Texas Bitcoin miners have cut back 90% of their operations during the energy crisis after the state offered $31.7 million in energy credits.
Amid an escalating power crisis driven by extreme weather conditions, Texas has turned to an unlikely ally for energy conservation: Riot Platforms, a major Bitcoin (BTC) mining firm.
The state’s power grid operator has awarded Riot Platforms $31.7 million in energy credits for reducing electricity consumption during the ongoing heat wave. The sum eclipses the $9.7 million worth of Bitcoin the company mined in the same period.
The credits are commissioned by the Electric Reliability Council of Texas (ERCOT), and it will alleviate immediate stress on the grid while simultaneously lowering Riot’s operational costs.
Despite reporting a loss of over $500 million in 2022, Riot Platforms has found a silver lining in these energy credits. In its most recent quarter, the Bitcoin mining company posted a loss of around $27 million on revenue of $76.7 million. The energy credits, therefore, offer a much-needed financial cushion.
Legislative and public backlash against Bitcoin mining
The state’s power infrastructure has been under increasing strain, worsened by climate change and surging demand. Last year, a snowstorm led to widespread blackouts, affecting both residential and commercial consumers. ERCOT’s recent emergency declaration, urging Texans to conserve energy between 5 p.m. and 9 p.m., underscores the ongoing challenges.
During this crisis, allocating taxpayer-funded energy credits to Bitcoin miners has ignited public debate. A petition from Navarro County residents garnered nearly 1,200 signatures, opposing a local Bitcoin mining facility and citing concerns over the “enormous burden on our already fragile infrastructure.”
State lawmakers are also taking note. Earlier this year, the Texas Senate passed legislation restricting incentives for cryptocurrency miners participating in ERCOT’s load-reduction programs.
The Bitcoin mining industry has been at the center of controversy, particularly in Texas, where the state’s energy woes have been exacerbated by the sector’s high electricity consumption. Riot Platforms and other large-scale miners like Marathon Digital Holdings have been forced to halt operations during past emergencies, affecting their profitability and sparking debates over their role in the state’s energy landscape.