Governor Greg Abbott, who has sought to make Texas a major crypto hub, is worried that the new influx of crypto miners in the state could put too much stress on the power grid.
It has come to light that Governor Greg Abbott of Texas pleaded with miners in October 2021 to shut down operations during the U.S. winter. This is almost certainly an attempt to avoid another disastrous outage after hundreds died in February 2021 due to the Texas power grid buckling under high demand.
Should these companies see the grid failing, they are requested to shut down. Bloomberg reported that two companies said they would shut down should the grid come under too much pressure.
According to the Texas Blockchain Council, there are seven large crypto mining companies and more than 20 smaller ones in the state.
Despite crypto influx, no commitment to build new power plants yet
Governor Abbott welcomed miners into the region, hoping that the increased demand would push power companies to construct additional power plants. Crypto industry stakeholders were instrumental in shifting Abbott’s view regarding this. Specifically, Lee Bratcher, president of the Texas Blockchain Council, has met with Abbot several times regarding bitcoin’s positive influence on the grid. Bratcher sees an opportunity in the bans enforced by other countries like Kazakhstan and China.
Regrettably, Abbot and the industry face a problem. Power producers may not just accede to his request to build more plants. Also, there hasn’t been much improvement of the ailing infrastructure since an icy storm left many Texans freezing last year. Repairs to damaged equipment have been thoroughly carried out, according to Abbott.
Thoughtful approach required, says energy expert
Abbott tweeted last June that Texas was open to crypto. The state also created permissive regulations for digital assets, coupled with a deregulated grid to attract mining activity. Sixty percent of Texans polled did not have kind words to say about the management of the grid, however.
It seems odd that bitcoin miners can decide whether to switch off or not with no legislative compulsion. It appears that a prediction from the Electric Reliability Council Of Texas regarding the quintupling of mining energy requirements is falling on deaf ears. Doug Lewin, an energy consultant, says, “There has to be a really thoughtful approach to bringing gigawatts worth of bitcoin onto the system.” He opines that lawmakers need to make it compulsory for miners to shut down; “we’ve got to make sure that if we’re getting close to scarcity, people are not mining bitcoins anymore.”
Abbot faces re-election against stiff competition this year. He will go up against someone from his own party during the Republican primary on March 1, 2022, and up against Democrat Beto O’ Rourke in November 2022. No doubt, the grid infrastructure following last year’s storm will be a weapon in the arsenal of his opponents.
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