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> Some of these tactics have proven controversial with consumers. One program that pays big power users like cryptocurrency operations millions to conserve, has

> Some of these tactics have proven controversial with consumers. One program that pays big power users like cryptocurrency operations millions to conserve, has come under particular scrutiny, as Texans have been asked to conserve voluntarily for months. This is... amazing. Not in a good way.

ftxbro 3y ago
is this what they mean by privatizing profits and socializing losses
- HumblyTossed 3y ago
  No, this is called, "It never trickled down, it only funneled up!"
- refurb 3y ago
  It’s a cute saying, but that really doesn’t make sense in this situation. How is society taking a loss?
wombat-man 3y ago
Maybe they can just price electricity at different tiers of use. Or home vs business rates. Charge crypto farms more, especially if the grid is struggling.
- hardware2win 3y ago
  Wat? There isnt already such a thing?
  - runnerup 3y ago
    There is. Pricing is split mostly along residential vs. commercial vs. industrial although there’s a few more layers of discrimination based on usage patterns and “power factor” (reactive vs capacitive load).
- runnerup 3y ago
  Texas’ strategy is to encourage additional growth in the crypto mining sector because ostensibly they use a lot of power during off-peak days/hours which supports capital payback but also is flexible enough to turn off their load when the grid production is over stressed, so they theoretically won’t contribute to blackouts. Not sure if this thinking is fully correct, but on its face it’s at minimum not completely absurd. Also I think some of the Texas leadership is financially or emotionally invested in cryptocurrency.
- one_level_deep2 3y ago
  That would require admitting that the free market can't solve the problem, and likely makes it worse.
- dcchambers 3y ago
  Texas would never do anything that makes them appear 'anti-business' though. It goes against the entire political ethos of the folks in charge down there.
- yalogin 3y ago
  That doesn’t gel with lobbyists.
- keep_reading 3y ago
  They already do this. Commercial rates are cheaper than residential rates. (Residential customers are getting ripped off, honestly)
- toomuchtodo 3y ago
  Texas needs a capacity market, where generators are paid based on their must run status. They choose not to previously because of politics (prioritizing low cost over resiliency). The PUC is working to fix this ("performance credit mechanism"). https://www.texastribune.org/2023/03/01/texas-power-market-public-utility-commission-electricity-credits/ https://www.texastribune.org/2023/03/01/texas-power-market-p...
lukev 3y ago
The original idea behind this is sound. Because production and consumption must net to ~0, from the grid's perspective cutting load is just as valuable as providing generative capacity. Imagine you own a factory that typically runs 24/7 and is part of the system's base load. There is a material cost for you to shut down production. These structures were set up to make it economically viable to have these types of installations shut down in extreme events and function as "virtual power plants" (remember, lowering base load is physically and economically equivalent to providing additional generation.) So far, this kind of makes sense. But unfortunately the same framework can also be applied to cryptocurrency operations, where it really does not make intuitive sense. Largely, IMO, because Bitcoin is so piggish for energy for so little societal value to start with.
- no_wizard 3y ago
  I have a friend who works in the energy industry specifically targeting power grid management. It is far easier for power companies to manage power loss for things with consistent power usage (low variance) than high variance / inconsistent power loads. Businesses tend to be very consistent, even if their power draw is high, like manufacturing or hospitals etc. Residential power tends to be more variant and harder to fine tune for because it can spike quite suddenly in unexpected ways and tends to add more base load over time. Therefore, it’d actually make more sense for power companies to buy people homes in other states if lowering base load is a concern, since residential is where all the major issues are for load balancing, no?
  - drewchew 3y ago
    Would it help if the state were to provide tax incentives for in home battery backups?
    - boringg 3y ago
      A lot of states are looking into large battery facilities specifically for frequency regulations.
HumblyTossed 3y ago
So... start a "cryptocurrency" business and get paid to not use electricity. I mean, if that's not a good way to funnel money from the lower classes to the rich, I don't know what is.
- dylan604 3y ago
  I want to buy up all of the old readily available GPUs. No need to fight over new latest gen GPUs to actually produce coins. You just need equipment that looks like you can do mining. Then, voluntarily not mine anything so the power company pays you. That is the actual business model to not ever mine anything.
  - netrus 3y ago
    I guess you also need to draw and pay for a lot of electricity most of the time to get that kind of deal.
    - dylan604 3y ago
      I'm sure there's a simple circuit that can put a load on the mains in a way that doesn't cause fires or electrocute anyone
- kentonv 3y ago
  You joke but in August the biggest Bitcoin mine in North America got paid 3.5x more by the utility to turn their rigs off than they made in actual Bitcoin mined -- and they say openly that collecting credits is core to their strategy. https://www.cnbc.com/2023/09/06/texas-paid-bitcoin-miner-riot-31point7-million-to-shut-down-in-august.html https://www.cnbc.com/2023/09/06/texas-paid-bitcoin-miner-rio...
  - xwdv 3y ago
    Well that’s it then. I will startup a small crypto mining company, threaten to mine bitcoin and get paid out not to.
deleted 3y ago
[deleted]
boringg 3y ago
It's called demand management / demand response / frequency response. I think that line sounds like a bit of click bait as there isn't much context around it. I would imagine that the crypto operations also pays a lot of money for generation services - so knowing how much it purchases for electricity vs how much it conserves would add a lot of context. Stating that they get millions (loose numbers) from DM/DR programs is pretty soft reporting and they are providing a grid stabilizing service. The argument that retail consumers can't get money from DR programs i'm not sure is accurate though don't know what ERCOT currently offers for residential consumers. I know of services that allow consumers to cash in through smart thermostats etc (OhmConnect). Also its a lot cheaper to get a couple large consumers to reduce their usage then aggregating over a large group of houses. Now if you are trying to argue that this use case for the electricity is wasteful thats another argument or that Texas handling of the grid has been challenged especially the natural gas fiasco - also another argument.
amluto 3y ago
Is it? There’s not nearly enough information to tell. Austin Energy appears to charge about 10 cents/kWh (interestingly, it’s comparable across all service classes if I read the tariff sheet right). They pay up to $80/kW saved on average (across all events, I think) [0], I think annually. The webpage is vague. So Austin Energy is effectively paying $80/kW/year of capacity available on 10 minutes notice. 1 kW for a whole year is 8766 kWh, which would cost about $876. And you need to actually be using that kW to resell it as average demand response, so this program is about a 10% discount for being willing to shut down on 10 minutes notice. Or alternatively, you get 10% off in exchange for reducing your SLA a bit :) Hate bitcoin miners all you like, but the actual payment seems quite reasonable. [0] https://savings.austinenergy.com/commercial/offerings/load-management/commercial-demand-response https://savings.austinenergy.com/commercial/offerings/load-m...
- cozzyd 3y ago
  What if you only run the 1% of the year that you think is most likely to require spare capacity? (hopefully they have safeguards against that?)
  - amluto 3y ago
    It seems they only pay if the metered usage shows a reduction.
scoofy 3y ago
I grew up in Texas. I honestly think the main problem with the politics there is that they have never had to deal with limited resources, basically ever. Food, water, fuel, land, education, basically everything a society could want was bountiful there. In my lifetime however, that has changed in certain areas. One of the reasons why I'm so obsessed with transportation alternatives is that I came of age as Austin went from an arguably perfect highway capacity, then suddenly tipped into an unfixable accelerating traffic nightmare. Watching a finite resource (highway capacity) suddenly cross a depletion threshold, and cascade out of control really effected me. Once it happens, nothing can really be done about it except at enormous cost. We are now seeing the same happening with power capacity. We will soon see it with water as the Ogallala Aquifer disappears. The type of politically palatable libertarianism that thrives in most of Texas, require effectively unlimited access to resources.

