Bitcoin Mining and Tesla Charging Could Take Down the Texas Power Grid
Bitcoin miners were banned in China and Iran. Now Texas residents will pay dearly with their wallets and maybe their lives. I'm serious.
“Bitcoin is literally anti-efficient. So more efficient mining hardware won't help - it'll just be competing against other efficient mining hardware.”
“This means that Bitcoin's energy use, and hence its CO2 production, only spirals outwards.”
“It’s very bad that all this energy is being literally wasted in a lottery.”
— David Gerard, author of Attack of the 50 Foot Blockchain
Temperatures have been sweltering in Texas this month.
Throughout the month of May, Austin has either broken, tied or been damn close to setting the “hottest temperature on this date ever” record.
Temperatures have been unseasonably hot, but it hasn’t hit 100 degrees yet.
Two years ago, there were 48 days of triple digit temperatures in Austin.
That’s why 30 million Texans reacted with shock and outrage around 5 p.m. (perfect time for a news dump) last Friday.
The Electric Reliability Council of Texas (an oxymoron of deluxe caliber) lovingly dubbed ‘ERCOT’ issued a disturbing statement.
The statement stank like the left armpit of a clown who hates Old Spice and hasn’t showered yet after an eighteen hour drive from Mississippi to Miami in a baby blue, beat up Volkswagen Bug packed with 99 other smelly clowns.
ERCOT announced:
Greetings, Texas electricity consumers.
Six power plants have unexpectedly gone down. All at the same time.
Whoops!
Just to remind you:
ERCOT manages the flow of electric power to more than 26 million Texas customers.
That’s 90% of the state’s electric load.
ERCOT schedules power on an electric grid that connects more than 52,700+ miles of transmission lines and 1,030+ generation units.
So this means ALL Y’ALL!
Turn your thermostat up to 78 degrees all weekend
Avoid using large appliances from 3 p.m. to 8 p.m. to reduce strain on the power grid.
Follow our orders immediately or the grid might go down this weekend.
Bashfully yours,
King Ercott Honeydew II
Anyone who survived Snowpocalypse ‘21 is brutally familiar with the galaxy award-winning incompetence of ERCOT.
If there was an awards ceremony like ‘The Grammys’ where people, companies and organizations got awards for the biggest fuck-ups of the year, the name of the ceremony would be called ‘The Ercotts’.
If you weren’t lucky enough to experience it, here’s what happened:
“In February 2021, an extreme winter storm event caused a massive electricity generation failure in the state of Texas, which resulted in a loss of power for more than 4.5 million homes.”
“This failure has resulted in at least 57 deaths across 25 Texas counties and over $195 billion in property damage, bringing attention to the energy system crisis and its potential causes.”
A bunch of high-ranking ERCOT executives resigned or got fired after the disaster.
But in the 15 months since they cleaned house and hired new replacements, the weather has been relatively mild.
Temperatures in Austin have only hit 100 degrees 5 times in the past 15 months.
Should you be worried about the Texas electrical grid melting down on a hot summer from 20 million air conditioners cranking simultaneously?
You’re damn right you should.
But air conditioners are playing fourth fiddle to three massive trends in the Texas energy marketplace since Covid-19.
Three major developments in Texas over the past two years:
The population of Texas is exploding.
Bitcoin miners from around the world are relocating to Texas for the cheap electricity.
Huge surge in the number of electric vehicles plugged into the grid.
Thirty million people live in Texas. Austin is one of the fastest-growing cities in the USA. Housing and rent prices are exploding along with the population.
Fortune 500 companies Oracle and Tesla moved their global headquarters from Silicon Valley to Central Texas.
Apple has a billion dollar campus in North Austin. Google and Facebook both have towers downtown. Oracle’s newly relocated HQ is diagonal across the lake.
Tesla employees, tech workers and California transplants prefer electric vehicles.
Did you know if you charge a Tesla with a regular 120 watt outlet for one hour, you can drive for three miles.
So all EV owners drop a couple thousand bucks on a 240 watt (or stronger) home charger.
That gives you 40 miles for every hour of charging.
A website that tracks electric vehicles shows 126,359 EVs are registered in Texas as of two weeks ago. And the number is steadily climbing upward as more Californians, tech bros and Telsa employees move here.
In Austin, 1.37% of all registered vehicles are electric cars.
But charging 20,000 new Teslas is nothing compared to the biggest development in the Texas energy sector since the last grid went down for four long, cold, miserable days in February 2021.
Electricity-sucking leeches known as ‘Bitcoin miners’ have been moving to Texas in massive numbers after getting banned from other countries.
Iranian officials initially embraced Bitcoin mining. Iran generated 4.5% of bitcoins mined globally between January and April 2021.
Guess what happened next?
Iranian citizens and businesses got super pissed when the power kept going off almost every day.
Iran banned bitcoin mining in May 2021 after cities suffered blackouts and daily power shortages.
China was the world’s leader with a dominant 65% to 75% of the total “hash rate” (processing power) of the bitcoin network.
