Flexible Load and the Electricity Grid: A Bitcoin Story

Over the past few years, a strange industrial electricity customer has taken the industry by storm: Bitcoin mining. In 2021, the nascent Bitcoin mining industry, which had primarily been in China, shipped massive amounts of hardware and opportunity to capture global market share to the United States. Savvy investors flocked to deregulated electricity markets to capture recently created price distortions in spot electricity pricing or to regulated markets with friendly tariffs. The Bitcoin mines themselves look more like data center infrastructure than any traditional mine. They are large superstructures housing rows of racks of machines, sometimes immersed in fluid, or, for more desolate or rapidly deployed locations, mobile shipping containers, including all the electrical and IT infrastructure needed to operate and just looking for a medium-voltage hookup. Some of these ventures flourished and were a net good to their community by providing new revenue to suppliers, struggling colocated generation assets, tax revenue to communities, and opportunities for skilled labor that had previously been scarce. Other ventures proved to be absolute failures or worse, fraudulent, whether it was through taking on huge exposure and leaving before paying and before power suppliers understood the risk, or through taking advantage of small utilities' infrastructure buildout, excited about the idea of a large consumer to replace their dwindling customer base, only to again leave before paying the bill.