(Bloomberg) — Texas began requiring new large-scale cryptocurrency miners to apply for permission to connect to the state's power grid in anticipation of a flood of requests that are expected to increase electricity demand.
Texas Inc.'s Electrical Reliability Council requires utilities to submit studies on the impact of miners and other large users before they can obtain “approval to power,” according to a March 25 notice from the state's leading grid operator. Ercot members voted on Wednesday to form a working group and discuss the details of an interim plan that is ultimately meant to prevent the network from becoming overwhelmed.
The move is in reaction to an increase in demand expected for this year and next year from crypto miners. Meanwhile, Texas regulators are struggling to understand how miners will tax a network that had its vulnerabilities exposed during a deadly winter storm last year.
The latest measures are a radical change from previous practice, in which utilities conducted their own studies to determine whether their transmission and distribution systems should be updated, and then inform Ercot of the upcoming changes.
Crypto miners seek to add during 2022 and 2023, several gigawatts of demand, posing a challenge for a network operator who usually receives several years' notice from traditional industries that help him better plan for additional consumption.
“We are now starting a dialogue with Ercot to ensure that this does not cause delays for bitcoin miners,” Lee Bratcher, president of the Texas Blockchain Council, said Wednesday in an emailed statement.
Crypto companies are already being affected. Bitcoin miner Cormint received a notice from Ercot on Tuesday that his project outside Fort Stockton was reduced to 25 megawatts, said CEO James McAvity. The company already had 130 megawatt approval from its utility company, Texas-New Mexico Power Co., but will now need to undergo Ercot's review to increase its capacity, he said. The site is expected to start operating in a few months.
“I hope we have enough time to gain clarity and that it doesn't derail the investment,” McAvity said in an interview at a bitcoin conference in Houston. “If it takes three months, it will annihilate our project.”
Original Note:
Texas Bitcoin Mining Boom at Risk From New Grid Rules
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