Crypto mining has been on the rise in the USA, with the total market cap of listed crypto miners in the US at $22 Billion in June 2024. A Republican administration led by Trump is expected to help crypto mining companies expand operations. Trump has already declared his policy of mining the remaining Bitcoins within the US.
However, Texas might introduce strict restrictions on crypto mining and AI data centres to reduce the load on its already stressed power grid. Lt. Governor Dan Patrick communicated this via X (fomerly Twitter).
According to him, by 2030, Texas will need 150k MW of grid capacity to fulfil its energy requirements, compared to the current installed capacity of 85k MW.
The newer estimates of energy requirements come after several crypto mining and AI companies turned towards Texas after facing difficulties in California and nearby states. The latest forecasts of 150k MW are 36.3% higher than older estimates of 110k MW of grid capacity to handle such loads.
As of now, Texas seems far from being ready to handle the additional load. If the load capacity is not increased to keep pace with the demand, it might result in expensive electricity for everyone. This could ultimately result in policies that discourage crypto-mining facilities, such as differential electricity prices.
Speculations on Taxing Crypto Miners in Texas
Texas might also impose energy tax restrictions on crypto miners and AI data centers. This might be similar to the proposed increased energy taxes by the Biden administration, which Republicans heavily criticized.
In their 2024 budget, the Biden administration announced a 30% electricity tax for crypto mining facilities. The policy discouraged inefficient crypto mining by raising the input cost. Higher input costs could easily put low-margin crypto miners out of business.
Texas is currently ruled by Republicans, a party that has been pro-crypto. A move towards an energy tax would incur stiff criticism from Democrats and the crypto community.
What Solutions do Miners Have?
The most potent solution for crypto miners would be to reduce their dependence on the electricity grid. Inhance the use renewable energy for mining. Several crypto miners in the US have switched to solar panels and wind farms for electricity.
Aspen Creek Digital Corporation is one such crypto-miner in Texas, which has an installed capacity of 87 MW just from solar energy. The company also operates a data centre attached to the facility.
One More Challenge For Crypto Miners in Texas
Another reason that increases the possibility of a tax or penalty on crypto miners is the perceived damage caused to public health.
Last month, a crypto mining company in the state, located in Granbury, accused of causing health problems for residents in the locality. To date, reportedly, 40 people have suffered due to the mining facility’s presence. An ENT doctor in the area, Salim Bhaloo, said he frequently saw patients with symptoms originating from Bitcoin miner’s noise.
Officials ordered another crypto mining facility in North Tonawanda to shut down operations for two weeks, citing excessive noise pollution.
Crypto miners are already facing a challenging regulatory environment in the US. If these health issues are proven to originate from Bitcoin miners, they might face another set of challenges in the state.
