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During a public hearing before the Texas Senate Business and Commerce Committee on June 12, the Public Utility Commission (PUC) and the Electric Reliability Council of Texas (ERCOT) reported that Texas energy demand is expected to nearly double by 2030.

Current demand is around 85 gigawatts, but is expected to increase to 150 GW in the next half of the decade.

Who is gobbling up all those gigawatts? Bitcoin, it seems. More than 50% of this new demand is expected to come from the growing number of crypto mining operations and data centers in the Permian Basin. Crypto mining is the process by which transactions are entered into the blockchain and also puts new bitcoins into circulation.

Currently, almost all industrial electricity demand in the Permian comes from oil and gas (and that demand is expected to expand as these industries do so too), but in recent years crypto mining has been growing from constant way. their equipment, meaning bitcoin miners will have competition for an already scarce resource amid increasingly hot summers. Frackers in West Texas are using electricity equivalent to nearly four Seattles a day, the Wall Street Journal reported in January.

Texas energy isn’t the only thing that crypto mining operations consume at an outsized rate. Last fall, it was discovered that in August 2023, ERCOT had paid bitcoin mining company Riot nearly US$32 million to conserve energy during periods of peak grid voltage. During the 2021 winter storm, the Bitdeer mining facility near Riot – which, combined with Riot, uses the same amount of energy as the 300,000 surrounding homes – received $18 billion from the state. This practice is understandably irritating to the average utility customer, who has been paying much higher bills while being repeatedly asked to turn off the air conditioning in the middle of triple-digit summer heat.

Last week, Lieutenant Governor Dan Patrick took to Twitter to say that ERCOT’s testimony was “shocking” and that “we need to take a closer look” at crypto miners and data centers, saying the industries “produce very few jobs compared to the incredible demands they place on our network. I’m more interested in building the grid to serve customers in their normal homes, apartments and businesses and keep costs as low as possible for them, rather than for niche industries that have massive energy demands and produce few jobs.”

In addition to the expansion of industries in the state, the population of Texas is expected to reach 50 million people by 2050. In response to this incredible demand, the Senate implemented an incentive subsidy program for the construction of new dispatchable generation facilities before the last session of 2029. In a statement may 31stPatrick reported that 81 gas companies have applied for low-interest loans from the state to build new dispatchable plants, which will add another 41 gigawatts to the grid.

In addition to building more energy sources, the upcoming surge in demand has grid operators and policymakers excited about certain policies that more progressive entities have been advocating all along. Groups like the Sierra Club have advocated for Texas to focus more on demand-side strategies — getting Texans to use less energy more efficiently, with better insulated homes and smart thermostats — before building new energy sources in recent years. legislative sessions.

These strategies would reduce consumer utility bills and stress on the network – and ideally would include paying the average customer to save during short periods of pressure on the network, the same benefit that cryptocurrency miners currently enjoy. The Sierra Club recently submitted comments to the PUC defending an increase in the state’s energy efficiency target, and ERCOT surprisingly responded in the affirmative: “ERCOT believes that a renewed focus on demand-side measures will be necessary to ensure a reliable grid in the future… potentially including energy efficiency programs.”

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