The Texas Weather Phenomenon
Everything is bigger in Texas – including the weather. In recent years, The Lone Star State has seen dramatic weather related events, including overly hot summers and unusually cold winters
Bitcoin Miners and the Winter Storms
Lee Bratcher, president and founder of the Texas Blockchain Council, expressed concern about how freezing temperatures may impact operations of Bitcoin miners in Texas. He stated, “Some Bitcoin miners elected to curtail their operations during the most recent winter storm, while others stood by to respond if conditions on the grid warranted it.” Additionally, Jamie McAvity, CEO and co-founder of Cormint – a Bitcoin miner in Texas, mentioned that his company had to be offline for 95 percent of the time at the start of the winter storm due to high grid demand.
“Riot Blockchain actively participates in demand response programs,” shared a Riot Blockchain spokesperson. This approach allows the Texas power grid operator, ERCOT, to manage the company’s load during challenging weather conditions. ERCOT’s Trudi Webster noted, “Texas continues to see significant economic growth with Large Flexible Loads, which includes cryptocurrency miners. The crypto mining industry represents the largest share of large flexible loads in ERCOT’s system.”
Due to the increasing demand, ERCOT established the Large Flexible Load Task Force (LFLTF) to address the impact of interconnected large loads in the ERCOT region. The programs like ERCOT’s LFLTF have attracted more cryptocurrency miners to set up operations in Texas. Foundry USA data indicates that Texas accounted for 8.43 percent of the Bitcoin mining hashrate in the US at the end of 2021, which rose to 28.50 percent as of July 27, 2023.
Although this growth has been significant, it has not been without controversy. For example, during the Texas heatwave last year, Riot received $31.7 million in energy credits from ERCOT. To address this, Webster clarified, “ERCOT does not issue power credits to loads that curtail their consumption. Such credits may be part of an individual power purchase agreement and are not controlled by ERCOT.”
Amidst these developments, McAvity emphasized that Cormint did not receive any payments from the state of Texas or ERCOT to cease its operations on Jan. 15. As indicated on ERCOT’s grid and market conditions dashboard, the Texas power grid has demonstrated stability during the recent winter period with sufficient supply to meet demand.
