Texas Crypto Mining Will Need More Power than Houston by 2023

Texas is rapidly fulfilling its promise to become the crypto mining center of the universe, but an antiquated electricity grid that collapsed during a mid-winter freeze last year soon may force the state to make hard choices about who will foot the bill for an expansion of the transmission system. 

According to Texas grid operator ERCOT, cryptocurrency miners in Texas will be using an estimated 6 gigawatts of electricity by 2023—the equivalent of what it takes to power every home in the state’s largest city, Houston.

The Lone Star State has been greenlighting everything from micro-mining entrepreneurs operating a handful of servers to a 265-acre hyperscale data center complex under construction near Dallas that is expected to consume nearly a gigawatt of electricity at full capacity.

Colorado-based Riot Blockchain recently broke ground in Navarro County on its second hyperscale data center complex, a $333M project that will build four data center buildings, electrical substations and power transmission lines.

According to a report in Data Center Dynamics, Riot will power the facility with electricity from Priority Power, a utility that also provides electricity to Riot’s mining campus in Rockdale, TX. When the expansion near Dallas is completed in 2024, Riot Blockchain will have one of the world’s largest cryptocurrency mining operations, a total of 1.7 GW of capacity.

So far, the Lone State State isn’t requiring the burgeoning crypto industry in Texas to generate its own electricity, something Meta has been doing by investing in new, local renewable sources to power a growing network of hyperscale data centers that support its social media platform.

While West Texas is home to the nation’s most extensive smart grid for wind power, a $7-billion transmission system investment made nearly a decade ago, the decrepit state of the utility that provides the lion’s share of the state’s electricity achieved national notoriety during the winter in early 2021.

During a record freeze in Texas, more than 4.5 million homes and businesses were cut off by week-long power outages due to ERCOT’s frozen transmission system that had never been winterized.

An estimated 246 people died during the freeze, which was exacerbated by a decades-long refusal of the state government to authorize any connection between the ERCOT grid and the rest of the US transmission grid.

ERCOT, a.k.a. the Electric Reliability Council of Texas, says it’s forming a task force to estimate how many crypto mines will be hooked up to its grid in the near future, what upgrades will be needed to support them and how this will impact rising power bills for consumers.

ERCOT typically passes on the cost of improvements to its transmission lines to consumers across-the-board.