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Yesterday I wrote an article about Texas's crypto mining industry powering down in preparation for the winter storm that has now hit most of the state. If you have not read it or are interested in how Texas has banked on Bitcoin mining to stabilize its gride you can read about it ! Where I am from outside of Houston the temperature has dipped to 39 degrees with a windchill making it feel like 29 out. Adding to that it has also been lightly raining/sleeting throughout the day so my mom has informed me that there have been reports of ice issues further causing issues in the state.
The grid though has been operating perfectly fine with the storm moving through too many people's relief so so far so good on that front. I have had friends and family ask me though about how/why the Bitcoin miners would willingly turn off their machines and return power to the grid and the reason for it is rather unique to Texas's grid in particular. The Texas grid is run by an organization called ERCOT and it runs the grid for most of the state. There are a few exceptions like El Paso but roughly 25 million people live under this grid. The grid is also deregulated on both the generation and consumption sides of the market. Without getting into the politics of it this has had mixed results the biggest thing is that it has allowed for massive investment in renewable energy generation leading to Texas being the leader in renewable energy generation.
In 2021 the balance between generation and consumption was absolutely shattered leading to widespread outages and almost a complete grid failure. A complete grid failure would have resulted in it taking weeks to start providing power again due to the complex nature of electrical grids and not straining the system. An idea was put forward to solve this and it was to entice industries that were energy-intensive to set up shop in Texas and then when the need arises have these industries go offline resulting in additional capacity being added to the grid. This idea turned into demand response programs that fit the Bitcoin mining industry to a T. When the load starts to get too high ERCOT will pay these miners a premium to turn off their machines.
Now some of the companies have gone above and beyond and Riot Blockchain is a prime example. Before the storm had really had its impact they have already begun dialing back machines and when it hit the state they already had 98-99% of their total power consumption offline! They did this before the call to and when ERCOT would pay them. This goodwill gesture will go a long long way for future adoption and utilization of technology like this to stabilize the grid. The demand has already surpassed what it was from last year's storm with 72,000 megawatts demanded and met while last year the grid suffered from blackout just after hitting 69,000 megawatts. Tomorrow morning is when the demand is expected to peak and ERCOT has stated it has 81,000 megawatts ready to go for the maximum time. All signs though point to this idea working and quite possibly being adopted in different states and on different grids. It was a unique solution to a complex problem and so far all parties seem to be very very happy with the results!
Please know I am not a financial advisor I am just someone who picked up on a trend and wanted to express it! Makes sure you always do your own research and never invest money you cannot afford to lose! If you enjoyed this article and would like to further support me below are a couple of referral links that if you used when signing up I would appreciate it! Also, follow me on Twitter @Cje95_
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