Oil & Gas News

Texas Power Demand Set to Double by 2030

Crypto, Texas, Energy Demand

At a recent public hearing with the Texas Senate Committee on Business and Commerce, officials from the Public Utility Commission (PUC) and the Electric Reliability Council of Texas (ERCOT) revealed that Texas is bracing for a dramatic spike in power demand, expected to nearly double by 2030.

Today’s energy demand stands at about 85 gigawatts, but projections indicate this could surge to 150 gigawatts in the latter half of the decade. Surprisingly, the burgeoning crypto mining sector, centered in the Permian Basin, is poised to consume over half of this projected increase. Crypto mining, integral to blockchain transactions and bitcoin circulation, is rapidly expanding its footprint in the region.

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While the Permian Basin’s industrial power demand has traditionally been dominated by oil and gas sectors—a trend that will continue as these industries grow—crypto mining has emerged as a significant new player. This influx of mining operations is creating intense competition for electricity, particularly as oil and gas operations shift towards more electrically powered equipment. According to a report by the Wall Street Journal in January, fracking operations in West Texas now consume electricity equivalent to nearly four times that of Seattle daily.

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The strain of crypto mining on Texas’s energy supply extends beyond sheer consumption. In August 2023, ERCOT compensated bitcoin mining company Riot nearly $32 million to reduce power usage during peak grid demand. During the 2021 winter storm, the nearby Bitdeer mining facility, together with Riot, drew power equivalent to 300,000 homes and received $18 billion in state support. Such subsidies, especially in light of soaring residential electricity bills and repeated calls for conservation during hot summers, have sparked public outrage.

Reacting to ERCOT’s disclosures, Lt. Governor Dan Patrick expressed his astonishment on Twitter, criticizing the disproportionate grid demand from crypto miners and data centers, which he noted provide minimal employment benefits. He emphasized the need to prioritize grid development for residential and commercial use to keep energy costs low, rather than catering to niche industries with extensive power needs.

Amid these developments, Texas’s population is projected to hit 50 million by 2050, escalating the urgency for additional power infrastructure. To address this, the Senate has already moved to incentivize the construction of new dispatchable generation plants, with 81 gas companies applying for state-offered low-interest loans to increase the grid’s capacity by 41 gigawatts.

In response to the looming energy crisis, there’s growing support among grid operators and lawmakers for demand-side management strategies. Advocacy groups like the Sierra Club have long championed such measures, urging more efficient energy usage through better home insulation and smart thermostats, instead of merely expanding supply. These strategies not only promise to reduce consumer costs but also alleviate grid stress. Encouragingly, ERCOT has acknowledged the necessity of these demand-side measures to ensure future grid reliability, possibly expanding energy efficiency programs.

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