June 19, 2023 | S&P Global Commodity Insights | 1 minute read

Bracewell’s David Shargel discussed with S&P Global Commodity Insights the state of crypto mining activities in Texas and New York as miners increasingly hunting for new ways to tap into renewables.

Shargel noted that a majority of US-based crypto mining relies on fossil fuel-derived electricity. In January, New York became the first state to ban crypto mining derived from fossil fuels, and even some Texas lawmakers have recently tried to chip away at the state’s mining cohort.

“For a couple of years now, Texas has been extremely attractive. Part of the incentive was providing a monetary reward for crypto mining operations that were able to shed load, stop their operations when load was at peak,” Shargel said.

To limit this, Texas state Sen. Lois Kolkhorst, a Republican, told a state Senate committee hearing in March that Texas’ booming digital mining industry is planning to add 37 GW of additional load to the state and no longer needs state incentives to thrive.

S.B. 1751, a bill sponsored by Kolkhorst, proposed that miners should only earn credits for demand response services if they comprise less than 10 percent of services procured by the Electric Reliability Council of Texas Inc. The bill progressed through the Texas Senate amid strong pushback from the industry but ultimately did not pass after being halted by the House of Representatives in late May.

Shargel does not expect interventions to reduce mining activity in the US. “The mining industry will be here to stay for at least some time. The miners are going to continue to find the optimal locations and sources of power,” added Shargel.