With summer temperatures sweltering much of the United States, Texas’ notoriously fragile power grid is expected to once again come under severe pressure. Power outages and blackouts are feared for many, but previous years have shown that some are taking advantage of the scorching weather.
Extreme measures to reduce energy consumption
Facing extremely high demand last summer, the Electric Reliability Council of Texas (ERCOT) took extreme measures to reduce the state’s energy consumption.
In addition to issuing eight calls for voluntary energy conservation, the company targeted bitcoin mining, an energy-intensive process that uses computing power to solve complex mathematical problems to validate transactions on the Bitcoin network and to earn newly created bitcoins.
In August 2023, ERCOT reportedly paid a single company $31.7 million in energy credits to reduce its bitcoin mining operations. The company in question is Riot Platforms, which owns North America’s largest bitcoin mine in Rockdale, with a total capacity of 700 MW.
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“THE” Riot CEO Jason Les said in a statement (which has since been removed from his website).
“Riot achieved a new monthly record for demand response and energy credits, totaling $31.7 million in August, which exceeded the total amount of all credits received in 2022. Based on the average bitcoin price in August, the demand response and energy credits received are equivalent to approximately 1,136 bitcoins“,explained Mr. Les.
Legislation to limit compensation for cryptocurrency miners fails
Later that year, a bill was introduced to limit the amount of compensation that cryptocurrency miners could receive in the form of credits, but it failed to pass the threshold of commissions from the House of Representatives.
It’s unclear whether Texas will extend similar credits to bitcoin miners this summer, even as the state’s power grid faces new problems. The latest ERCOT report predicts a 16% risk of grid emergencies and 12% risk of power outages in August 2024 between 8 and 9 p.m.
Texas is the only state in the continental United States to have its own electricity grid. This has some advantages, such as avoiding federal regulations, but limits Texas’ ability to import electricity from other states in times of need or emergency.
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Growing Energy Demand in Texas
In recent years, the situation has gotten even worse for the Lone Star State due to the rise of data centers and artificial intelligence (AI), which consume a huge amount of energy. Studies suggest that AI could account for 0.5% of global energy consumption by 2027, about the same amount as the Netherlands.
Rising energy demand for AI and cryptocurrencies will be a problem for many parts of the world, especially Texas, which hopes to promote itself as a tech infrastructure hub. It remains to be seen whether its power grid can keep up.
“ERCOT CEO Pablo Vegas and others gave powerful testimony today before the Senate Committee on Business and Commerce, indicating that in just six years (three legislative sessions), the needs of our electricity network will increase from approximately 85,000 to 150,000 megawatts“,Texas Lieutenant Governor Dan Patrick posted on X earlier this month.
“Of theLater testimony indicated that this growth was due to population increases, normal business growth, and artificial intelligence (AI). However, cryptocurrency miners and data centers will account for more than 50% of the additional growth. We need to take a close look at both of these industries. They produce very few jobs compared to the incredible demands they place on our network. THECryptocurrency miners can actually make more money selling electricity back to the grid than their cryptocurrency mining operations“, he added.
“In the end, it’s the Texans who will pay the price.
Via www.cbsnews.com