Ted Cruz Says Bitcoin Mining Can Fix Texas’ Crumbling Electric Grid

Texas’ strained electric grid failed during a winter storm that resulted in hundreds of deaths. Cruz says Bitcoin is the solution.
Ted Cruz Says Bitcoin Mining Can Fix Texas' Crumbling Electric Grid
Image: Justin Sullivan / Staff via Getty Images

Texas’ energy grid has problems. Those issues were laid bare this past winter when a storm put the state in a deep freeze, causing blackouts for millions and killing hundreds of people. Sen. Ted Cruz told a cryptocurrency conference in Austin last week that he believes the state’s Bitcoin mining boom could repair its floundering energy grid. 


In a fireside chat at the Texas Blockchain Summit on Oct. 8, the Republican senator expressed his faith that the mass buildout of crypto mines in the Lone Star State could add additional energy capacity to the state’s grid in the event of blackouts or power shortages. 

“Because of the ability to Bitcoin mining to turn on or off instantaneously, if you have a moment where you have a power shortage or a power crisis, whether it’s a freeze or some other natural disaster where power generation capacity goes down, that creates the capacity to instantaneously shift that energy to put it back on the grid,” Cruz told conference attendees. 

Bitcoin mines, which typically consist of rooms full of specialized computers that churn numbers all day in search of the answer to a puzzle that creates the next block on the blockchain, are notorious for their energy use. Bitcoin mining is well-known to use more energy than many countries and corporations, and it’s designed to become more difficult (and thus use more energy) as more miners plug into the network in search of profits as the price of Bitcoin increases. 


But in the event that the grid is being overburdened, these mines are essentially industrial energy consumers that can shut down instantaneously, freeing up additional grid space for the heating and cooling of homes, hospitals, and other critical infrastructure. Already, some miners in Texas are making a killing by shutting down during such times and selling their contracted power supply back to the grid. 

Texas is the perfect candidate for this setup, Cruz said, and Bitcoin mining could play “a significant role [in] strengthening and hardening the resilience of the grid.”  

Indeed, Texas’ grid is in need of help. Last February, winter storm Uri saw an overburdened grid cause days of blackouts that killed 700 and left more than 4-million people without power. Within months, ERCOT was urging Texans to ration their energy use through further strain, this time caused by heat. According to Carey King, research scientist and assistant director of the University of Texas at Austin Energy Institute, it’s unclear how adding more power consumers to an already-stressed grid helps even if they can shut off at a moment’s notice. 

“Mining is a consumptive use of electricity, not a generator, so this doesn’t make sense to me,” King said. “I don’t need a middle man (the miner) in between the generator and the consumer to provide electricity.” 


Cruz also brought up Bitcoin mining that uses waste gas products as a power source. As the top crude oil producing state in the country, the state is also home to a slew of oil and gas wells and refineries that (often illegally) flare excess methane in order to relieve pressure build-ups. That’s given way to an influx of Bitcoin mines that tap into methane flares to power the computers that mine for coin, ostensibly finding good use for what would otherwise be a wasteful, polluting byproduct of the fossil fuel industry. 

“Some of the really exciting endeavors that people are looking at is, ‘can we capture that gas instead of burning it?’ Cruz said at the conference. “Rather than flaring that natural gas you’re putting it to productive use.” 

However, King said that the abundance of flares in the state is something that should be better regulated; not turned into pure profit for fossil fuel creators.  

“Stop issuing flaring allowances and force the industry to actually send the natural gas into the pipeline system,” King said. “Potentially to more NG storage sites that can provide more winter supply in the case of another Uri-like event.”

Cruz also pointed out the mining industry’s use of renewable energy in his comments. . A large portion (some 74 percent, per one 2019 CoinShares report) of Bitcoin mines are powered by wind and solar energy, in part because it’s the cheapest energy to produce in many places, cutting costs for miners. Bitcoin proponents argue that hat’s turned cryptocurrency into an incentive for the creation of renewable energy, and that Bitcoin could lead the energy transition by giving producers reason to subsidize wind and solar. And as the leading producer of wind in the country, Texas has ample room for the buildout of energy infrastructure that can beef up the grid. 

“One of the exciting things about crypto also, is the ability to unlock stranded renewables,” Cruz said. “There are a lot of places on earth where the sun shines a lot and the wind blows a lot but there aren’t any power lines. And so it’s not economically feasible to use that energy.” 

“The beauty of Bitcoin mining is that if you can connect to the internet, you can use that energy,” he continued. “And derive value from those renewables in a way that would be impossible otherwise.” 

But King believes leaving the onus for solving ERCOT’s grid problems shouldn’t be left to a profit-seeking middleman. 

“If your goal is to help average citizens by providing them power, reduce global GHG emissions, then just install the renewables because the vast majority of folks are not involved in the digital currency world,” King said.