But China cracked down on cryptocurrency in May 2021. The Chinese state council banned crypto mining on June 21.
By August, China’s bitcoin mining capacity fell to virtually zero. Illegal operations have brought China back to 22%, but the new global leader is the United States.
Why are China, Iran, India and Turkey banning crypto mining, but not the USA?
Because our octogenarian political leaders are greedy idiots who have always lived with the aging, wheezing U.S. power grid functioning perfectly.
BBC:
“If the global bitcoin mining industry were a country, it would be the 29th biggest consumer of power in the world on a list of nations by energy use, above Argentina, which has a population of roughly 45 million.”
Bitcoin mining rigs consume massive amounts of power and generate a ton of heat. Fans to cool these rigs use more energy, especially when they are working overtime on a hot summer day.
Even though the price of bitcoin plummeted around $30,000, the operations aren’t slowing down anytime soon.
Bitcoin miners are still getting a sixfold return on the price of Texas electricity even at $30,000.
These electricity parasites suck so much juice from the grid, Texas power companies are forced to spend serious cash to keep up with the surge (zing!) in demand.
Governor Greg Abbott has publicly encouraged cryptocurrency miners to move to Texas, despite the potential record-breaking demand on the grid.
But the CEO of Rayburn Country Electric Cooperative says two of the new bitcoin mines proposed in their 16 county service area north and east of Dallas, will require $20 million in system upgrades each to bolster power lines and avoid blackouts.
The two operations combined consume enough electricity to power 120,000 Texas homes.
Rayburn Country Electric currently provides power to 230,000 customers, mostly small towns and homes.
Now two power-sucking vultures want to use up half the area’s energy to mine for digital coins.
“Just two digital mining operations in Texas would each require as much as $20 million to fortify power lines and avert blackouts, according to one utility. Each would consume enough electricity to power as many as 60,000 homes.”
“Besides threatening to boost power bills, the dozens of Bitcoin mines proposed are also a risk to the state’s shaky power grid after a deep freeze last year left hundreds dead and pushed up prices so much that utilities were left with massive debts or bankrupted.”
Bitcoin mining uses 0.5 percent of all electricity consumption worldwide. That’s a 10-fold increase since 2017.
Texas absorbed a huge number of bitcoin mining operations after the ban in China in May.
Four months later, Texas Governor Greg Abbott celebrated the passage of the Virtual Currency Bill that ‘legalized’ crypto.
“Texas should lead on this like we did with a gold depository,” said Abbott.
But gold has intrinsic value. Most people don’t own or use cryptocurrency.
Everyone and every thing uses electricity.
The Texas Blockchain Council projects cryptocurrency mining operations to quadruple in the state.
Texas will be the largest producer of Bitcoin in the world by 2024.
Inviting the world’s bitcoin miners to come suck up enormous amounts of electricity off the shaky Texas power grid that came dangerously close to collapsing during Snowpocalypse 2021 is foolish, outrageous and scandalous.
William Magnuson, an expert in cryptocurrency at the Texas A&M Law School, told CBS News:
“This will put a massive amount of stress on the Texas energy grid. We know the Texas energy grid has had its struggles in the last couple of years, so I do worry about the effects of imposing massive new energy use on a grid that we know is has been relatively unstable.”
Crypto mining was blowing up in the upstate New York town of Plattsburgh. But the city council had to ban crypto-mining in 2018 after everyone's electric bills soared.
A 2021 University of California Berkeley study showed:
"Bitcoin mining cost residents and businesses in upstate New York about $250 million a year in higher annual electricity bills.”
“Mining pushes up monthly electric bills about $8 for individuals, and $12 for small businesses."
Now consider right now in Texas - with the surging price of inflation and record-breaking demand on the electrical grid (and it’s not even summer yet) - that these bitcoin mining projects are currently being considered:
Austin Energy says investors want to build five mines in Travis County that will suck down 1,000 megawatts of electricity. That’s equal to about two-thirds of the city's current annual demand!
American Electric Power Co. is weighing requests from 75 to 100 Bitcoin miners to connect primarily across West Texas and is evaluating the need for upgrades to handle the mines.
Why is Austin’s municipal energy company eagerly inviting the five companies to mine bitcoin and suck up 66% of the city’s annual energy consumption, when the existing power grid just went down for four memorable days just 15 short months ago?
The only reasons Teddy can come up with are:
Greed and madness.
It will seem like total madness if everyone’s electricity bills go up by $120 per year as we experience rolling California-style blackouts in the supposed energy capital of the universe, all so a tiny handful of companies can get rich minting invisible coins that are considered “stable” if they only drop from $98 to $0.0001 in 30 days.
King Ercott must invest massive amounts of money in upgrading the Texas energy transmission system so these bitcoin miners don’t run out of power.
Ercot generously shares the cost for all these new upgrades with all Texas consumers, so their new utility bills get nice and plump.
This year, Ercot expects more than $4.5 billion in transmission charges to be distributed among users from factories to utilities.
Everyone in Texas is going to pay for the bitcoin mining explosion.
The only question is:
At what cost?