- The draft also seeks to remove tax abatements for crypto miners.
- There is a growing concern about high energy consumption in the sector.
Enjoy your financial freedom with Uphold
Get a welcome bonus of $50 when you sign up and trade at least $600 of your favorite asset
Bitcoin mining companies in Texas could face new restrictions from the state authorities if a bill seeking to enhance the electricity grid efficiency becomes law.
Brought before the Senate Committee on Business and Commerce Tuesday, Senate Bill 1751, among other things, requires that larger miners shut down operations during power emergencies and cuts down on incentives usually paid by the Electric Reliability Council of Texas (ERCOT).
Said bill sponsor, State Senator Lois Kolkhorst: “We are trying to produce all this power. We will have a lot of this new power taken up by virtual currency mining. And then we are going to pay them to go off the grid at different times, which I believe is part of their business model.” Major crypto miners in Texas have been a part of a state-run demand program that rewards miners for giving power back to the grid.
Are you looking for the next big opportunity in the cryptocurrency market?
Discover why investors are calling this digital asset the most undervalued cryptocurrency on the market. Learn about the potential growth opportunities this asset presents and why it’s catching the attention of financial experts worldwide.
SB 1751 is also targeting to remove tax abatement for cryptocurrency miners, which according to Kolkhorst, is in consideration of the projected potential for an expansion in the industry. Riot Blockchain – the top bitcoin miner in Texas – earned $9.5 million in power credits when it suspended operations last August, according to the company statements.
Resilience in the crypto mining sector
Despite the ongoing industry regulatory pressure and the bear market witnessed last year, Texas is seeing a surge in power demand by crypto miners, according to the industry lobby group, Texas Blockchain Council. Currently, miners in the Lone Star State are consuming an estimated 2,100 megawatts of state energy supplies annually.
According to the Texas Blockchain Council, the high demand has prompted some counties in Texas to incentivize miners to use sustainable energy resources, which are projected to supply almost 40% of ERCOT’s energy demand. Nonetheless, much of the crypto mining activities in Texas reportedly threaten the energy supply as more miners join the space.
“There are a lot of bitcoin mines that are trying to connect to the system,” commented Joshua Rhodes, a research scientist at the University of Texas, in an interview with Reuters, adding that “if all of them were to connect in the timelines that they are looking to connect, then it probably would present an issue to the grid because that load would be growing way faster than it ever has before.”
Start buying crypto in 3 simple steps
Buy, sell, and trade 250+ cryptos with low fees