Texas Bitcoin Miners Insist They Are Making the Power Grid Stronger. Guess Who Pays For the Upgrades?
Several people on Twitter have reacted to Teddy’s electrifying Substack post from last night - “Bitcoin Mining and Tesla Charging Could Take Down the Texas Power Grid” - by insisting that the massive increase of bitcoin miners in Texas is actually making the Texas power grid stronger.
This is a huge selling point pushed by the Texas Blockchain Council, a consortium of power-sucking, bitcoin mining, energy parasites.
The Texas Blockchain Council insists that ‘Bitcoin Mining is Strengthening the Grid"‘
“Most Texans don’t know that Bitcoin mining is strengthening the grid by turning off their machines when power spikes.”
“They also soak up stranded energy in rural areas, thereby incentivizing more power generation consumption including wind and solar.”
This statement defies logic.
If bitcoin mining and using enormous amounts of energy actually makes the grid stronger - why did so many places BAN bitcoin mining?
Why did cities across Iran face major blackouts when bitcoin mining was roaring, then the blackouts stopped after it was banned?
Plattsburgh, NY has access to a monthly quota of cheap power. But if they exceed that quota, it has to share the cost of buying power at much higher rates.
After the Bitcoin miners came to town, local Plattsburgh residents saw their electricity bills jump by 50% per month.
A better analogy for bitcoin mining:
Bitcoin miners are like the world’s greatest eater Joey Chestnut moving to Orlando and dining at the same all-you-can-eat shrimp buffet every single day for lunch and dinner to train for the Nathan’s Fourth of July hot dog eating contest.
Like bitcoin miners sucking up energy, Joey Chestnut sucks down massive amounts of shrimp.
Most customers eat 25 shrimp. Joey Chestnut eats 750 in one sitting.
After the first two meals, the shrimp shack owner approaches Joey Chestnut and asks:
“Have you ever seen that episode of ‘The Simpsons’ where Homer hires Troy McClure to sue the All-You-Can-Eat buffet?”
“Mr. Chestnut, I cannot afford to stay in business if you are going to chow down 1,500 shrimp a day,” says the owner.
Joey replies, “On the contrary, my friend. My presence here only makes your shrimp buffet stronger. The more shrimp I eat, the more shrimp you buy from your seafood guy. With more volume, you get lower prices. Plus, your cooks get more experience and your buffet will be much better prepared if you get a huge crowd. Like a tour bus.”
“But I’m going to have to raise the prices for all the other customers because you are eating 30 times more shrimp than I have forecasted for each customer. If I raise the price from $9.99 to $13.99, I will lose customers when everyone is watching every penny in this economy,” replied the owner.
“Sucks for them. Bring me another two bushels of shrimp. And make it snappy,” retorted Joey.
I must admit: Bitcoin mining can make the grid stronger.
But it’s by force and everyone has to foot the bill.
ERCOT and Texas utility companies will be forced to pay for billion-dollar upgrades to the antiquated electric grid to handle the surge in demand created by bitcoin mining data centers.
Instead of bitcoin miners footing the bill, the cost for an estimated $4.5 billion in power grid upgrades this year will be shared among all 26 million Texas energy consumers under ERCOT’s jurisdiction.
That means 90% of the state’s electricity consumers will be seeing sizable increases in their monthly electric bills.
Everyone gets a $100 higher annual utility bill, while bitcoin miners enjoy a sixfold return on their investment, turning cheap Texas electricity into digital coins.
“New investments in the transmission system are typically shared among Ercot’s consumers and show up in their utility bills.”
“This year, Ercot expects more than $4.5 billion in transmission charges to be distributed among users from factories to utilities.
How can Bitcoin miners say with a straight face that they are strengthening the grid by using up a ton of energy?
Based on this logic, the grid would get stronger during extreme weather events like Snowpocalypse or a 105 degree heat wave, instead of being five minutes away from going down.
Why did Iran suffer several months of energy blackouts before banning bitcoin mining, if bitcoin mining strengthens the grid?
Unless by “strengthening the grid” you mean “forcing Texas utility providers to spend billions of dollars in upgrades to handle all the power consumption from new bitcoin mining operations, or else the power might go out for a long time…”
How can bitcoin mining operations force ERCOT and Texas electric providers to make costly upgrades (or else), and then when those costs are passed along to 90% of Texas residential energy consumers, they proclaim:
“Guess who made the grid stronger? WE DID.”
Sounds like an energy Ponzi scheme worse than Luna coin.
China, Iran, India and Plattsburgh, New York all paid the price for this scam.
They learned the hard way that more bitcoin mining means higher electric bills, headaches and power outages.
Just this week, New York moving through a bill that would ban blockchain technology infrastructure, making it the first U.S. state to do so.
Seems like a weird coincidence. Wherever bitcoin miners set up shop, they end up getting banned within a few months.
Why would all these nations turn down the incredible opportunity to strengthen their electrical grids?
ERCOT is holding their next meeting with Texas Bitcoin mining operations this Tuesday, May 24.
They categorize bitcoin miners as “large flexible loads”. ERCOT anticipates these large flexible loads will collectively require as much as 17 Gigawatts of energy from the ERCOT grid by 2026.
“Texas utilities may have to figure it out largely on their own, weighing the cost of upgrades against long-term benefits like revenue that can be invested in protecting against outages.”
“It falls to the Electric Reliability Council of Texas, the state’s grid operator, to evaluate how Bitcoin mining will affect the power system.”
RECAP:
New investments in the Texas transmission system are typically shared among Ercot’s consumers and show up in their utility bills.
Bitcoin mining cost residents and businesses in upstate New York about $250 million a year in higher annual electricity bills
In 2022, Ercot expects more than $4.5 billion in transmission charges to be distributed from factories and utilities to Texas energy customers.
Bitcoin mining pushes up monthly electric bills about $8 for individuals, and $12 for small businesses
Austin Energy says investors want to build five mines just outside Austin that would need a total of 1,000 megawatts of electricity, equal to 2/3 of the city's current demand.
Guess who will pay for these upgrades?
Happy Saturday!
- TB