While Texas is still struggling with having an efficient power grid, Cancun-loving Sen. Ted Cruz shares his view on an unconventional fix: bitcoin mining.
Bitcoin mining uses natural gas and invests in renewable energy to expand the energy grid’s capacity and reduce carbon emissions, a point of particular interest for Texas, whose grid collapsed when demand for power exceeded production capabilities during Winter Storm Uri in February.
However, the idea that magical internet money could save the state from another deadly blackout is a little more complicated than Cruz makes it out to be.
“Because of the ability of Bitcoin mining to turn on or off instantaneously, if you have a moment where there’s a power shortage in a power crisis, whether it is a freeze or some other natural disaster where power generation capacity goes down… they become excess reserves that can strengthen the grid’s resilience by providing a significant capacity of additional power to be available for critical services if and when it’s needed,” Cruz said at a conference on Oct. 8.
That is an alluring idea, but in reality, bitcoin mining in Texas would increase demand for electricity, and instead of running air conditioning in a heatwave, that demand is for something totally nonessential. For an already stressed grid, that seems like a bad idea.
There is merit to the idea that more flexible demand makes it easier to balance the ups and downs of supply when wind and solar vary or when coal and gas and nuclear plants fail,” said Daniel Cohan, associate professor of environmental engineering at Rice University. “But just adding brand new demand to the grid isn’t helpful, or doesn’t fix the shortfalls.”
When the grid is overwhelmed and miners have to shut down their operations to make the energy they would normally consume available for other services, some are selling their power supplies back for a hefty profit. In February, generators brought more power online but charged outrageous prices. In the end, ordinary people had to pay for it in the form of five-figure energy bills for the month.
As Bitcoin and other cryptocurrencies’ worth has skyrocketed over the past year, it’s become somewhat of a talking point for Cruz. According to The Dallas Morning News, in August, he proposed an amendment to the $1 trillion infrastructure package in the Senate that would strike a measure of the bill regulating cryptocurrency.
“There is a new and exciting industry in the United States of cryptocurrency, that is generating jobs, entrepreneurs who are creating new values. … It is dynamic,” Cruz said on the Senate floor. “And this infrastructure bill … has one little portion in there designed to obliterate cryptocurrency.”