ftxbro 3y ago

is this what they mean by privatizing profits and socializing losses

HumblyTossed 3y ago
No, this is called, "It never trickled down, it only funneled up!"
refurb 3y ago
It’s a cute saying, but that really doesn’t make sense in this situation. How is society taking a loss?

wombat-man 3y ago

Maybe they can just price electricity at different tiers of use. Or home vs business rates. Charge crypto farms more, especially if the grid is struggling.

hardware2win 3y ago
Wat? There isnt already such a thing?
- runnerup 3y ago
  There is. Pricing is split mostly along residential vs. commercial vs. industrial although there’s a few more layers of discrimination based on usage patterns and “power factor” (reactive vs capacitive load).
runnerup 3y ago
Texas’ strategy is to encourage additional growth in the crypto mining sector because ostensibly they use a lot of power during off-peak days/hours which supports capital payback but also is flexible enough to turn off their load when the grid production is over stressed, so they theoretically won’t contribute to blackouts. Not sure if this thinking is fully correct, but on its face it’s at minimum not completely absurd. Also I think some of the Texas leadership is financially or emotionally invested in cryptocurrency.
one_level_deep2 3y ago
That would require admitting that the free market can't solve the problem, and likely makes it worse.
dcchambers 3y ago
Texas would never do anything that makes them appear 'anti-business' though. It goes against the entire political ethos of the folks in charge down there.
yalogin 3y ago
That doesn’t gel with lobbyists.
keep_reading 3y ago
They already do this. Commercial rates are cheaper than residential rates. (Residential customers are getting ripped off, honestly)
toomuchtodo 3y ago
Texas needs a capacity market, where generators are paid based on their must run status. They choose not to previously because of politics (prioritizing low cost over resiliency). The PUC is working to fix this ("performance credit mechanism"). https://www.texastribune.org/2023/03/01/texas-power-market-public-utility-commission-electricity-credits/ https://www.texastribune.org/2023/03/01/texas-power-market-p...

lukev 3y ago

The original idea behind this is sound. Because production and consumption must net to ~0, from the grid's perspective cutting load is just as valuable as providing generative capacity. Imagine you own a factory that typically runs 24/7 and is part of the system's base load. There is a material cost for you to shut down production. These structures were set up to make it economically viable to have these types of installations shut down in extreme events and function as "virtual power plants" (remember, lowering base load is physically and economically equivalent to providing additional generation.) So far, this kind of makes sense. But unfortunately the same framework can also be applied to cryptocurrency operations, where it really does not make intuitive sense. Largely, IMO, because Bitcoin is so piggish for energy for so little societal value to start with.

