[anonym29]

I'm not the person you're replying to, but I do have a source that talks about how BTC mining in Texas helps normalize and "smooth" usage.

Electricity is complicated so this is a broad and major oversimplification, but:

1. It's bad™ for a grid to be producing more electricity than it's using, or vice versa

2. TX has a highly variable grid load, in part due to Very Hot Weather™ compared to much of the rest of the country

3. TX, perhaps unintuitively, is [one of the largest? maybe the largest?] (haven't checked in a while) producers of solar and wind energy, but these sources are highly variable compared to fossil fuels, hydro, nuclear, etc.

4. Importantly, peak production and peak demand in TX are VERY mismatched

5. It's hard™ to store excess energy from times of peak production to use in times of peak demand

6. BTC mining, in the right places at the right times, help smooth the imbalances resulting from point 4, which are bad™ as mentioned in point 1, avoiding the hard™ problem of storage from point 5

The net result of all of this is that the "smoothing" effect of BTC mining (in the right places, at the right times) makes it more economically viable to change the makeup of energy production to favor a larger share of renewables and a smaller share of fossil fuels.

This isn't exactly the same as what the original commenter you're replying to is saying, but it's progress towards decarbonization of the grid nevertheless.

Source: https://www.coindesk.com/consensus-magazine/2023/07/24/how-t...

For the people downvoting, could you please share why? If I'm doing a poor job of explaining/communicating anything, I'd appreciate being informed about what part in particular, so I can try to do better.

[mikeryan]

The problem with your argument and the point of the article is #6

Selling excess energy to bitcoin miners is fine. Having to pay them off when the grid is overloaded because they can’t turn their damn servers off for a week is what smells like the rest of the crypto bullshit.

[anonym29]

> Having to pay them off when the grid is overloaded because they can’t turn their damn servers off for a week is what smells like the rest of the crypto bullshit.

There seems to be a misconception here.

The miners are being paid rebates to do precisely that - turning off their servers. They're being given credits to not use electricity at times when demand is high and renewable supply is low.

This is part of what allows the renewable energy to make up a larger share of Texas' energy production in an economical way.

Without the ability to rapidly raise ("Quick, turn the bitcoin miners on!") and lower ("Quick, turn the bitcoin miners off!") energy demand in this manner, there is a lesser need for variable production (solar and wind) and a greater need for "constant" production (oil, gas, nuclear). Note that these types of production can be turned on and off the same way bitcoin miners can, but doing so is much slower and is actually so costly that it's cheaper to decrease the share of energy produced by "constant" production sources, increase the share of energy produced by variable renewables, and simply pay the bitcoin miners to turn their racks and racks of SHA-256 ASICs on and off at precisely the right times and places. It's WAY easier, cheaper, faster, and safer to make adjustments to the "demand" side than it is to make adjustments on the "supply" side.

I know it sounds really counterintuitive and complicated but this really is better for the environment - it leads to less burning of fossil fuels and lower costs for taxpayers than the alternative of not having any bitcoin miners in Texas.

Please give that article I linked a read if you have the time, that goes into much more depth about all of this.

[nullc]

You're getting confused by accounting here. Charging someone regular rates but then making payments for them to shut off during high demand is equivalent to the customer being charged lower rates for excess power.

The utility prefers the former model because it avoids normalizing low rates, avoids running into issues with most-favored-nation terms in contracts, gets them paid upfront while they pay out the correction only when it was actually needed, doesn't run into problems with "what if they don't actually turn off during the high demand but you still charged low rates the last N months", etc.

But what's happening is equivalent to "utility sells spare capacity to bitcoin miners at discounted rates" which is hardly remarkable.

[brutusborn]

The reason they are one of the first to turn off is _because_ they can turn their servers off easily. This is why crypto mining is perfect for this application.

Some industrial processes take days or weeks to fully shutdown / startup so quick shutdown isn't practical.

If your business was shutdown for the greater good, would you not expect some compensation?

[blangk]

Why should it only work one way? Aren't there subsidies across many industries in attempt to align common good?

[brahbrah]

Mining is not needed to keep the grid reliable or smooth imbalances. You can achieve this by dispatching or cutting off the marginal generators needed to serve the load in real time (the marginal generators serving the load of these facilities are already quick response generators that don’t benefit from already being on and switching from mining facility to demand bursts elsewhere). They increase demand and necessarily move dispatch up the supply stack, increasing the marginal power price which sets the clearing price for all megawatts in the iso auctions and consequently the power prices for all customers. They also increase congestion by requiring more megawatts to flow increasing the congestion price component of the nodal LMPs (locational power prices).

Here is how prices are set in an iso auction. This is from iso New England. But works the same way in all isos including ERCOT.

https://www.iso-ne.com/about/what-we-do/in-depth/how-resourc...

It doesn’t matter to me if the mining operations are running or not, but they’re not helping the grid. Citing a crypto company on this is comically biased.

[JKCalhoun]

Now if only they could use something like ... an aluminum recycling plant instead of Bitcoin miners.

[anonym29]

Bitcoin mining has a somewhat unique property among energy demands - it is essentially location agnostic. Bitcoin miners do not care where they are mining, they care only that energy is cheap. This enables their strategic geographic placement ("in the right places" is just as important as "at the right times").

An aluminum recycling plant sounds much more environmental on paper, but does it still sound as good if you put it in the middle of the desert in west TX and needed to ship aluminum cans in on semi trucks?

[JKCalhoun]

For high energy processes like aluminum recycling, extraction, I suspect the transportation energy is in the noise.

And if matters only that this "energy consumer" be on the grid, I suspect there are plenty of convenient multimodal transport hubs in the state of Texas where an aluminum recycling plant could go up to save on transport costs.

[anonym29]

> And if matters only that this "energy consumer" be on the grid

This is not the case. The actual physical, geographical location matters, because energy transmission over long distances (like from the middle of a desert in far West TX to major population centers like Dallas or Houston many hundreds of miles away) has significant (on the scale of electricity prices) costs.

Don't forget either that when I talk about transportation costs, I'm not simply referring to energy consumption, but also carbon emissions. In the future it may be different, but as of right now, the semi trucks carrying those aluminum cans into a desert in west TX (and carrying the refined aluminum out of a desert in west TX) are spewing (literal) tons of greenhouse gasses, particulate matter pollutants, etc into the atmosphere. This would be a small fraction of the GHG/emissions IF the primary energy consumption device in question (btc miners, aluminum recycling plant) was running primarily on GHG itself, but the entire point here is that's NOT the case - those BTC mining plants are in places with high shares of renewable energy where electricity costs get extremely low during periods of high production and low demand.

[p1mrx]

The problem with this argument is that whenever a grid burns fossil fuels, the price of electricity is artificially cheap, because nobody is paying the cost to remove carbon from the air.

A grid that simultaneously burns fossil fuels and mines BTC indicates a market failure. The miners are effectively stealing BTC from our children.