Let me present to you an alternative: a strong regulator requires said utilities to cover absolute peak demand without any blackouts whatsoever. If the utility does not manage that then pull their license and tell them to get the fuck out and put up the license for tender with the obligation to cover the required demand. Do that not just state wide but work with federal regulators so that such shitty regulator won't be able to operate in ANY other state. Guess how fast those utilities are gonna upgrade their capacity. The problem today are shit ass weak regulators who are either blatantly stupid or overtly corrupt and collude with the same corporations they are expected to regulate.
Let's be real. Texas apparently uses lots of renewable energy. If the wind isn't blowing or the sun isn't shining, where does this energy come from? There is no way a regulator could require a utility to be able to cover absolute peak demand. Its just like a bank. Do you expect them to have 5 millions dollars in 20 dollar bills on hand just in case a rich customer decides to go crazy and come in for a cash withdrawl? Or ever go to a grocery store and see they ran out of something that happens to be on sale? Do you propose the store should have their business license revoked just because some items aren't in stock? To put it another way, if a utility was required to have all the extra capacity on hand, power would be shit loads more expensive. And because it takes hours to get a plant up and running, they would literally have to be running all the time just in case too many people flipped a light switch. It just isn't feasible.
A more detailed article in Feburary 2023 I like the comparison to Amazon data centers... there is no other industry that can be paid off to curtail power usage https://www.cnbc.com/2022/02/03/win...bitcoin-miners-shut-off-to-protect-ercot.html
you are rational in your response. But think about how fucked up ERCOT is to have to pay 1 customer so many millions of dollars. What a disaster in capacity planning! RIOT is clearly taking advantage of it. The issue isn’t RIOT, it’s the Texas power grid. And the retail customers pay for it. I run multiple manufacturing plants. We have the same agreements in place with our local power companies. Like bitcoin mining we have large power consuming machines. In 13 years, we’ve been asked only once in one plant to shut down for two hours. The amount of money we got was negligible but enough to cover the shut down costs of the plant (lost material, wages)
Absolutely can a regulator require that, why not? We require other regulated industries to provide us with what they promised. The problem here seems more your pro corporation, winner take all capitalist mentality. Many other highly successful countries and societies operate on a social market capitalist model where consumers come first, not corporations.
I have to agree ERCOT overall management of Texas' energy needs is chit compared to FL, AZ, CA, NM and other southern hot weather states and a big part of it is its laissez faire thinking - let the market do what markets do. IMO life sustaining Utils should not be run that way. But bitcoin miners are taking advantage of it just like other industries.
Hmm. Makes you wonder if it's ineptitude on the part of key ERCOT personnel, or perhaps something a bit more nefarious.
Keep in mind the reason that RIOT makes money when they are down is because they lose money whe they are operating. As a customer I would want guaranteed service. If the power company suddenly shut the power off without warning or compensation I can see lots of lawsuits. Better to have a method of managing the consumption. Also at less than peak you have a customer, that's also wworth paying for.
Thank-you. I haven't studied this enough, nor do I know the details of the contract. I'm sure both sides have done a cost/benefit analysis. At some point on a curve, I'm sure a shutdown is advantageous to both sides. I look at this as no different than a trading strategy. At some point, you might suffer a 20% drawdown, but if in between these periods you made 50%, and that drawdown isn't expected to happen for a long enough time frame you don't expect back to back drawdowns, its likely a good strategy. The idea as MW is suggesting, to require the utility to have max power available at all times is simply crazy. Its like requiring the US military to have an aircraft carrier group parked outside of every hostile country just in case something happens. Of course the military would love this, but imagine the bill. Perhaps the numbers are outrageous right now for what the miners are getting, but I believe much of this is because of reliance on wind and solar, which is proving to be more intermittent than initially thought perhaps. So perhaps the payments are higher than expected, but the fact that the grid hasn't gone down is evidence of a policy that is somewhat working.