“Texas is where liberty lives.” That is the opening line on the Texas Economic Development website. Globally, Texas ranks as the world’s 9th largest economy. It is the largest U.S. energy producer, the leading technology exporter, and headquarters for 10% of the Fortune 500 companies. Given its small government, low-tax financial philosophy and no personal income tax, coupled with an extensive commercial and trade infrastructure, the state provides a welcoming environment for businesses and employees. Importantly, electricity costs in Texas rank in the lower half of all states, helping keep costs down. Thus, it was not surprising that bitcoin mining businesses were attracted to Texas, as the industry grew. Cheap and available power was an important driver in their decisions.

The current scorching heat has tested the Texas electricity grid with days of record demand necessitating multiple conservation warnings. In response to tight power supplies and soaring demand, spot energy prices jumped. Bitcoin miners often stopped operating and sent their power supply to the grid for hefty payments. Their efforts were lauded for showing concern for the public. However, the actions were not necessarily for the greater good of Texans, but rather for the profit-earning opportunity bitcoin mining executives could not overlook.

Making the switch between operating bitcoin mining machines and sending the power to the grid is easy. Just switch off the machines. Knowing when to flip the switch requires constant monitoring of the power market to track spot prices to determine when the profit from mining bitcoins is less than selling the power. Can the switching decision be made easier? Yes, with hardware, software, and algorithms. A power switching setup triggered by computer modeling of spot electricity prices that maximizes profitability between bitcoin mining and fuel payments is the goal.

The capability to automatically switch between mining and sending electricity to the grid enables maximizing intermittent power plants. Renewable power is growing rapidly in Texas. It is the top state for wind installed capacity and second in solar. Intermittent power is cheap, which is why it undercuts systemwide pricing and makes the Texas power grid more fragile. Moreover, as intermittent power grows, many fossil fuel generators are forced to operate in stand-by mode to be ready to supply electricity when renewable energy faulters. These plants could be selling electricity to bitcoin mining machines until the grid needs their power, especially with the switch automated.

Power hungry bitcoin mining paired with intermittent power – either renewable or stand-by fossil fuel plants ‒ can capitalize on curtained power output. Systems to facilitate these pairings, while a radical thought may be an ingenious use of technology. It helps two businesses facing operational challenges flourish.

For this Company Spotlight, we interviewed Digital Power Optimization’s (DPO) Chief Operating Officer (Alex Stoewer) about the company’s unique and proprietary Cryptocurrency Mining as a Service (CMaaS) strategy and structure. DPO utilizes cryptocurrency mining as a tool to help power producers maximize the value of their energy. For more information on DPO, please visit digitalpoweroptamization.com.

Bitcoin Mining Fundamentals:

What is Bitcoin Mining?: Bitcoin (most actively traded cryptocurrecy) is “mined” by computers performing a series of calculations to unlock a portion (or block) of the underlying blockchain. Every 10 minutes, a pre-defined amount of Bitcoin is distributed by the…. READ MORE

Founded in 2011 with roots dating to 1947, IEA is a premier services provider in renewable energy and infrastructure solutions, with extensive expertise and capabilities spanning engineering, procurement, construction and other related services. IEA has completed more than 260 utility-scale wind and solar projects across North America and executed a range of complex public and private infrastructure construction projects. MasTec is a leading infrastructure construction company operating mainly throughout North America across a range of industries. MasTec’s acquisition of IEA significantly expands its clean energy and infrastructure segment as well as adds incremental service capabilities and customers.

Founded in California in 2017, esVolta is a developer, owner, and operator of utility-scale energy storage projects across North America and has a portfolio of more than 900 megawatt hours of operational and utility-contracted projects in the U.S. and Canada. esVolta also has a portfolio of projects under active development in Texas, Arizona, Montana, California, Virginia, Colorado, Washington, and New Mexico. Founded in 2014, Generate Capital builds, owns, operates, and finances solutions for clean energy, transportation, water, waste, and digital infrastructure. Generate Capital has partnered with over 50 technology and project developers and owns and operates more than 2,000 assets globally. Generate Capital’s acquisition of esVolta allows for expansion into the front-of-the-meter battery storage market by adding a fast-growing and experienced team with a pipeline of attractive projects.

Based in Durham, N.C., FlexGen is a leading integration services and software technology provider for energy storage solutions in the United States and globally. FlexGen designs and integrates storage solutions and the software platform that is enabling today's energy transition. FlexGen's proprietary energy management software platform, HybridOS, allows energy storage owners to deploy various power market strategies and combine storage solutions with any form of generation. Vitol is a leader in the energy sector with a presence across the spectrum: from oil to power, renewables, and carbon. Vitol trades 7.6 million barrels of crude oil and products per day and charters circa 6,200 ship voyages yearly. The funding by Vitol will support the execution of FlexGen's large pipeline of projects across multiple regions.

Related Press Release: FlexGen Announces $100 Million Series C to Power Continued Growth

Founded in 2011, Clarke Valve provides high quality industrial control valves to organizations worldwide and is a portfolio company of Saudi Aramco Energy Ventures, Chevron Technology Ventures, and OGCI Climate Investments. Clarke Valve is the exclusive manufacturer of the Dilating Disk™ Valve, the most environmentally responsible control valve. Flowserve Corp. is one of the world's leading providers of fluid motion and control products and services. The $5 million in series D funding will assist in the acceleration of the commercial expansion of Clarke Valve's technology.

Revterra is a Houston-based technology company developing a grid-stabilizing kinetic battery. Revterra's system allows for the efficient storage and flexible delivery of electricity within an environmentally friendly package. Revterra's grid-stabilizing kinetic battery leverages its innovative passively stable magnetic bearing technology, realizing the benefits of existing flywheel energy storage technologies while significantly amplifying performance. Financing, led by Equinor Ventures and joined by SCF Ventures, will be used to fund product development, hiring, and the commercialization of Revterra's S100 kinetic battery to accelerate the rapid electrification of transportation and enable increased renewable energy deployment without destabilizing the electric grid.

Energy Technology Musings

Bitcoin Mining, Texas, and Power Supply: Symbiotic?