• By 2023, the demand for Texan Bitcoin mining power could have increased fivefold

  • While the state is eager to become a global hub for Bitcoin mining operations, residents are concerned that the power grid will be overwhelmed.

    Texas’ electrical infrastructure will have to support the industry’s expected 5,000 megawatts (MW) of additional power demands by 2023, as the state faces a rapid influx of Bitcoin mining operations.

    The Texas Bitcoin mining industry currently consumes 500 to 1,000 MW of power. According to reports, the Electric Reliability Council of Texas (ERCOT) anticipates a fivefold increase in demand by 2023 and has planned an additional 3,000 to 5,000 MW.

    This expansion comes as the Lone Star state prepares to host 20% of the world’s Bitcoin mining operations. Since the Chinese government officially banned Bitcoin mining earlier this year, Texas has emerged as the go-to destination for Bitcoin miners.

    The state government has taken advantage of China’s crackdown by making Texas a haven for cryptocurrency miners, who can now take advantage of a 10-year tax break, sales tax credits, and state-sponsored workforce training.

    Some Texas residents, on the other hand, are concerned that the current power grid cannot be improved. The management of the state’s electrical grid by ERCOT came under intense scrutiny in February 2021, when blackouts plagued the region during an extreme cold spell that left about 5 million residents without power for days.

    ERCOT’s report on Friday did not inspire confidence that the grid problems had been resolved. Amal Ahmed, a reporter for the Texas Observer, tweeted on Monday,

    “The new seasonal assessment report (basically, a forecast) from ERCOT appears to indicate that, unsurprisingly, the agency’s approach to truly preparing for extremes hasn’t changed at all.”

    Some miners have attempted to assuage residents’ concerns about the potential resource drain. The Texas Standard reported on October 21 that some Bitcoin miners have been collaborating with local power providers to ensure the grid’s stability.

    Meanwhile, as BTC mining operations become more environmentally friendly, several others plan to use fully renewable and potential alternative energy sources, such as natural gas flares.

    There are currently no proposals from the Texas state government to address potential issues that may arise as a result of an increase in electrical demand from cryptocurrency miners. According to the Texas Standard, miners could be flexible in shutting down their hardware during peak demand periods, or they could be charged a premium per kilowatt-hour if they stay on during peak demand periods.

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