- Texas’ electrical grid is in trouble, and Republican Senator Ted Cruz believes bitcoin may help.
- The grid is known as ERCOT, which stands for the Electric Reliability Council of Texas, which is in charge of its operation.
- ERCOT is responsible for around 90% of the state’s electricity. The grid’s effective operation necessitates a perfect supply and demand balance.
Aim to fix the fluctuating Energy Prices
TEXAS, AUSTIN – The Texas power infrastructure is beset by erratic energy prices and intermittent service, but the state’s burgeoning bitcoin mining sector believes it can help.
Senator Ted Cruz, a Republican, agrees. At an event in October, Cruz said, “A lot of the talk around bitcoin regards bitcoin as a consumer of energy.” “The viewpoint I’m advocating is the polar opposite, which is that it’s a means to build our energy infrastructure.”
The grid is known as ERCOT — short for the Electric Reliability Council of Texas, which is in charge of running it — and it’s finicky and unpredictable.
ERCOT provides electricity to nearly 90% of the state, but it requires a perfect balance of supply and demand to function properly. It’s just as bad to have too much power and not enough buyers as it is to have everyone wanting to turn on their air conditioners on the same day in July.
This year, maintaining that balance has proven to be a genuine problem, and Texans are suffering the effects.
The price of electricity per hour fluctuates wildly, frequently falling below zero. Rolling blackouts during peak electricity use are no longer unexpected. After a multi-system breakdown caused by a winter storm earlier this year, many people lost faith in the grid. This happened just minutes before a much more significant and maybe complete blackout.
Not risking the future
Crypto aficionados feel that the solution to this problem is to introduce a new electrical consumer into the mix, one who will use as much power as is offered, regardless of the time of day. And these buyers are just as willing to turn off the lights in a matter of seconds. Bitcoin miners are these adaptable purchasers.
The computationally difficult process of creating new tokens and verifying transactions of existing digital money is known as cryptocurrency mining.
Cruz mentioned bitcoin miners’ capacity to turn their rigs on and off in seconds during the Texas Blockchain Summit in October. This capability comes in handy when energy needs to be moved back to the grid to satisfy demand.
“Miners are a strain on the grid, not a help,” Wood Mackenzie’s Ben Hertz-Shargel, a commercial intelligence supplier for the world’s natural resources sector, said. Hertz-Shargel is concerned that bitcoin mining will just increase peak demand, putting the grid under further strain.