no_wizard 3y ago
I have a friend who works in the energy industry specifically targeting power grid management. It is far easier for power companies to manage power loss for things with consistent power usage (low variance) than high variance / inconsistent power loads. Businesses tend to be very consistent, even if their power draw is high, like manufacturing or hospitals etc. Residential power tends to be more variant and harder to fine tune for because it can spike quite suddenly in unexpected ways and tends to add more base load over time. Therefore, it’d actually make more sense for power companies to buy people homes in other states if lowering base load is a concern, since residential is where all the major issues are for load balancing, no?
- drewchew 3y ago
  Would it help if the state were to provide tax incentives for in home battery backups?
  - boringg 3y ago
    A lot of states are looking into large battery facilities specifically for frequency regulations.

HumblyTossed 3y ago

So... start a "cryptocurrency" business and get paid to not use electricity. I mean, if that's not a good way to funnel money from the lower classes to the rich, I don't know what is.

dylan604 3y ago
I want to buy up all of the old readily available GPUs. No need to fight over new latest gen GPUs to actually produce coins. You just need equipment that looks like you can do mining. Then, voluntarily not mine anything so the power company pays you. That is the actual business model to not ever mine anything.
- netrus 3y ago
  I guess you also need to draw and pay for a lot of electricity most of the time to get that kind of deal.
  - dylan604 3y ago
    I'm sure there's a simple circuit that can put a load on the mains in a way that doesn't cause fires or electrocute anyone
kentonv 3y ago
You joke but in August the biggest Bitcoin mine in North America got paid 3.5x more by the utility to turn their rigs off than they made in actual Bitcoin mined -- and they say openly that collecting credits is core to their strategy. https://www.cnbc.com/2023/09/06/texas-paid-bitcoin-miner-riot-31point7-million-to-shut-down-in-august.html https://www.cnbc.com/2023/09/06/texas-paid-bitcoin-miner-rio...
- xwdv 3y ago
  Well that’s it then. I will startup a small crypto mining company, threaten to mine bitcoin and get paid out not to.

deleted 3y ago

[deleted]

boringg 3y ago

It's called demand management / demand response / frequency response. I think that line sounds like a bit of click bait as there isn't much context around it. I would imagine that the crypto operations also pays a lot of money for generation services - so knowing how much it purchases for electricity vs how much it conserves would add a lot of context. Stating that they get millions (loose numbers) from DM/DR programs is pretty soft reporting and they are providing a grid stabilizing service. The argument that retail consumers can't get money from DR programs i'm not sure is accurate though don't know what ERCOT currently offers for residential consumers. I know of services that allow consumers to cash in through smart thermostats etc (OhmConnect). Also its a lot cheaper to get a couple large consumers to reduce their usage then aggregating over a large group of houses. Now if you are trying to argue that this use case for the electricity is wasteful thats another argument or that Texas handling of the grid has been challenged especially the natural gas fiasco - also another argument.

amluto 3y ago

Is it? There’s not nearly enough information to tell. Austin Energy appears to charge about 10 cents/kWh (interestingly, it’s comparable across all service classes if I read the tariff sheet right). They pay up to $80/kW saved on average (across all events, I think) [0], I think annually. The webpage is vague. So Austin Energy is effectively paying $80/kW/year of capacity available on 10 minutes notice. 1 kW for a whole year is 8766 kWh, which would cost about $876. And you need to actually be using that kW to resell it as average demand response, so this program is about a 10% discount for being willing to shut down on 10 minutes notice. Or alternatively, you get 10% off in exchange for reducing your SLA a bit :) Hate bitcoin miners all you like, but the actual payment seems quite reasonable. [0] https://savings.austinenergy.com/commercial/offerings/load-management/commercial-demand-response https://savings.austinenergy.com/commercial/offerings/load-m...

cozzyd 3y ago
What if you only run the 1% of the year that you think is most likely to require spare capacity? (hopefully they have safeguards against that?)
- amluto 3y ago
  It seems they only pay if the metered usage shows a reduction.

scoofy 3y ago

I grew up in Texas. I honestly think the main problem with the politics there is that they have never had to deal with limited resources, basically ever. Food, water, fuel, land, education, basically everything a society could want was bountiful there. In my lifetime however, that has changed in certain areas. One of the reasons why I'm so obsessed with transportation alternatives is that I came of age as Austin went from an arguably perfect highway capacity, then suddenly tipped into an unfixable accelerating traffic nightmare. Watching a finite resource (highway capacity) suddenly cross a depletion threshold, and cascade out of control really effected me. Once it happens, nothing can really be done about it except at enormous cost. We are now seeing the same happening with power capacity. We will soon see it with water as the Ogallala Aquifer disappears. The type of politically palatable libertarianism that thrives in most of Texas, require effectively unlimited access to resources.