In July when there were record-setting heat advisories across the U.S. and a lot of energy grids became stretched to their limits. For almost a week straight in Texas, triple-digit temperatures hit the major cities in the state at the same time. Texas has a grid that is unlike other states in the continental U.S. as its grid is not connected to either of the two major power grids. Even though it has been this way for decades it did not come to a head until the winter freeze two years ago that almost crashed the grid and resulted in Texas recruiting and encouraging crypto miners to move to the state to consume the state's excess power.
At the time this was laughed at by a lot of people and even at one point people tried to state that this was further evidence that Bitcoin mining in particular was dirty and consumed a ton of fossil fuels. The fossil fuel idea though quickly died when it was shown that these mining hubs were in most cases pulling/using renewable energy that otherwise would be turned off since it would be excess power that would not be consumed. It was relatively unknown to most people that energy producers try to only produce a little more than they have to. This is done to not only protect profits but to not be wasteful. When Gov. Greg Abbott of Texas encouraged mining it meant that the baseload of needed power would increase and so when excess power was needed miners could be turned off or spun down and that power would return to the grid.
The program is voluntary but the major crypto miners have opted in due to the huge PR benefits of doing so and the huge financial windfall that the state would offer them to compensate. With the state offering these companies this opportunity for good press and money, it was easy to see why they would partake in it. Since one of the miners is the publicly traded company Riot Blockchain we can see just how good the benefits offered by the state are. In their July 2022 update Riot mined 318 Bitcoin at their facility a decrease of 28% from the month prior. However, they received a $9.5 million credit from the state for turning off their machines when they did which was the equivalent of mining an additional 439 Bitcoin at a price of $21,634! That is a HUGE HUGE swing for a company!
It was not like the machines were off for half of the month but rather just a few days and in that time they made what they could have earned for an entire month of mining. Not only that but with the heat being so bad in Texas at the time they were saved from having the machines getting damaged due to operating in the extreme weather. Another aspect of this is that they do not need to sell any of the Bitcoins that they mined to pay for the electricity bills either allowing them to hold them in hopes of the price continuing to recover.
For these reasons, it is safe to say that the idea pursued by Gov. Abbott has paid off for all parties. New renewable energy projects and existing renewable energy expansions have been able to move forward with having an anchor tenant to make sure that the company's power is being consumed 24/7. While this idea has gained more traction in some other areas of the U.S. it has gained traction in some South American countries like Paraguay. Paraguay generates 100% of its power from hydropower and is even able to export 40% of it to other countries however the transmission lines are old and outdated in the country and need to be updated. The hope for the Paraguay government is to encourage miners to move to the country and help pay for these updates for their cheap and clean power.
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