Biggest Texas Bitcoin Miner Shuts Down Ahead of Cold Blast

(Bloomberg) -- Crypto miner Riot Blockchain Inc. shut down most of its huge Bitcoin-making operation in Texas to conserve electricity as a wave of cold and ice deliver the biggest test of the state's power grid since last year's deadly blackouts.

On Tuesday morning, Riot voluntarily began to reduce power to Bitcoin mining servers at the Whinstone facility, located northeast of Austin, company spokesperson Trystine Payfer said by email. By Wednesday, the mine had cut energy use by roughly 98%. Riot Chief Executive Officer Jason Les and Whinstone CEO Chad Harris told Governor Greg Abbott's office on Monday that they were preparing to curtail power use by Whinstone, the state's largest Bitcoin miner, ahead of the winter storm.

“Whinstone began taking proactive measures to prepare for shutting down its mining operations in response to any demand surges in Ercot,” Payfer said, referring to grid operator Electric Reliability Council of Texas. The mine uses enough electricity to power about 60,000 homes in the state.

One way Ercot can try to avert blackouts in a storm is by using its so-called demand response programs, where industrial users like Bitcoin miners voluntarily agree to shut down to conserve power. Those users reduce power use if Ercot asks them to. The programs don't come free: The grid operator pays miners when they are asked to shut down or curtail power use.

Whinstone cut power without Ercot officially requesting any reductions, said Payfer.

In February 2021, as winter storm Uri triggered blackouts across the state, the Whinstone mine reduced electricity use or shut down completely for almost eight days. The plant trims power use or shuts down for as many as 275 hours per year.

Bitcoin miners, which are flooding Texas because of the state's cheap electricity, have made participation in these programs a key talking point in lobbying Abbott to create incentives for their industry. The Texas Blockchain Council, the Bitcoin mining industry lobbying group, also contacted the governor's office with pledges to power down operations ahead of this week's freeze as needed.

Compute North, a Minnesota-based data center providing crypto mining services, said it's prepared to shut down an 11 megawatt Texas site to conserve power. Compute North could turn off the Texas center within 10 minutes.

“If we are needed to come down to maintain stability, we are fully ready, willing and able to curtail the entirety of our load if needed,” Peter Liska, director of energy at Compute North, said in an interview.