- Texas's power grid operator is paying big businesses that use lots of power to power down.
- That includes crypto mining companies that flocked to the state for its cheap energy and vast land.
- Texas is seeing historic three-digit temperatures as a sweltering summer grips the state.
Texas's power grid operator is telling big businesses to power down as historic sky-high temperatures descend upon the lone star state.
Among those major operations are crypto mining companies, who flocked to Texas for its inexpensive electricity and wide open spaces, necessary for setting up shop.
The Electric Reliability Council of Texas, or ERCOT, on Monday urged residents and businesses to conserve energy in the hottest hours of the day, between 2 and 8 p.m. The City of Austin's energy company offered tips on how to do so, like setting thermostats to 78 degrees or higher, avoiding using large appliances like washers and dryers, and for businesses to minimize lighting where possible as temperatures reach 110 degrees in some places.
Bloomberg reported that virtually all of the state's large-scale Bitcoin mining operations had screeched to a halt as of Monday, giving back 1,000 megawatts of electricity to ERCOT. That amounts to about 1% of what Texas's grid can distribute.
That may not be out of their own goodwill. ERCOT issues economic incentives — dubbed demand responses, according to the agency's website — to large entities to shut down when temperatures hit extreme highs.
Bitcoin miners use vast data centers full energy-hungry computers to make millions of complex calculations that power the bitcoin network. They are rewarded for doing so with new bitcoin.
But their profitability hinges on the energy they eat up costing less than what they can earn, meaning they could financially benefit from ceasing operations at a time when power is rising in price alongside the state's temperatures.
To give some perspective on how much energy bitcoin mining uses, the University of Cambridge says the total amounts to more than what the entire country of Belgium consumes annually, per its Bitcoin Electricity Consumption Index.
China was once a major mining hub until its government rolled out new anti-crypto laws, sending them packing for friendlier pastures. They found them, in part, in Texas.
Mining giants like Riot Blockchain now call the state home, and an ERCOT spokesperson told Insider that "there are over 27 gigawatts of crypto load that is working on interconnecting over the next four years."
