Tech Insights: Coping With Crypto

Cryptocurrency mining presents electric cooperatives with large, near-continuous loads that can come with challenges when demand peaks. With recent forecasts predicting significant load growth nationally over the next five years, the need to manage large peak loads is only expected to grow.

Central Electric Power Cooperative, a generation and transmission co-op based in Columbia, South Carolina, has designed a pass-through wholesale rate for its 19 member distribution co-ops intended to incentivize crypto-miners to shut down during peak load periods.

“We developed a rate for crypto loads, a highly dynamic speculative load rate,” says Cole Price, Central’s executive vice president for member services. “Speculative” refers to the transitory nature of crypto-miners, who move often. The rate reflects energy, demand and operational/transmission costs and can as much as double the crypto-member’s costs during a peak.

Cryptocurrency miners mint bitcoin and similar currencies by solving complex math problems that require powerful computer processing that draws large amounts of power. Central currently has about 60 to 70 megawatts of cryptocurrency mining load on the lines of its member cooperatives, Price says.

Central’s dynamic rate “covers our energy and variable costs, and yet it happens to be affordable for them,” Price notes.

If the crypto-miners continue to operate during a one-hour-a-month peak, he adds, they will pay a “hefty” dynamic demand charge. Signaling the crypto-operations when peaks are approaching, Price says, “gives them the opportunity to avoid our power demand charge.”

The rate has shifted crypto-mining operations away from peak, Price says, benefiting the G&T and its members while saving the crypto-operations money.

“They’re scaling back to zero almost every month,” he says.

Crypto-mining is expected to play a role in national load growth that could average 3% annually over the next five years, according to an analysis by Gridstrategies. Price believes a dynamic load rate could move crypto-miners off peak at other cooperatives.

“I think you would see that around the country,” he says.

This article was originally published on the Rural Electric (RE) Magazine by Reed Karaim