Posted Apr 14, 2023, 12:53 PM
Winter 2021. A cold spell in Texas disrupts electricity supplies, plunging tens of thousands of homes into darkness and cold. Forty people died on the first day of this storm. A very thorough investigation of «New York Times» points to an industry that has benefited from this crisis: bitcoin mining factories.
Very greedy in electricity, the latter continued to operate during the first hours of the storm, before the operator of the Texas electricity networks gave them the order to stop, which they did. But they were handsomely remunerated for this service rendered: in four days, Bitdeer, for example, received 18 million dollars in exchange for its inactivity.
Until June 2021, most bitcoin mining factories were located in China. After the country’s anti-cryptocurrency turn, justified in part by their excessive electricity consumption, dozens of them settled in the United States.
An “other New York City”
The “New York Times” has counted 34 of them, which consume a total of 3,900 megawatts of electricity. “It’s almost as much as the 3 million homes that surround them,” notes the daily. Or the equivalent of “another New York City” in terms of electricity consumption. In Texas, which concentrates 10 of these 34 operators, electricity prices have increased by 5% because of this additional demand, which costs 1.8 billion additional dollars to households in the state.
In general, any additional demand on the electricity grids is covered by coal or gas power plants (whose marginal production cost is higher than those of renewables, and which therefore start up as a last resort). An analysis by the association WattTime estimates that bitcoin mining operations add 16.4 million tonnes of CO2 per year… the equivalent of 3.5 million additional cars on the road.
Limited local benefits
Bitcoin industrialists defend themselves by saying that their case is no different from any other energy-intensive industry. Why target cryptocurrencies? Because this industry employs almost no one and almost only benefits the people who own the factories, responds the “New York Times”. The benefits for the local economy are extremely limited.
These factories also recoup subsidies by promising to disconnect their bitcoin miner computers when demand for electricity exceeds supply. In Texas, “several of them are paid by these agreements most of the time”, writes the newspaper. “Every year or so, the electricity network operators only ask them to disconnect for a few hours, and they are paid even more for that time. »
