A quantification of how much crypto-miners are driving up the wholesale cost of energy in Texas

TL;DR

This paper quantifies how cryptocurrency mining significantly raises wholesale electricity prices in Texas, with potential for substantial future increases if mining expands rapidly.

Contribution

It provides a specific estimate of the impact of crypto-mining load on Texas electricity prices and highlights the potential for future price surges.

Findings

Each GW of mining increases wholesale prices by 2%

Current mining load has already raised prices by about 2%

Potential for large price increases with additional 27 GW of mining load

Abstract

The use of energy by cryptocurrency mining comes not just with an environmental cost but also an economic one through increases in electricity prices for other consumers. Here we investigate the increase in wholesale price on Texas ERCOT grid due to energy consumption from cryptocurrency mining. For every GW of cryptocurrency mining load on the grid, we find that the wholesale price of electricity on the ERCOT grid increases by 2 per Cent. Given that todays cryptocurrency mining load on the ERCOT grid is around 1 GW, it suggests that wholesale prices have already risen this amount. There are 27 GW of mining load waiting to be hooked up to the ERCOT grid. If cryptocurrency mining increases rapidly, the price of energy in Texas could skyrocket.