Image Source: Pixabay

Boiling summers are not unusual in Texas. But the recent heat wave is nothing common as the rising temperatures hit 100 degrees Fahrenheit. The air conditioning needs due to extreme heat have increased the demand for power load. In fact, the Electricity Reliability Council of Texas (ERCOT) reported record-breaking demands. As a result, the council is appealing to residents to conserve power to help curb the power demand problem. 

An Effect on Crypto Mining Activities

The spiraling effect of the increasing demand hinders crypto mining activities in the lone star state. Some miners have been forced to shut down operations to accommodate the energy grid load. Texas is home to about 30 miners; 10 industrial and small-scale miners are double this number.

To help mitigate the power problem, big energy consumers are participating in the four coincident peak programs. According to Crypto-Academy, the crypto marketing agency, crypto mining companies like Riot Blockchain and Argo blockchain curtail power to stabilize the grid during demand peak hours once ERCOT sends a conservation alert. By curtailing power, the miners have helped push over 1000 megawatts back to the grid multiple times throughout the week, which makes a significant difference. 

The Bright Side

Crypto mining is a power-intensive process that affects Texas's ability to keep up with the power demands as more mining companies set bases in the state. There is also a concern about the environmental impact of the power-guzzling machines.

The net effect is that the bitcoin hash rate difficulty has not managed to rise by the projected 3%. The drop in bitcoin computing power benefits some companies because climate factors won’t affect their facilities much. The bitcoin computing power demand was lowest in July 2022 since the ban on crypto mining activities in China in May 2021.

Remember, crypto mining requires massive computing power by using processors to solve complex puzzles, including transaction tracking and verification.

More Mining Facilities are Upcoming Despite the Power Problem 

Texas is one of the go-to locations for miners. ERCOT projects an interconnection of  27 gigawatts of crypto loads over the next four years and an increase in power demand by 6 gigawatts by mid-next year. Some companies are boosting production capacity by increasing mining machines, while others are opening new establishments. The Hive is establishing its first US facility in Texas. This facility will operate using solar power and won't affect the state's power grid; hence it will be outside ERCOT  regulations.

Cleanspark, another sustainable mining and technology company, plans to open an establishment in west Texas in December 2022. The shutdown of mining activities is advantageous to the Georgia-based company because it means less network competition while benefiting from the abundant renewable energy in the state. 

Despite the hot spells, mining firms are flocking the state thanks to pro-crypto lawmakers. A deregulated energy infrastructure is also helping incentivize the exodus. The loosely regulated Texas appeals to miners because other areas would be hesitant to allow such operations. China banned them while New York is imposing a partial moratorium. Countries like Kazakhstan faced serious power issues despite being energy-rich. The demand was too much to satisfy the miners and keep homes warming during winter.

Fairing on Well

Despite the power problems, the mining companies are handling the situation well enough by powering off when required. For instance, the Hive has invested in a system that ensures power is off during peak hours, 7 am to 9 am and 5 pm to 7 pm five days a week. The entry of sustainable miners is also a wake-up call for established firms to have a long-term sustainable plan.

Essentially clean energy sources are without doubt the notable solution against climate change and will be core for the mining companies' resilience. Climate change drives extreme weather. The extreme heat has been preceded by extremely low temperatures such as the Dallas -2 Fahrenheit, which left millions without power in Texas. 

Some companies are investing in immersion cooling technology to increase bitcoin mining efficiency while keeping energy requirements in check. Luckily the miner has heeded the call to reduce power during extreme heat, even if it means reducing crypto production. However, ERCOT has said they have enough power generation to cater to forecasted high demand. 

ERCOT managed to meet the power demands through appeals to residents and businesses through a voluntary ask to save power. It is worth noting that no legal requirement obliges users to switch off power. Consumers are incentivized by market mechanisms and believe it is the right thing to do. For instance, ERCOT runs programs that pay large electricity consumers for not using power during peak demand. Also, electricity costs increase during low supply. Turning off the machines is a solution to avoid overtaxing Texas power grids. 

The temperatures have often broken past 100 and could break the heat record in the coming days. Briefly flipping the switch frees some energy, helping avert a demand crisis. In addition, increasing power cost during high demand is an economic incentive that helps power down during peak times. While crypto is bearish, there is justification for team play in saving energy, but time will tell whether Texas can sustain its insatiable energy demand. Sustainable energy is their saving grace. 

More By This Author:

Cryptocurrencies’ Role In A Time Of War
Buying Real Estate With Crypto - How Practical Is It?
Bitcoin Just Dropped Below $30,000 - What Caused The Sudden Drop In Price?