60% supplied by the grid and nearly 40% from the nearby wind farm. The average American home uses about 10 MWh in a year, according to the Energy Information Administration.
In Texas, where about 250 people died during a winter storm blackout that exposed the fragility of the state’s grid, the prospect of higher crypto demand has raised alarms.
“There are a lot of Bitcoin mines trying to connect to the system,” said Joshua Rhodes, a researcher at the University of Texas at Austin. “If all of them were to connect in the timelines they want to connect, that would probably present a problem for the grid because that load would grow much faster than it ever has before.”
Reporting by Evan Garcia and Dan Fastenberg; writing by Laila Kearney; Editing by Chizu Nomiyama
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