Sirwin
Sirwin

Now that the Shock has Wanned Why Texas Paid Bitcoin Miners as Someone Who Grew up in the State and Now Works for Congress

By Cje95 | Chronic Illness and Crypto | 17 Oct 2023


A couple of months ago news broke about how Texas had addressed the power grid issue that almost caused grid failure over 3 and a half years ago. For those of you who are unfamiliar the Continental US has 3 grids, the Eastern Interconnection, the Western Interconnection, and the Texas Interconnection (commonly referred to as ERCOT). While various grids integrated with each other over time starting during WWII Texas's grid combined over time but never went outside of the State boundaries thus preventing the Federal Government from being able to regulate it. 

 

In the 1990s and early 2000s Texas' grid went through its two phases of deregulation which resulted in people having several hundred electricity providers. Growing up I thought this was an extremely common practice to bounce between providers to get the best bang for your buck until I moved to Washington, D.C., and found out there is a single provider and what they say is the price is the price.  During the early part of the deregulation Texas electricity prices rose more than the national average however then it entered a period of being 17% under the national average. Since 2000 Texas has been one of the best-performing states when it came to annual increases at just 2.21% compared to 2.36% national average

 

This deregulation and the lack of Texas being connected to either the Eastern or Western grids was a common punching bag for people when it came to the freeze. However, that couldn't be further from the truth as overall Texas exports more power than it consumes (mostly in natural gas and petroleum products), and these are sent both across the US and the world. When I visited NREL (National Renewable Energy Laboratory) in Golden, CO in early August I asked their staff about the freeze and why seemingly impossible things happened. I was told that the National Lab after the freeze realized something critical and that was that the past does NOT define or predict the future. Not anymore at least as Texas faced temperatures never recorded before. 

 

It was here that they really taught me about how the electrical grid actually operates at a certain frequency that while you cannot hear personally can be tracked to figure out what is going on and what adjustments need to be made. While we are able to tell when the grid is getting out of sync getting it back in sync is not as easy as flipping a light switch and to often do it smaller power plants have to be fired up to address the load. Most of these plants are NOT green and are often natural gas-fired. 

 

During the freeze these quick-to-bring-online natural gas plants froze and so where unable to do so. Once the freeze was over and Texas was recovering the state and ERCOT moved quickly to try and find out a way to address this issue as soon as possible. One of the ways to do so was through winterization of these power-generating assets which was ordered throughout the northern and even in some southern parts of the state. The state also wanted to build or create a way to have access to more power quicker and for that they issued a request for any and all companies to come up with a solution and how much it would cost as you can see below. 

 

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One of the biggest players in this space has been Riot Platforms and they have been on the forefront of fighting the misinformation that has flooded this idea. For instance when it comes to the Energy Credits and ERCOT's Ancillary Services...

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and followed it up with this graphic showing the spin down in action. 

 

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Riot has been clear with the public and regulators like ERCOT over what their long-term plans are. This is something that they even show in the graphic below. Compared to other options like having to build whole new plants Riot instead builds upon what already exists and leverages the existing power supply keeping more plants online and giving the state the power to spin down their operations and utilize their power contracts. 

 

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I do hope this clears up a ton of FUD that has hit the Bitcoin mining space since Riot Platforms released their numbers a couple of months ago. This is a prime example of the good that can come from mining as it helps ensure stability and thus safety for the grid both now and moving forward!

 

 

 

 

 

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Cje95
Cje95

Graduated from Texas A&M in May of 2020 had dabbled in crypto since 2017 but dove in at the end of 2019. December of 2020 packed up and moved to D.C.! Huge sports fan, space nerd, and international newsreader! Follow me on Twitter @Cje95_


Chronic Illness and Crypto
Chronic Illness and Crypto

Cryptocurrency and Blockchain are going to be a huge part of the future and no matter who tries it isn't going to be stopped! Here I try to give my best insight and thoughts into the latest crypto news, features, developments. Further, I look to discover any link to news from the United States ranging from social-political issues to stock market and economic data.

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