The financial incentives that have so far been in place in Texas may soon be a thing of the past. The state that currently accounts for the lion’s share of the global Hash Rate is about to introduce restrictions that will directly affect Bitcoin mining.
Cryptocurrencies a burden on Texas
The new law protects the state’s power grid during peak load periods. One of the proposed solutions is to limit the use of energy by cryptocurrency mining companies.
According to a key provision of the bill, these companies will not be allowed to participate in a state program designed to manage electricity demand. The program rewards miners for putting power on the grid to prevent overloading the system. However, according to the legislature’s latest vision, if the projected energy demand exceeds 10% of the total load required by all loads in the program, cryptocurrency mining will be curtailed.
Senator Lois Kolkhorst, the bill’s sponsor, also explained that the new legislation means that mining companies will not be eligible for tax breaks. He also said that “a large scale of growth in the mining of virtual currencies is already anticipated in the state,” so there is no need to subsidize this growth.
Bitcoin mining halt lavishly rewarded
Last year, a miner known as Riot Platforms received as much as $9.5 million in energy credits when it suspended its operations during a heat wave in Texas. It is worth noting that his Rockdale Bitcoin mining facility is one of the largest in North America and boasts a capacity of 750 MW.
Due to the growing interest in cryptocurrencies, Riot Platforms plans to expand its Bitcoin mining capacity. One of the ventures is to increase its mining and hosting capacity in Navarro County to 1 gigawatt (GW). Initially, the capacity is expected to be 400 MW and is planned for July 2023.
As the CEO of Riot Platforms said, “Cryptocurrency mining requires large amounts of energy, so it is important to invest in renewable energy projects to minimize the environmental impact.” Riot Platforms is one of many entities that are betting on green energy sources to reduce the environmental impact of cryptocurrency mining.
Texas home to many BTC miners
Bitcoin miners in Texas consume up to 2,100 megawatts of electricity, up 75% from the previous year, according to a recent Reuters report, which cites Texas Blockchain Council President Lee Bratcher.
Bratcher said this is a clear sign of growing interest in Bitcoin in the region. As Reuters points out, Texas has recently become a mecca for Bitcoin miners looking for cheaper sources of electricity and industry-friendly regulations. However, the rise of Bitcoin mining could affect the state’s energy balance, raising questions about sustainable resource use and the need for an energy transition.
