While its analysis is preliminary, the Energy Information Agency (EIA) estimates that large-scale cryptocurrency operations are now consuming over 2 percent of the US’s electricity. That’s roughly the equivalent of having added an additional state to the grid over just the last three years.
The world has changed since China banned cryptomining, the Guardian reports. And now “more than a third of the global computing power dedicated to mining bitcoin comes from the US, Senator Elizabeth Warren and five other Democrats reported in a letter to the Environmental Protection Agency…”
But the Guardian also notes there’s two problems with this:
– The largest US cryptomining companies have the capacity to use as much electricity as nearly every home in Houston, Texas; energy use that is contributing to rising utility bills, according to an investigation by Democratic lawmakers…– “The results of our investigation … are disturbing … revealing that cryptominers are large energy users that account for a significant — and rapidly growing — amount of carbon emissions,” the letter states.
“It is imperative that your agencies work together to address the lack of information about cryptomining’s energy use and environmental impacts.” The congressional Democrats have asked the EPA and the Department of Energy to require cryptominers to disclose emissions and energy use, noting that regulators know little about the full environmental impact of the industry….
The power demands of the industry are also coming at a cost to consumers, the letter states, citing a study that found cryptomining operations in upstate New York led to a rise in electric bills by roughly $165m for small businesses and $79m for individuals.
The main operator of Texas’s grid admitted this week to the Verge that by 2026 crypto mining is set to increase demand on the state’s power grid by a whopping 27 gigawatts — or nearly a third of the grid’s current maximum capacity.
And an associate professor at Rochester Institute of Technology with a background in electricity system policy warns the site that “The more crypto mining that comes into the state, the higher the residents should expect the electricity prices to become.”
“Record-breaking heat across Texas has pushed its fragile power grid to the brink,” reports NBC News. “But extreme temperatures are doing something else in the famously pro-business state: stirring opposition to energy-guzzling crypto miners who’ve flocked there seeking low-cost energy and a deregulatory stance.”
Ten industrial-scale crypto miners will consume an estimated 18 gigawatts in years to come — though the state’s current capacity is around 80 gigawatts (though it’s expected to grow).
The case against them?
The energy crypto miners use puts “an almost unprecedented burden” on the Texas grid, according to Ben Hertz-Shargel, global head of Grid Edge, a unit of Wood Mackenzie, an energy consulting firm. Mining “pushes the system closer to dangerous system peaks at all times,” he told NBC News. “It is completely inessential and consuming physical resources, time and money that should be going to decarbonize and strengthen the grid….”Unlike other electricity systems, the Texas grid does not connect to other states’ grids; that means it cannot receive power from other areas in emergencies. Because of their high demand for electricity, crypto miners raise costs for other consumers of power, Hertz-Shargel said. And, on the Texas grid, miners can get paid for powering down during peak demand periods, like the one that recently hit the state. Miners and other industrial customers with these types of arrangements receive revenues for not using electricity; the costs of those revenues are passed on to other electricity customers…. During peak periods, miners can also resell to the grid the electricity they would otherwise have used. Because their contracts can let them buy power at low cost, energy resales when demand is high can generate significant financial benefits in the form of credits against future use….
Electricity customers across the state will cover those credits, said Andrew Dessler, professor of atmospheric sciences at Texas A&M University. “Ratepayers in Texas are going to be paying it off a little bit every month for decades,” Dessler said. “It angers me so much.”
But Lee Bratcher, founder of the Texas Blockchain Council, makes the case for industrial-scale bitcoin mines:
Bratcher and the crypto miners he represents say they provide three benefits to Texas. Because they can turn off their electricity use during high-demand periods, they can help stabilize the grid and rein in runaway power prices. “Power pricing is set off at peaks and the miners are specifically trying to turn off during peaks,” he said. In addition, crypto miners’ 24/7 demand for electricity can provide an incentive for wind and solar developers to bring more green power to the grid while new jobs and tax revenues “lead to orders of magnitude of human flourishing in communities where the mines set up,” Bratcher said.Still, 800 locals have signed a petition against plans to built America’s largest bitcoin-mining facility — a facility which will consume 1.4 million gallons of water a day and 1 gigawatt of electricity (enough to power 200,000 homes).
Jackie Sawicky, a small-business owner, is organizing the opposition to the Riot facility. “There are over 7,000 people in poverty and 8,000 seniors living on fixed incomes here,” she told NBC News. “We cannot afford increased water costs and electricity.”According to a 2020 economic impact report commissioned by the Rockdale Municipal Development District, an entity run by area businesspeople, the facility will deliver an estimated $28.5 million in economic benefits to the community over 10 years. The operation employs “nearly 200 full-time benefited employees…”
In a normal year, demand for electric power in Chelan County grows by perhaps 4 megawatts — enough for around 2,250 homes — as new residents arrive and as businesses start or expand. But since January 2017, as Bitcoin enthusiasts bid up the price of the currency, eager miners have requested a staggering 210 megawatts for mines they want to build in Chelan County. That’s nearly as much as the county and its 73,000 residents were already using. And because it is a public utility, the PUD staff is obligated to consider every request.
The scale of some new requests is mind-boggling. Until recently, the largest mines in Chelan County used five megawatts or less. In the past six months, by contrast, miners have requested loads of 50 megawatts and, in several cases, 100 megawatts. By comparison, a fruit warehouse uses around 2.5 megawatts.
Iceland is expected to use more energy ‘mining’ bitcoins and other virtual currencies this year than it uses to power its homes.
With massive amounts of electricity needed to run the computers that create bitcoins, large virtual currency companies have established a base in the North Atlantic island nation blessed with an abundance of ‘renewable energy.’
The energy demand has developed because of the soaring cost of producing and collecting virtual currencies. Computers are used to make the complex calculations that verify a running ledger of all the transactions in virtual currencies around the world.
Among the main attractions of setting up bitcoin mines at the edge of the Arctic Circle is the natural cooling for computer servers and the competitive prices for Iceland’s abundance of renewable energy from geothermal and hydroelectric power plants.
Johann Snorri Sigurbergsson, a business development manager at the energy company Hitaveita Sudurnesja, said he expected Iceland’s virtual currency mining to double its energy consumption to about 100 megawatts this year. That is more than households use on the island nation of 340,000, according to Iceland’s National Energy Authority.
Pirate Party legislator McCarthy has questioned the value of bitcoin mining for Icelandic society, saying residents should consider regulating and taxing the emerging industry.
“We are spending tens or maybe hundreds of megawatts on producing something that has no tangible existence and no real use for humans outside the realm of financial speculation,” he said. “That can’t be good.”