Electricity prices in Texas increased by 6000%: how this will affect bitcoin miners
Date: 2023-08-20 Author: Karina Ziganova Categories: BLOCKCHAIN, IN WORLD
The Electricity Reliability Council of Texas (ERCOT) has asked households and businesses to voluntarily reduce their electricity consumption as electricity prices cross the $5,000 mark.
Texas is one of the largest Bitcoin (BTC) mining centers. Thus, a sharp increase in electricity prices can seriously affect the hash rate of the network.
Texas urges businesses to reduce electricity consumption
The electricity market in Texas is unregulated and has its own power grid.
Spot electricity prices in Texas have risen sharply due to the summer heat, according to Bloomberg. In the screenshot below, you can see that the prices approached the $5,000 mark, an increase of more than 60 times.
But even though the electricity market saw huge surges in demand this summer, hitting a record high of 85.5 GW on Thursday, supply remains consistently strong.
This is partly due to the development of renewable energy. According to ERCOT, last year in Texas, about 40% of electricity was generated by natural gas, about 25% came from wind and solar energy.
How the price of electricity affects the hashrate of bitcoin
Texas is one of the largest bitcoin mining centers. In the screenshot below, you can see that it accounts for a huge part of the total hashrate of the largest mining companies. What's more, 100% of Riot's operations are also located in Texas.
Miners have voluntarily stopped work more than once and cooperated with ERCOT in order to save electricity. The shutdown of installations during the current crisis will certainly affect the hashrate of the network. So, in December 2022, when a winter storm hit Texas, the BTC hashrate dropped by 35%. However, the very next day it recovered to its previous level.
Against the backdrop of ongoing events, the hashrate dropped from 445 EH/s on Monday to 406 EH/s on Thursday.
