Facing Winter Storm, Crypto Mining Company In Texas Ready To Cease Operations

Crypto mines in Texas are ready to be shut down in anticipation of electricity due to winter storms. (photo: doc. unsplash)

JAKARTA - Winter Storm Landon is expected to hit the state of Texas this week. The warning saw major crypto mining companies shut down in anticipation of high demand on the state's power grid.

Speaking to Cointelegraph on Wednesday 2 February, Riot Blockchain Communications Director Trystine Payfer said the company's data center at Rockdale has had "99% of [its] power currently shut down" since the restrictions last Tuesday when demand on the network was expected to peak late Thursday.

Additionally, a Bitcoin (BTC) mining company with representatives on the Texas Blockchain Board sent a letter to the Governor of Texas, Greg Abbott, informing him that they plan to close or reduce operations in response to the need for ERCOT.

I urge all Texans to closely monitor weather conditions & heed guidance from local & state officials over the next few days.https://t.co/KMmmdSbIdB

— Greg Abbott (@GregAbbott_TX) February 1, 2022

“As Texans, we want you to know that we are actively monitoring the coming cold front, as we do on any seasonal weather event”, Texas Blockchain Council vice president Reed Clay said in a letter to Abbott shared with Cointelegraph.

“Similarly, we are taking proactive action to shut down operations, reduce loads and create additional capacity in response to ERCOT needs if needed”, the letter reads.

According to Payfer, the large Texas-based miner uses about 1 gigawatt to operate under normal conditions, which is allowed by the state's power grid. According to the ERCOT website, Texans use 35,016 megawatts. However, ERCOT forecasts suggest this demand could increase by more than 42% in the next 24 hours, peaking at 49,786 MW as temperatures drop to their lowest point: approx -8 C in Dallas.

“Just as important as the positive market signals we send to generators is our unique ability to immediately discharge the load when ERCOT requests it. This kind of request-response has been and should continue to be a powerful tool in any network management strategy”, the vein reads.

In 2021, millions of Texans will experience days without power as a result of a once-in-a-decade winter storm. This not only increased demand on the power grid operated by the Electric Reliability Council of Texas, or ERCOT but shut down many power plants, freezing generators, and otherwise disrupted the flow of electricity to many residents who needed heat.

Although many crypto mining operations call Texas their home, some experts argue that operations in the state are unlikely to have contributed to the blackout.

"I don't know if it's going to be any worse than last year", Payfer said. “I think we are seeing something similar or a little less judging from what has been communicated to us from ERCOT.”

In the past year, many regulators and crypto advocates in Texas have attempted to sell the state off as a fresh start for companies looking for new offices and headquarters. In March 2021, Governor Abbott described himself as a "supporter of crypto law proposals", apparently encouraging mining companies to set up shop in the state.

Lawmakers also passed legislation recognizing cryptocurrencies under Texas commercial law and set up a blockchain working group.