On November 29, 2022 the Electric Reliability Council of Texas (ERCOT) released a report discussing the regional seasonal assessment and adequacy of resources. The study revealed that Bitcoin mining operations can be flexible and might be beneficial to the Texas Grid during winter and peak load periods.
ERCOT Report Indicates Bitcoin Mining Operations Could Restore 1.7 GW of Power During Winter
The US-based organization Texas ERCOT, the electric power grid, published a study that showed Bitcoin mining operations are crucial in direct response systems. The study’s researchers looked at installed generation capacities based on historical data as well as extreme peak load scenarios. According to the report, Bitcoin miners could reduce their operations and provide approximately 1.7 gigawatts of power (GW) during the Texas winter.
Other large electrical loads can’t support direct response needs. Bitcoin miners, on the other hand, are known to shut down operations when they reach equilibrium prices between Bitcoin spot price and cost of production. “This break-even cost was estimated at $86/MWh and is based on the economics of an Antminer S19 Bitcoin mining rig in early November,” the ERCOT study detailed.
ERCOT isn’t the only network operator looking at direct response systems. Duke Energy Corporation, the second-largest US energy corporation, was reportedly interested in Bitcoin mining in July. Duke’s analyst claimed that the Bitcoin mining operations partnered with Duke to provide data for a study on Bitcoin demand response (DR). The provider of Bitcoin mining infrastructure Lancium revealed the same month how its Texas operations can be used to reduce the burden in DR cases.
Lancium has partnered with Texas battery storage provider Broad Reach Power LLC. The batteries will keep the grid afloat if damaged by extreme events. Lancium’s facility can run without reducing its computing speed, and network operators can also benefit from Bitcoin miners’ reliable income stream, which is based on their constant search for Bitcoins. The ERCOT study shows that even though Bitcoin miners are using electrical resources, grid operators think there will still be enough power this winter.
“Assuming that the ERCOT region experiences typical winter grid conditions, ERCOT anticipates that there will be sufficient installed generation capacity available to meet the forecast system-wide peak demand for the upcoming winter season, December 2022 through February 2023,” the report stated.
The news follows US legislators pressing ERCOT officials to provide information about Bitcoin mining operations. Politicians believe that Bitcoin mining causes so-called climate changes and that Bitcoin miners could potentially destabilize the Texas network. ERCOT’s new executive director stated to reporters that ERCOT is looking for a network “to be able to serve any company that wants to do business in Texas. And that includes cryptominers.”
The ERCOT report suggests that politicians may be wrong about their predictions of network instability, as Bitcoin mining facilities might be the only operation capable of addressing DR situations within a short time.
The 22-page ERCOT study on resource adequacy and seasonal assessment for the ERCOT Region can be viewed in its entirety here.
What do you think of ERCOT’s report? Do you consider Bitcoin mining operations as direct response systems? Please let us know what your opinion is on the topic in comments below.
