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Texas has become home to cryptocurrency mining companies thanks to the state’s cheap electricity.
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The energy involved in these operations has increased costs for electric customers across the state.
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These could add up to an extra $1.8 billion a year, according to a simulation done for the New York Times.
If you live in Texas and have noticed that your energy bill has increased over the past year, cryptocurrency mining could be a contributing factor.
Since 2021, a number of bitcoin mining companies have moved to Texas and are causing an increase in energy use that could lead to a 5% annual increase in electric bills for Texas electric customers – or an extra $1.8 billion annually – according to a simulation performed by energy research and consulting firm Wood Mackenzie for the New York Times.
When you factor in the more than 26 million customers of the Electric Reliability Council of Texas, or ERCOT, that’s an extra $69 per annual bill.
The costs show how the presence of cryptocurrency mining in the state impacts all residents of the state.
Riot Platforms, which operates the state’s largest mine in Rockdale, uses as much electricity as the nearest 300,000 homes, according to the Times.
“The alleged increase in energy bills was created using a proprietary black box simulation, not real-world data, and the NYT and its sources have not made the data publicly available so it can be properly challenged,” he said. a Riot Platforms spokesperson. he told Insider.
The company didn’t respond when asked to detail how much energy it uses.
In 2021, China cracked down on cryptocurrencies. Financial institutions and payment companies were banned from facilitating cryptocurrency transactions in May of that year, and just four months later another ban was issued which prevented cryptocurrency transactions and cryptocurrency mining in the country. according to Reuters.
Cryptocurrency mining companies had to move elsewhere, and some rural Texas counties have welcomed these companies.
Milam County, for example, which was home to a thriving aluminum plant that closed in 2008, offered Riot Platforms “a 45 percent discount on local taxes for 10 years,” according to the Texas Tribune.
In addition, the state’s cheap electricity costs have made it a desirable location for these companies, Carey King, deputy director of the Energy Institute at the University of Texas at Austin, told the Texas Observer.
However, the energy required to mine cryptography, which involves a number of interconnected servers solving increasingly difficult mathematical problems, is significant. Not only do the machines that process cryptocurrency transactions require energy, but these data centers also need to be cooled.
The energy costs associated with these fall on everyday Texans, who are already seeing their electric bills rise due to severe weather swings that have put strain on the state’s energy grid.
“Texans continued to experience high electric bills due to a number of factors,” an ERCOT spokesperson told Insider.
The spokesman cited weather and fuel prices as the main reasons for the increase in electricity bills.
In February 2021, arctic weather hit the state, leading to increased demand for energy to keep heat in residents’ homes, which caused statewide blackouts. Then, in July 2022, mining companies were asked to shut down operations to reduce strain on the power grid as temperatures soared across the board, threatening the possibility of power outages.
Read the original article on Business Insider
