Cryptocurrency boom could send Texas power grid beyond its capacity. Does ERCOT have a plan to avoid widespread outages?

Jalyn Smoot
ERCOT predicts record demand for electricity in Texas this summerImage Courtesy of WBCSD

Texas will demand more electricity than ever before this summer. As triple-digit temperatures become more frequent, Texans are expected to use a record-shattering amount of electricity to combat the heat.

This is according to projections shared Monday by the Electric Reliability Council of Texas (ERCOT), which oversees and manages the state power grid. Despite the anticipated record demand for electricity, ERCOT expects to have adequate power barring severe weather conditions.

As you may recall, the grid experienced major outages during the winter storm in February 2021. Millions of Texas residents were left without power or running water and were forced to endure historically low temperatures.

Last year's catastrophic and deadly snowstorm impacted most Texans served by the state’s main power grid, with almost 70% of those people losing power in subfreezing temperatures and almost half experiencing a water outage, according to a report from the University of Houston.

Eager to avoid another major blunder, ERCOT has already taken precautions to prepare for the record-breaking electricity demand this summer.

Earlier this week, ERCOT, which represents 90% of Texas’ electric load and serves more than 26 million customers, asked power generators to defer planned outages through Friday. The agency was concerned that the intense heat this week could create emergency conditions.

Aside from the demand created by the heat, ERCOT is also trying to equip the power grid to handle a rise in something else that is blazing hot right now- cryptocurrency.

ERCOT projects that the explosion of cryptocurrency could generate up to 16 gigawatts of new electricity demand by 2026, which accounts for roughly a quarter of the power grid's capacity.

For mathematics' sake, this would be enough electricity to power over 3 million homes on high-usage days.

Obviously, this is quite the spike in electricity usage, especially for something as relatively new as cryptocurrency. With that being said, cryptocurrency is experiencing a meteoric rise in popularity right now, so Texas needs to ensure that the grid is equipped to handle it.

ERCOT may also need to consider increasing the state power grid capacity to prep for the anticipated rise in crypto mining, which has been linked with power outages across the globe.

Last November, Kazakhstan faced widespread electricity shortages amid a surge in mining, as reported by the Financial Times. Kazakhstan has been dealing with an overloaded energy grid since miners migrated from China, which cracked down on crypto last year and banned crypto-based transactions in September 2021.

The country now sits in the number two spot — just behind the US — as one of the most robust crypto mining spots, according to data from the University of Cambridge.

During that span, Kazakhstan experienced outages at three of its major coal-fired power plants, leading the country to become more stringent with its crypto regulations.

Things have not yet escalated to that point in Texas, but the harmful nature of crypto mining is something ERCOT should keep top of mind when restructuring the power grid.

Having already struggled mightily in the past with managing the power grid, it will be interesting to see how ERCOT plans to handle this new surge in electricity demand.

With over 70% of Texas residents depending on them, one can only hope that the agency is much better prepared than they were a year ago with the winter storm.

Obviously, with massive, incoming heat waves this summer, the status of the grid will be paramount to Texas residents. If all systems go, Texas should be fine. If the grid is pushed beyond its capacity, however, things could go south very quickly.

For more information on ERCOT and its power grid management plans, you can visit its official website here.

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I write about Dallas and Collin County sports, politics, interesting people, and environmental issues. I strive to shine a light on issues that are still in the dark and help to give a voice to the voiceless

Dallas, TX

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