Aug 3, 2022
Bitcoin Miner Made Millions in Credits by Shutting Rigs During Texas Heat
(Bloomberg) -- Riot Blockchain Inc. earned about $9.5 million in credits last month from shutting down its Bitcoin mining rigs at a Texas facility while the region weathered a historic heatwave.
The power credits as a result of curtailment activity to be credited against its power invoices, which equates to the value of about 439 coins. It also mined 318 coins during the month, according to Riot’s monthly production and operations update.
The publicly traded miner has a 750-megawatt facility and is building another one-gigawatt site in the Lone Star State, which are two of the largest mining farms in the world. Nearly all industrial scale miners shut down their rigs in Texas as the state had a sever power crunch due to a record heatwave in early July.
While the power crunch sent electricity prices soaring and made Bitcoin mining operations unprofitable, some large-scale miners were able to sell electricity purchased earlier at a lower price back to the grid with a premium.
Low Bitcoin prices and the energy price hikes due to the Ukrainian war and heatwaves have significantly compressed miners’ revenue in recent months. Large miners are selling their mined coins to maintain cash flows and fund the expansion they planned during the last bull run.
Such miners could cover part of the losses due to high energy prices and halted operations and even make a profit depending their power purchase agreement, Gregory Lewis, an analyst at BTIG, wrote in a research note.
Riot is participating in the Four Confident Peak program from the state power operator the Electric Reliability Council of Texas, where the company’s 750-megawatt Whinstone Facility in Rockdale, Texas, will curtail consumption when called during the four summer months of peak energy demand.
The company sold 275 mined coins for the net proceeds of about $5.6 million in July, its 318 Bitcoin it mined represents a decrease of 28% in production compared to the prior month, according to the update.
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