Crypto Is Straining the Power Grid. Congress Wants to Rein It In
All of the companies included in the investigation were asked to explain “the impacts of your facilities on energy costs to local families and businesses,” but none could describe any existing estimates or models that tracked those impacts. Those who engaged with the question said this was because they didn’t expect to have a noticeable effect on costs of consumer energy bills. One firm, Bit Digital, said it would be counterintuitive to study its own impact on local families and businesses, because firms are intentionally located in rural areas with excess power supply and limited demand—taking up empty space not being used on the power grid, not competing with consumers for power.
Bit Digital’s chief strategy officer, Samir V. Tabar, criticized the letter from Warren, et al. for being “silent on” data provided that shows how the crypto-mining firm stokes job creation “in dilapidated economies while utilizing unwanted power infrastructure.” Tabar says that Bit Digital is “happy to help shape the industry by being leaders in using sustainable sources of power,” and the firm was “hoping the Senator would see our efforts there.”
Because data is so underreported, it remains difficult to forecast how local residents and businesses will be impacted by projected growth of these firms. Some firms said that because of commitments by crypto-mining firms to shift to renewable energy sources, things could change so fast that any existing data cannot be reliably used to forecast how US citizens will be impacted. At least one firm, Stronghold Digital Mining, claimed that “the multitude of factors that impact residential electricity costs,” such as “natural gas prices, temperature fluctuations, and other factors,” make it “difficult to attribute any change in local electricity costs” to crypto mining. (Stronghold did not immediately respond to a request for comment.)
The congressmembers believe that requiring reporting is the answer. They’re especially concerned about residents and businesses in states like Texas, where “relatively cheap electricity costs” are attracting “an influx of crypto-mining companies,” which could potentially “add to the stress on the state’s power grid.”
Future of Cryptocurrency in the US
Warren, et al. say that since 2019, global power consumption from bitcoin mining alone “increased nearly four-fold”—which basically erased “the total reductions in greenhouse gas emissions attributed to electric vehicles.”
In their responses, crypto-mining firms pushed back against environmental complaints by pointing out that their goal is to spend as little money as possible on power, and thus, the biggest firms are highly motivated to switch to renewable energy sources. That, firms claimed, could help the US achieve its renewable energy goals if the US supported the expansion of crypto mining, rather than restricting or banning it as China has done and India is trying to do.
Firms also say that due to agreements between power companies and crypto-mining firms to shut off miners’ power when there’s a spike in energy demand on the grid, firms help to stabilize energy supply and decrease consumer costs. Bit Digital even suggested that lawmakers consider rewarding miners participating in these programs and encouraging more cities to adopt crypto-mining partnerships. Crypto miners’ hunger for growth and incentives seems, predictably, boundless.
Energy security remains a top US priority for most Democrats, and helping officials understand how digital currency works will remain an important part of the country’s energy use equation. By the end of the summer, congressmembers expect the EPA and DOE to reveal how they plan to ramp up reporting on crypto mining in the US. If the agency response is timely, that update should arrive ahead of President Joe Biden’s request for a September report that will explain, in part, the energy policy implications if the US adopts a central bank digital currency in the coming years.
This story originally appeared on Ars Technica.