ERCOT has created a voluntary curtailment program for bitcoin miners and other large flexible loads that it says will reduce power use during periods of high demand, even as the cryptocurrency industry shows signs of an implosion.
The grid operator said the curtailment program is primarily intended for large flexible customers, but any large customer directly connected to a transmission service provider’s facility can participate, subject to approval by ERCOT. Registration began Tuesday and the program is expected to go live in January.
The program is temporary until ERCOT establishes a long-term set of rules of for the large loads. The grid operator created a Large Flexible Load Task Force earlier this year to develop policy recommendations to integrate the loads. The group has been considering policies related to planning, markets, operations, and large load interconnection processes and reviewing related market rules.
Woody Rickerson, ERCOT vice president of system planning, said the goal is to work with large customers to support system reliability.
“These customers are large power users but have the flexibility and willingness to reduce their energy use quickly, if needed,” Rickerson said in a press release.
Under the program, ERCOT will request curtailment of crypto mining consumption when physical responsive capability declines after non-spinning reserve service has been deployed, but before emergency response service is called on.
Program participants will not be considered market participants and are subject to the grid operator’s confirmation. ERCOT said it will not refer participants to the Public Utility Commission if they fail to comply with any curtailment request under the program.
ERCOT currently has about 1.5 GW of crypto mining load and said in August it was studying 17 GW of load from the sector. By November, 37 GW of crypto load were requesting to be interconnected. (See “Staff Studying 17 GW of Crypto Load,” ERCOT Board of Directors Briefs: Aug. 16, 2022.)
“Not all of that will be constructed, but the challenge is how much will be there in three to four years,” Jeff Billo, ERCOT director of operations planning, told the grid operator’s Board of Directors in August.
Texas Gov. Greg Abbott and former interim CEO Brad Jones have both welcomed miners with open arms, pointing to their ability to quickly shut down should ERCOT need their capacity to meet demand. Jones said earlier this year that crypto offers a “fantastic” resource and said miners are effective in balancing supply and demand.
“We need to work with these folks to bring them in,” Jones told the Gulf Coast Power Association in April. At the time, he expected ERCOT’s crypto load to reach 5 GW in two years.
“I see that as a positive, but we’ve got to think about some policy issues,” he said. (See “Jones: Will Stay as Interim CEO,” Overheard at GCPA’s 2022 Spring Conference.)
ERCOT’s flexible load task force, having agreed on some high-level concepts, has paused until January. That gives staff time to develop language for protocol changes necessary to accommodate the large loads, said Longhorn Power’s Bob Wittmeyer, the group’s vice chair.
ERCOT pays industrial users to shut down during tight conditions. The grid operator’s low wholesale energy prices have also been a draw for crypto miners, but they have been rising recently.
The bankruptcy of FTX, a $32 billion cryptocurrency exchange, has sent shivers through the industry. The financial losses, criminal investigations and skepticism in Washington, D.C. have cast further gloom.
