A number of crypto miners in Texas are already shutting down some or all their operations, as the region awaits an Arctic blast that is likely to test the state’s power grid this week.
The miners, many of whom flocked to the state in recent months to take advantage of Texas’s low energy costs, say that they will reduce their energy consumption to help avoid a power failure similar to the one Texas experienced in 2021. That outage left about 4.5 million homes and businesses without power and led to nearly $200 billion in property damage.
These efforts will dovetail with those of the Electric Reliability Council of Texas (ERCOT), which operates the Texas grid and said on Wednesday that it would use “all tools to manage the grid.” Some of the miners will also be taking advantage of state incentives to ratchet back their power usage.
Riot Blockchain, one of the biggest North American miners, has already reduced its energy usage at its Whinstone facility in Rockdale by 98-99%, Trystine Payfer, Riot’s director of communications, told CoinDesk. “We will continue to do so as needed until there is no extreme stress on the ERCOT grid,” she added.
Compute North, which hosts bitcoin miners in their data centers, told CoinDesk that it is also closely eyeing the storm. “We are prepared to respond real-time to curtail our operations in order to support ERCOT, grid stability and power demand,” Compute North Director of Energy Peter Liska said.
Nathan Nichols, the co-founder and CEO of Texas-based miner Rhodium tweeted that miners in the state were “curtailing their load starting TODAY to help provide excess power reserves for #WinterStormLandon.”
To be sure, Texas, there are programs available for heavy power consumers such as crypto miners, to incentivize them to lower their energy usage during peak demand periods. For example, in exchange for helping ERCOT stabilize the grid, Riot gets to participate in load management programs and other services, including some long-term lower, fixed-pricing agreements, Payfer said.
Compute North’s Liska said that demand response programs, which allow customers to reduce their electricity usage when energy prices are high, are one way for the company to balance power generation and consumption during peak demand .
“Rather than incremental energy production, we reduce our load giving power back to the grid, which is more cost effective and efficient than spinning up additional energy reserves,” Liska added.