Bitcoin miners lose a bid to withhold their energy data

The survey is a put-up-or-shut-up moment for the bitcoin mining industry.

Bitcoin advocates have long disputed the claim that their immense power needs — an EIA report this month estimated that bitcoin mining was responsible for up to 2.3% of total U.S. electricity demand in 2023, equal to more than six million homes, and rising “very rapidly” — cause the electric grid to run more heavily on fossil fuels, and raise prices for other businesses and households. This question is tangled in the byzantine details of grid pricing and operation, and impossible to resolve without more data, researchers say.

At times when more demand comes onto the grid, gas-burning peaker plants often get fired up and raise the system’s carbon emissions. In many U.S. power markets, the price of power also tracks demand in real time. Bitcoin miners argue that they are highly sensitive to this price signal, and shut down their systems the minute prices rise enough to make mining uneconomic, thus saving emissions and drawing prices back down. Conversely, at times of lower demand, bitcoin mines can soak up excess power from wind and solar farms that would otherwise be wasted, improving the economics of renewable projects and therefore helping to decarbonize the grid.

Mining operations that are wired exclusively to purpose-built renewable energy systems and don’t draw from the grid shouldn’t pose a pricing or emissions problem, said Ian Bowen, an energy market analyst at the consulting firm ICF. But that doesn’t describe most mines. For the most part, at least in Texas, which is the world’s top bitcoin mining hub, the new demand has been mostly met by fossil fuels, he said. That’s especially likely to happen when new mines are built quickly and without much advance coordination with regulators, since bringing on more renewables requires expanding grid lines. Moreover, mining companies have overstated how much excess renewable power there actually is, he said: “That’s when you see this increase in emissions.”

The EIA survey, Bowen said, could make it easier for grid officials and power companies to plot out how to integrate bitcoin mining in a minimally disruptive way. It could also fuel efforts by Congressional Republicans to tear down Biden’s climate agenda; in a letter on Tuesday to the White House office that approved the survey, Rep. Tom Emmer, (R-Minn.), the majority whip, complained that EIA had been hijacked to “enforce the Biden administration’s regressive policy position against energy consumption.”