In bid to protect state’s power grid from collapse, energy-sapping Texas bitcoin miners paid to shut down

WASHINGTON – Some of the country’s largest and most energy-intensive cryptocurrency mining sites based in Texas are effectively getting paid by ratepayers to pause operations, as record temperatures put the state’s fragile electricity grid at risk of major blackouts.

The Electric Reliability Council of Texas, or ERCOT, which manages the state’s power supply, urged virtually all bitcoin mining to shut down during periods of peak electricity demand in a bid to protect the grid, reports Bloomberg News. Some forms of cryptocurrency mining, done with powerful computers, rely on fossil fuel energy that worsen the climate crisis.

Most of the paused Texas crypto mining operations entered an arrangement with ERCOT that provides robust financial incentives, meaning the companies were basically paid by Texas energy ratepayers to temporarily stop operations.

According to a spokesperson for Texas Blockchain Council, the move freed up more than 1,000 megawatts of electricity that can now be used for residents and businesses.

“This situation facing the residents of Texas should be a wakeup call for anyone who lives in a state where energy-sapping industrial bitcoin mining operations are located,” said EWG Senior Energy Policy Advisor Grant Smith. “The threat of blackouts and loss of electricity during extreme weather events can turn deadly fast.”

The incentives handed out to these mining operations in Texas contribute to the larger problem of pushing the costs of maintaining the electricity grid onto consumers instead of  utilities or industries with outsized electricity demand, like bitcoin miners.  

EWG and other advocates have warned about the problem of some energy-hungry digital currencies reviving coal-fired power plants and other dirty fossil fuel power generation methods that produce high levels of greenhouse gases.

In May comments to the Biden administration, the environmental watchdog Earthjustice said:

Despite this huge impact on the grid, the cryptomining industry has been arguing that proof-of-work cryptomining can “fortify” or “stabilize” the Texas grid. Grid experts are dubious. For example, a recent analysis by Professor Severin Borenstein of UC-Berkeley’s Energy Institute at Haas found that “[a]dding demand will just make a grid tighter and increase capacity problems.” In addition, it is patently unfair for miners to add enormous new loads on the grid and then seek to be paid, handsomely, to take that load off the grid during emergencies or peak times, at the expense of ratepayer.

In an April forecast, ERCOT predicted that by mid-2023, cryptocurrency miners would consume enough of the state’s electricity to power every home in Houston.

Bitcoin uses a software code, Proof of Work, or PoW, that requires the use of massive, electricity-intensive computer arrays to validate and secure transactions. According to estimates by the University of Cambridge, PoW operations currently use as much energy in a year as Greece, Sweden or the Netherlands. Yet bitcoin’s energy use is expected to continue to grow.

Other crypto currencies, like Ethereum, are transitioning from PoW to another method, Proof of Stake, which uses 99.9 percent less energy, thus avoiding PoW’s devastating climate pollution consequences and disastrous implications for electricity grids.

“The bitcoin community cannot continue to turn a blind eye to the economic and environmental justice impacts of its Proof of Work protocol on communities across the country,” Smith said. “Severe weather events will only continue with more frequency and severity, and bitcoin must play a role in mitigating the threat.”

In March, EWG, Earthjustice, Greenpeace USA and several local advocacy groups launched the CleanUpBitcoin campaign calling for digital currencies to use much less energy.


The Environmental Working Group is a nonprofit, non-partisan organization that empowers people to live healthier lives in a healthier environment. Through research, advocacy and unique education tools, EWG drives consumer choice and civic action.

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