A Bitcoin mining outfit said it made $9.5 million in credits selling electricity back to the power grid of Texas at a premium when energy demand rose to record levels during a heatwave last month.
Riot Blockchain, headquartered in Colorado, operates one of the largest crypto-crafting facilities in America. Located in Rockdale, Texas, the site is home to tens of thousands of Antminer S19 ASIC-powered systems that sit in what look like sinks filled with a heat-absorbing fluid to keep the hardware cool as it constantly runs software to mine Bitcoins.
Last month, like other large-scale miners in the state, the biz decided to power down part of its mining machinery as energy usage and prices in Texas soared.
Demand for electricity in the Lone Star State rose as people turned up their air-con and other equipment amid a scorching heatwave that drove temperatures beyond 37 degrees Celsius (100 degrees Fahrenheit). This strained the state’s electrical grid, which is operated by the Electric Reliability Council of Texas (ERCOT).
“As energy demand in ERCOT reached all-time highs this past month, the company voluntarily curtailed its energy consumption in order to ensure that more power would be available in Texas,” Riot Blockchain CEO Jason Les said on Wednesday.
The company said it cut back a total of 11,717 megawatt-hours, an amount that Riot said could power 13,121 average homes for a month (that works out if you use Uncle Sam’s average figure of 893 kWh per US home per month). There are more than 11 million homes in Texas, mind you.
And here’s the canny part: Riot said it resold the electricity it had previously purchased for its mining rigs back to ERCOT at a premium price during July’s scorching temperatures The biz said it was reimbursed in power credits.
“By providing power back into the ERCOT grid during periods of peak demand, the company estimates that power credits and other benefits from curtailment activities totaled an estimated $9.5 million, significantly outweighing the reduction in [Bitcoin] mined,” Les said.
That $9.5m is equivalent to 439 Bitcoin in July prices. For comparison, it produced 443 Bitcoin July 2021. Riot also still mined 318 coins last month from its remaining capacity. Bear in mind, though, BTC was worth more a year ago.
So, in July 2021, it mined about $15.5 million in Bitcoin. And in July 2022, it mined about $7 million in BTC, plus the $9.5m in benefits from scaling back its output. That comes to about the same or a little more than a year ago. Maybe that was as planned, selling back enough power to offset the fall in Bitcoin’s value.
Now that the price of Bitcoin has crashed from November’s high of $64,000 …….