Major Texas Bitcoin Miners Close Operations Ahead of Winter Storm

Major crypto mining facilities in Texas are shuttering their operations to save energy ahead of the upcoming Landon cold blast.

On Wednesday, industrial-scaled Bitcoin mining firms told the state’s Governor Greg Abbott that they are powering down their energy consumption during this winter storm, with demands on the state’s power grid expected to peak.

The Texas Blockchain Council vice president Reed Clay had sent a letter to the Governor stating that they are “actively monitoring” by “taking proactive measures to shut down operations, shed load and create additional capacity in response to ERCOT’s needs should it be necessary.”

Texas based Bitcoin miners are curtailing their load starting TODAY to help provide excess power reserves for #WinterStormLandon. We are proud to help stabilize the grid and help our fellow Texans stay warm. 🤝#Bitcoin@txblockchain1

— Nathan Nichols (@Nathannichols) February 2, 2022

The Electric Reliability Council of Texas (ERCOT), the grid operator, said that it will “use all tools available to manage the grid” and that it is not asking any business to shed loads during the potential freeze.

Some miners get incentives from the state to return back their power usage. This means, that Bitcoin mining provides the economic incentive for more grid capacity than is typically necessary.

This allows for the potential for miners to shut down and sell electricity back to the grid at the spot price when demand is unusually high.

According to @txblockchain1, Five industrial scaled Bitcoin mining facilities have volunteered to power down during this winter storm.

ERCOT isn't asking anyone to shed loads just yet but miners are being proactive.

Combined, these facilities could power multiple cities.

— Daranesha Herron (@Daraneshatv) February 3, 2022

Compute North, a crypto mining service said that it is “prepared to shut down” an 11-megawatt Texas site. “If we are needed to come down to maintain stability, we are fully ready, willing, and able to curtail the entirety of our load if needed,” Peter Liska, director of energy at Compute North told Bloomberg.

Riot Blockchain’s Whinstone Mining Shuts Power

Riot Blockchain, one of the biggest North American miners, said it is closing most of its power voluntarily.

According to Trystine Payfer, the company’s spokesperson, the mine had cut energy consumption by roughly 98% as of Wednesday.

“Whinstone began taking proactive measures to prepare for shutting down its mining operations in response to any demand surges in Ercot,” Payfer told the publication.

Whinstone’s site has a total power capacity of 750 MW, with 300 MW currently developed.  This could power approximately 60,000 homes in the state.

Riot Whinstone, along with Bitdeer, Computer North, and Layer 1 have all powered down to save energy, according to Lee Bratcher, the Texas Blockchain Council president.

Texas – A Hotbed for Bitcoin Miners

Bitcoin miners have been flocking to Texas ever since 2020, due to the business-friendly environment and above all, the state’s cheap electricity.

But the rapid growth of crypto mining in Texas is raising concerns about the massive amounts of energy the operations require and the greenhouse gases they produce.

Some of the major mining players in the state include Bitcoin mining giant Bitmain which built one of the world’s largest bitcoin mines in Rockdale, East Texas, in 2019. Peter Thiel-backed crypto mining company Layer1 Technologies also started operating Bitcoin factories in West Texas in early 2020.

Las Vegas-based Marathon Digital announced in December that it is installing more than 100,000 bitcoin mining computers around Texas, primarily adjacent to wind and solar farms in West Texas.

ERCOT said in November, that it is expecting energy loads to increase five-fold by 2023, with Bitcoin mining demands and its data centers requiring up to 5,000 megawatts of further electricity.

The recent shutdown is a precaution by the miners, as not to repeat last year’s deep freeze that triggered blackouts that left hundreds dead. The 2021 outage left more than 4.5 million homes and businesses go without power for days, draining the state’s power grid.