Riot Platforms, a bitcoin mining company based in Rockdale, Texas, announced on Wednesday that it earned $31.7 million in energy credits from the Electric Reliability Council of Texas (ERCOT) in August. The company generated the credits by voluntarily curtailing its energy consumption during a record-breaking heatwave that strained the state’s power grid.
Bitcoin mining is a process that involves using specialized computers to solve complex mathematical problems and verify transactions on the bitcoin network. The process consumes a lot of electricity and generates a lot of heat, which requires cooling systems to prevent overheating. According to Riot, its Whinstone data center in Rockdale has a total capacity of 750 megawatts, making it one of the largest bitcoin mining facilities in the world.
Riot Platforms forgoes bitcoin revenue to help ERCOT
During the month of August, Texas experienced several days of extreme heat that caused the demand for electricity to spike, in some cases approaching the total available supply. ERCOT, the agency that manages the state’s power grid, issued eight calls for voluntary energy conservation and asked consumers to adjust their thermostats or delay doing laundry during peak hours.
Riot Platforms responded to ERCOT’s request by curtailing its power usage by more than 95% during periods of peak demand, forgoing revenue from its bitcoin mining operations to instead provide energy resources to ERCOT. The company said that its curtailment of operations meaningfully contributed to reducing overall power demand in ERCOT, helping to ensure that consumers did not experience interruptions in service.
As a result of its power curtailment, Riot Platforms received an estimated $24.2 million in power curtailment credits under its contract with ERCOT and $7.4 million from ERCOT’s demand response program. The total value of the credits dwarfed the 333 bitcoin that the company mined in August, worth about $8.9 million as of the end of the month.
Riot Platforms showcases its unique power strategy
Riot Platforms said that August was a landmark month for the company in showcasing the benefits of its unique power strategy. “The effects of these credits significantly lower Riot’s cost to mine bitcoin and are a key element in making Riot one of the lowest cost producers of bitcoin in the industry,” said Jason Les, CEO of Riot, in the company’s press release.
The company also said that it plans to expand its operations in Texas by building another facility in Corsicana, with 1 gigawatt of capacity approved by ERCOT. The company expects to start construction in early 2024 and complete it by mid-2025.
Riot Platforms is not the only bitcoin miner that is taking advantage of Texas’ energy market and incentives. The state has become a hotspot for cryptocurrency mining due to its abundant and cheap renewable energy sources, such as wind and solar, as well as its deregulated and competitive electricity market that allows miners to negotiate favorable rates and contracts with power providers.
However, not everyone is happy with the growing presence of bitcoin miners in Texas. Some critics argue that they are consuming too much electricity and contributing to greenhouse gas emissions and climate change. A bill that would have eliminated the energy credits for bitcoin miners passed the State Senate earlier this year, but it failed to advance past committee in the House. Instead, the Texas Legislature passed two bills that expanded the credits. They took effect on Sept. 1.