After China banned crypto mining last year, miners cropped up in dozens of other countries – and some even went to Texas. Soon, the Lone Star state became the world’s newest bitcoin mining capital. Governor Greg Abbott even made the issue a priority in his re-election campaign.
However, concerns have been raised about how crypto mining will affect Texans’ electricity bills in recent months.
A recent Bloomberg article says that a vote will be held by the Electric Reliability Council of Texas (the Texas grid operator) on creating a task force to examine how many mining operations are connected to Texas’ electric grid and how fast they are operating.
There’s no doubt that whenever a region becomes a crypto mining hub, it influences local electricity consumption and, consequently causes price increases. Besides adding extra pressure to the grid, crypto mining also requires system upgrades. The Electric Reliability Council of Texas is trying to evaluate how crypto mining will influence the electricity supply.
It might be too soon to predict an immediate impact, but the past experiences of other states give a hint as to what Texas might experience in the future. A study claims that bitcoin mining increased upstate New York’s energy costs by $165 million for homeowners and businesses $79 million in 2021. That means mining can drive up monthly electric bills by about $8 for individuals and $12 for businesses. That’s why Plattsburgh, New York, temporarily banned crypto mining when electricity bills skyrocketed in 2018. For a state like Texas, these numbers are alarming.
That’s because there are three power grids in the United States: one on the Eastern seaboard, the Western seaboard, and one in Texas. That might lead the layperson to believe that Texas is power independent – thanks to its swath of natural gas and oil fields in the state – however, that’s not exactly true. A pretty high-profile failure in Texas’s power grid proved that the state’s systems might be ill-prepared for severe weather events. Now, consider that there are even more crypto miners hooked up the grid than there ever have been.
Since Texas lacks regulation and has low-cost electricity, it has established itself as a crypto hub. However, the long-term viability of the state’s support for cryptocurrency mining might be greatly affected by the outcome of the report or a change in public sentiment (namely, the fact it raises costs) which makes it unpalatable to Texans.