Texas needs EE, not crypto
- Feb 4, 2022 8:46 pm GMT
Last year, what many commentators had long predicted finally happened: The Lone Star State’s grid went down hard. To those in the know, the failure made total sense. For years, Texas had been building up its wind portfolio at breakneck speed and shutting coal plants. Simultaneously, demand has skyrocketed in recent years thanks to migration into cities like Austin. When an uncanny winter storm hit last February, the crisis finally materialized, and it was nastier than even the loudest bell ringers had predicted. Over 4.5 million customers were left without power, some for several days. Estimates differ, but even the most conservative claim at least 210 people died because of the outages.
Despite a medley of changes, Texas’ grid remains very vulnerable one year after the Uri debacle. Although it looks like the grid will squeak through a storm this week—70,000 homes have lost power as I write this, few of the root problems have been fixed. Companies that operate natural gas systems have not been forced to weather proof, few efforts have been made to reduce demand for heat, and the state’s energy market still incentivises cheap electricity over reliability.
Governor Abbot’s solution to the above problems has been to double down on his state’s Crypto-friendly posture. For those who don’t know, Abbot and many Texas legislators on both sides of the aisle have worked hard in recent years to attract crypto mining companies to the state. This is how the movement was described in a recent Bloomberg article on the subject:
“Abbott and Republican lawmakers have taken some of the most aggressive steps in the U.S. to lure the industry. Last May, Texas became one of a few states to make it easier for businesses to hold crypto assets and use them as collateral for loans. Abbott also created the Work Group on Blockchain Matters, staffed by industry experts and insiders.”
The same article explains that many countries around the world have moved in the opposite direction, banning and otherwise discouraging crypto mining because of its huge tax on the grid.
So, how can a business that stresses the grid be used to support it? Here’s the basic elevator pitch, according to Bloomberg:
“The idea is that the miners’ computer arrays would demand so much electricity that someone would come along to build more power plants, something Texas badly needs. If the grid starts to go wobbly, as it did when winter storm Uri froze up power plants in February 2021, miners could quickly shut down to conserve energy for homes and businesses. At least two Bitcoin miners have already volunteered to do just that.”
Instead of courting one of the world’s most energy inefficient industries, Texas should be boosting energy conservation. A report released last year by the American Council for an Energy-Efficient Economy (ACEEE) makes a convincing case that Texas can solve its reliability issues through efficiency measures.
The report lays out seven residential energy efficiency and demand response programs that could lower summer peaks by 7,650 MW and winter peaks by 11,400 MW over five years. Such peak reductions could possibly erase the need for the new gas generation plan that’s so popular right now. ACEEE estimates its plan would cost $4.9 billion over 5 years, almost 40 percent less than the generation-focused proposals made by Berkshire and Starwood.
The ACEEE proposes 7 big investments. On the building front: incentives for attic insulation, smart thermostats, electric furnace upgrades, electric water heaters and heat pumps. The report also calls for demand response programs that would target air conditioning, ev charging, and water heating. Many of these initiatives are on the table right now because Texas has failed to invest in basic energy efficiency measures over the years. It’s low hanging fruit, really.
If Texas goes through with its unconventional crypto plan, I really hope it works. However, I think a better idea would be to reduce stress on the grid by taking advantage of all the efficiency opportunities available.
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