As cryptocurrency has increased its notoriety in the US, so has its demands on the US electrical grid. Indeed, the US is witnessing a constantly proliferating number of cryptomining facilities, which are large spaces – often former factories or defunct power plants – filled with computers using large amounts of electricity to “mine” crypto by solving mathematical equations as fast as possible. This drain on energy has been met with unease in some parts of the US, however, such as New York, which has legislatively slowed down the growth of cryptomining but other states are welcoming the crypto mining industry with open arms.
For instance, a large crypto entity just purchased two mining sites in Mississippi for $6 million, and just closed on another site in Wyoming. And in Tennessee, the Memphis-Shelby County Board of Adjustment just voted unanimously to approve a new mining facility in Southeast Memphis in the city’s bid to become the “tech hub of the South.” Texas, a bit further head of the game then its Southern neighbors, has already seen an explosion in mining facilities. But, as with other states for which the mining boom started a bit earlier, North Texas residents are unhappy with not only the excruciating noise coming from a cryptomining facility a few dozen miles from Forth Worth, but also their mining neighbor’s drain on the Texas electrical grid. Indeed, crypto mining facilities in Texas are estimated to consume up to 30000 megawatts per day – equivalent to the energy used by 600,000 homes. Although this pattern has repeatedly itself throughout the country over the last two years, Texas lawmakers have indicated they are surprised about the excessive energy use of the previously welcomed mining industry. As a result, last month, Texas created proposed rules for the industry, and at a meeting earlier this summer, Texas indicated mining facilities would have to engage in a registration process.
Recognizing this problem, and trying to get out in front of it, the U.S. Energy Information Administration (EIA), announced this past February (covered by ELM here) that it would conduct a provisional electricity-consumption survey of large crypto mining entities in order to assess how the energy demand by cryptomining facilities is evolving. The EIA began a second attempt to conduct this survey over the summer. We have yet to see whether the results of the survey will lead to any further regulations in the U.S.
We also have yet to see the effects of crypto energy use during the simultaneous proliferation of the use of artificial intelligence (AI) and cloud computing, which similarly gobbles up energy (covered by ELM here). In fact, we are even beginning to see a migration, of sorts, of miners who are not profiting as much from cryptomining any more, over to the AI industry. Between these two ravenous-for-electricity industries, local and federal legislators may have their work cut out for them.
