The Texas power grid is getting slammed with requests for new connections, and it’s not BTC miners driving most of the surge this time. ERCOT, the organization that manages the state’s electricity, has recently seen a surge in interconnection applications, reaching over 164 gigawatts, with forecasts indicating a queue of 266 gigawatts for next year. A huge chunk of that comes from artificial intelligence (AI) companies and data centers that need constant, massive amounts of power. For the miners who have made Texas their home base, this rush is starting to create real headaches.
Texas has been a magnet for BTC mining over the last few years. Cheap wind power in the west, flexible rules, and a government that welcomes the industry all played a part. Big players, such as Riot Platforms (NASDAQ: RIOT) and Marathon Digital (NASDAQ: MARA), and smaller outfits set up shop, often right next to wind farms. Miners can quickly turn their machines off when demand spikes elsewhere, which helps keep the grid stable and earns them credits or lower rates.
That flexibility has been a win-win. ERCOT likes having loads that respond fast, especially with so much renewable energy coming online. Miners are sometimes paid to curtail production, and they keep costs low the rest of the time. It’s one reason why the state hosts more hashrate than anywhere else in the United States.
Now AI is changing the game. These data centers don’t shut down easily. Training models or running inferences takes steady power, day and night. Companies like Google (NASDAQ: GOOGL), Microsoft (NASDAQ: MSFT), and Amazon (NASDAQ: AMZN) are lining up for tens of gigawatts, far outpacing the total of a couple of gigawatts used by mining across the state.
The problem is that the grid can’t expand fast enough. Building new transmission lines takes years, sometimes five to seven. Until those are done, ERCOT has to prioritize who gets connected first. Officials have warned that delays are inevitable, and some projects might get pushed back or rejected.
Miners are already feeling it. Some report more frequent curtailment orders or higher fees for ancillary services that keep the grid balanced. In parts of West Texas, where wind blows strongly but transmission is limited, spot prices can jump during shortages. A few operators say their effective power costs crept up this fall, eating into margins when hash price is already low.
People in the industry are pushing back. Groups like the Texas Blockchain Council are lobbying lawmakers to protect mining as a “critical” or “flexible” load. There’s talk of new laws that would give preference to operations that help stabilize the grid. Governor Abbott has been supportive in the past, but balancing AI growth (which brings jobs and tax revenue) with existing users is tricky.
Some miners aren’t waiting for policy fixes. They’re building hybrid sites that can host both mining rigs and AI servers. Core Scientific (NASDAQ: CORZ) has big deals in place for exactly that, turning mining halls into data centers when it makes more sense. Others look outside Texas, scouting hydro power in Canada or even nuclear deals elsewhere.
On the cost side, every extra cent per kilowatt-hour matters right now. With BTC below $90,000 and difficulty at records, many fleets are barely breaking even. Older machines get shut down first, and companies delay buying new ones.
If the grid stays constrained, Texas could lose some of its edge as the go-to spot for mining. Rivals in other states or countries with available power would love to pick up the slack.
However, many people believe the state can solve the problem. In addition to bringing in money, miners contribute to the usage of extra renewable energy that would otherwise go to waste. When combined with clever incentives, Texas may be able to satisfy both digital currency operators and AI behemoths. Everyone is hoping that the system will withstand the impending winter storms without significant blackouts that could damage everyone’s reputation.
Still, the industry is currently plagued by uncertainty. Because the next queue report may change plans for expansions or even daily operations, miners keep a careful eye on ERCOT updates.
It serves as a reminder that power is essential to mining. Access to reasonably priced, dependable electricity determines who succeeds and who falls behind, regardless of how effective the machines become or how high Bitcoin eventually rises.
Watch | Bitcoin mining in 2025: Is it still worth it?
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Source: https://coingeek.com/texas-grid-faces-massive-overload-from-ai-demand/
