Texas Plans To Become the Bitcoin Capital, Vulnerable Power Grid and All

An anonymous reader quotes a report from Bloomberg: Texas, already home to the most vulnerable power grid in the U.S., is about to be hit by a surge in demand for electricity that's twice the size of Austin's. An army of cryptocurrency miners heading to the state for its cheap power and laissez-faire regulation is forecast to send demand soaring by as much as 5,000 megawatts over the next two years. The crypto migration to Texas has been building for months, but the sheer volume of power those miners will need -- two times more than the capital city of almost 1 million people consumed in all of 2020 -- is only now becoming clear. The boom comes as the electrical system is already under strain from an expanding population and robust economy. Even before the new demand comes online, the state's grid has proven to be lethally unreliable. Catastrophic blackouts in February plunged millions into darkness for days, and, ultimately, led to at least 210 deaths. Proponents like Senator Ted Cruz and Governor Greg Abbott, both Republicans, say crypto miners are ultimately good for the grid, since they say the miners can soak up excess clean power and, when needed, can voluntarily throttle back in seconds to help avert blackouts. But it raises the question of what these miners will do when the state's electricity demand inevitably outstrips supply: Will they adhere to an honor system of curtailing their power use, especially when the Bitcoin price is itself so high, or will it mean even more pressure on an overwhelmed grid? Miners setting up shop in the Lone Star State can often count on a 10-year tax abatement, sales tax credits and workforce training from the state, depending on where they are located and how many jobs they add. Even without formal incentives, the cheap power prices and the state's hands-off policy toward business is often enough of a lure. The pitch is working: The grid operator Electric Reliability Council of Texas, or Ercot, will account for about 20% of the Bitcoin network globally by the end of 2022, up from 8% to 10% today, according to Lee Bratcher, president of the Texas Blockchain council. Right now, Ercot has somewhere between 500 and 1,000 megawatts of mining capacity, out of about 2,000 nationwide. The state grid will add another 3,000 to 5,000 megawatts of mining demand by the end of 2023, he said.

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