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Dumb question - how does consuming energy help stabilize the grid? I thought if you used more than capacity, then the grid breaks down - kind of like the circui

Dumb question - how does consuming energy help stabilize the grid? I thought if you used more than capacity, then the grid breaks down - kind of like the circuit breaker at home.

toenail 3y ago
If there is more demand for power energy producers have an incentive to create the capacity to provide more power. Which comes in handy when you need more power, e.g. during a heat wave.
w-ll 3y ago
It's hard to start and stop traditional power generators (ng/coal/nuclear), but it is easy to start and stop the bitcoin mining rigs. grid likes to be at capacity, and its easy for the miners to scale up and down to fit the gap.
nullc 3y ago
To avoid brownouts the generation capacity must match or exceed the peak demand. This is particularly hard when there is a lot of renewables on the grid because their minimum output is very low compared to their average output but the renewables are inexpensive relative to their average output compared to other sources so the utility prefers to build more and more renewables if it can. To address this, utilities must build generation capacity that sits idle. This has terrible economics. Instead, utilities can take a portion of the money that they would have spent building idle capacity and pay it to users who are able to quickly shut off when demand approaches capacity (or approaches the 'cheap' capacity). This is equivalent to selling these parties spare capacity at a discounted rate. So consuming energy but being willing/able to stop on a moments notice stabilizes the grid by (1) making it economical to have worst case capacity capacity closer to the peak demand, and (2) getting out of the way when that capacity is needed. The key point is that they can immediately turn off on the utilities request. This is easier for bitcoin miners than it is for many industrial scale energy users (though there are other ones who do this too).

Dumb question - how does consuming energy help stabilize the grid? I thought if you used more than capacity, then the grid breaks down - kind of like the circuit breaker at home.

toenail 3y ago

If there is more demand for power energy producers have an incentive to create the capacity to provide more power. Which comes in handy when you need more power, e.g. during a heat wave.

w-ll 3y ago

It's hard to start and stop traditional power generators (ng/coal/nuclear), but it is easy to start and stop the bitcoin mining rigs. grid likes to be at capacity, and its easy for the miners to scale up and down to fit the gap.

nullc 3y ago

To avoid brownouts the generation capacity must match or exceed the peak demand. This is particularly hard when there is a lot of renewables on the grid because their minimum output is very low compared to their average output but the renewables are inexpensive relative to their average output compared to other sources so the utility prefers to build more and more renewables if it can. To address this, utilities must build generation capacity that sits idle. This has terrible economics. Instead, utilities can take a portion of the money that they would have spent building idle capacity and pay it to users who are able to quickly shut off when demand approaches capacity (or approaches the 'cheap' capacity). This is equivalent to selling these parties spare capacity at a discounted rate. So consuming energy but being willing/able to stop on a moments notice stabilizes the grid by (1) making it economical to have worst case capacity capacity closer to the peak demand, and (2) getting out of the way when that capacity is needed. The key point is that they can immediately turn off on the utilities request. This is easier for bitcoin miners than it is for many industrial scale energy users (though there are other ones who do this too).