An opinion piece from ENODA’s Web3 Regulatory & Policy Officer, Eva Jovanova, on how to achieve grid stability in Texas, in response to a recent article from The Economist: Why Texas Republicans are souring on crypto

As Texas faces increasing pressure to ensure reliable power supply, particularly in the wake of Winter Storm Uri, the importance of grid flexibility has never been clearer. The storm left millions without power, exposing the vulnerabilities in the state’s energy infrastructure. In response, Texas lawmakers and industry leaders have been grappling with how best to enhance grid stability. One proposed solution has been the integration of cryptocurrency miners into demand-response programs, where they are compensated for curtailing energy use during peak demand. However, while this approach offers some short-term benefits, it fails to address the larger issue: the need for a more sustainable and genuinely flexible energy grid. 

The Limitations of Relying on Crypto Miners 

Crypto mining operations, such as those run by Riot Platforms, have found a foothold in Texas, largely due to the state's cheap energy, available land, and favourable regulatory environment. These miners, who consume vast amounts of electricity to power their operations, have been seen as a potential asset to the grid due to their ability to "power down" when demand spikes. Riot, for example, generated more revenue from curtailing its operations and selling power back to the grid during high demand than it did from mining Bitcoin in August 2023​. 

Yet, while miners can temporarily reduce their energy consumption, critics argue that this approach might not be sustainable in the long run. Bill SB 1751, recently passed by the Texas Senate, seeks to cap Bitcoin miners’ participation in demand-response programs and eliminate tax abatements for the industry. The bill reflects a growing unease about whether these miners are contributing to grid stability or simply profiting from energy crises​. 

 A Strategic Need for Genuine Grid Flexibility 

The debate surrounding crypto miners points to a larger issue: the need for a more strategic approach to grid management. Relying on an industry that profits from grid stress is not a viable long-term solution. While miners can adjust their power use in real-time, this model risks distorting the energy market and placing undue reliance on subsidies. Furthermore, miners are not truly integrated into the energy ecosystem in a way that enhances long-term grid resilience. 

Instead, Texas should focus on investing in advanced demand-response technologies that offer true flexibility. These systems dynamically balance supply and demand across the grid, helping to smooth out fluctuations without creating market distortions. Advanced grid management technologies, combined with better data on network capacity, can optimise the existing infrastructure without relying on industries that may exacerbate the problem. 

 Why Flexibility, Not Bias, Should Shape Grid Policy 

For Texas to build a resilient and flexible grid, policymakers must adopt a technology-neutral approach that encourages innovation and competition. Rather than singling out specific industries, like crypto mining, or relying on temporary fixes, like storage solutions that can benefit from peak electricity prices, the state should focus on creating an environment where diverse energy solutions can be interconnected, allowing the grid to thrive. This means removing barriers to the adoption of advanced grid technologies and ensuring that policies are designed to reward genuine contributions to grid stability. 

Texas has already taken some steps in this direction. The Electric Reliability Council of Texas (ERCOT), the state’s grid operator, has warned that energy demand could nearly double by 2030 due to population growth, extreme weather, and the expansion of energy-intensive industries like data centres. To meet this challenge, Texas needs to prioritise long-term investments in grid infrastructure that can handle these demands without resorting to stopgap measures. 

 Building a Resilient Energy Future for Texas 

The energy challenges facing Texas are complex, and there is no one-size-fits-all solution. However, one thing is clear: relying on industries like crypto mining to stabilise the grid is not a sustainable strategy. While miners may offer short-term benefits by curtailing operations during periods of high demand, this approach risks distorting the energy market and diverting attention from more sustainable solutions. 

Instead, Texas should focus on building a truly flexible and adaptive energy grid—one that integrates advanced demand-response technologies, grid-scale storage, and renewable energy sources. By investing in long-term infrastructure improvements and adopting technology-neutral policies, Texas can create a resilient and sustainable energy system that ensures reliable power for all. 

The path forward requires vision and commitment. Texas has the resources and the opportunity to lead the way in building a more flexible, efficient, and reliable energy grid. Now is the time to make the strategic investments that will ensure the state’s energy future for decades to come.