Bitcoin Miners Went Dark as Texas Power Grid Teetered on Brink

Naureen S. Malik, David Pan and Joe Carroll, Bloomberg News

Mining units at the Cormint Data Systems Bitcoin mining facility while under construction in Fort Stockton, Texas, U.S., on Friday, April 29, 2022. Cryptocurrency miners who have descended on remote parts of Texas to feast on cheap electricity and inexpensive land are finding themselves surrounded by dusty fields with hardly any residential housing. Photographer: Jordan Vonderhaar/Bloomberg , Bloomberg

(Bloomberg) -- Bitcoin miners in Texas curbed operations, crimping power usage, as a heat wave drove electricity prices sky-high Tuesday and threatened to cripple the grid in the second-largest US state.

The extent of the intentional shutdown and the amount of power conserved for other uses — such as residential air conditioners, medical centers and municipal water systems — was not yet immediately clear. But the curtailments were confirmed by industry participants and grid manager the Electric Reliability Council of Texas, or Ercot.

Major power users such as bitcoin miners are eligible for hefty payouts if they scale back consumption when Ercot requests it.

“Prices were elevated and the nature of the incentive programs available to all Ercot citizens, not just Bitcoin miners, resulted in most or all large flexible loads being off,” a spokesperson for the Texas Blockchain Council wrote in an email. “Load” is power-industry jargon for electricity supplies.

Texas was perilously close to a power crisis Tuesday evening as demand spiked and available supplies dipped as solar output fell with the setting sun. At one point, spare electricity supplies shrank to just 2% of overall capacity.

“It appears most crypto sites appeared to have dropped virtually all their load,” Ercot spokesperson Christy Penders wrote in an email.

Read More: Texas Power Prices Soar 80% in a Matter of Hours Amid Heat Wave

The Lone Star State has been one of the favored destinations for bitcoin miners because of its long history of cheap electricity supplies. The notoriously energy-intensive industry’s Texas operations can consume more than 2 gigawatts at their peak, enough to power about 400,000 homes.

--With assistance from Shelly Hagan.