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US Department of Energy Begins Data Collection on Crypto Mining Energy Use

Algoine News
Summary:
The U.S. Department of Energy (DOE) has launched a compulsory data collection initiative to calculate the energy consumption of the country's crypto mining sector. In response to increased Bitcoin prices and subsequent mining activity, the DOE's research body, the Energy Information Administration (EIA), is conducting a survey of domestic mining companies' power usage. Despite facing skepticism from the crypto community, the EIA aims to develop a clear picture of crypto energy use patterns, identify where power is sourced, and pinpoint regions with high crypto mining activity.
The U.S. Department of Energy (DOE) has initiated a compulsory collection of data to ascertain a "baseline snapshot" of the nation's cryptocurrency mining industry's power usage. As reported earlier, the Energy Information Administration (EIA) under the DOE is leading a preliminary survey to gauge the electric consumption of domestic mining firms. The DOE's statistical body got the green light to gather necessary data in January 2024. In pursuit of more information about the data collection operation and its rationale, the EIA was contacted. Morgan Butterfield, representative of EIA media relations, pointed to a memorandum from the agency's Administrator, Joe DeCarolis, which called for emergency clearance. It emphasized the belief of the organization that the soaring price of Bitcoin is fuelling an increase in mining activity within the U.S. The surge in Bitcoin price, by approximately 50% over the past three months, incentivizes more cryptomining activity, thereby intensifying electricity consumption, DeCarolis said. The crucial approval for the emergency survey during a significant cold snap that led to high electricity demand in the U.S came at a strategic time. DeCarolis warned of possible effects of escalated crypto mining and electricity systems under stress that could increase demand, potentially impacting system operations and consumer costs. According to Butterfield, the EIA is assembling data to obtain a "baseline snapshot" of the crypto mining companies surveyed. This involves pinpointing the rate of change in mining activity among mining firms, recognizing sources of electricity for U.S. crypto miners, and locating regions with high mining activity concentrations. All commercial cryptocurrency mining facilities in the U.S. deploying a proof-of-work (PoW) consensus protocol are expected to participate in the survey. The DOE’s Office of Management and Budget (OMB) has approved this emergency request, enabling the EIA to gather data monthly until July 2024. The survey will also consider self-produced energy by mining firms, including facilities with no impact on the national power grid. Butterfield confirmed that the EIA will issue a public notice for comments and feedback on the survey for cryptocurrency mining facilities in February. In the wake of the mandatory survey announcement, the EIA released a technical analysis report that outlines cryptocurrency mining basics and estimates of local mining industry power consumption. However, the emergency authorization approving the EIA's survey of the U.S. cryptocurrency miners received scepticism from certain sections of the nation's mining and Bitcoin community. Some public figures have expressed concern over data collection efforts by the DOE. On the other hand, the EIA's analysis recognizes participation of cryptocurrency mining operations in programs known as demand-responses, where large power consumers reduce use during peak demand times. The EIA mentioned the Electric Reliability Council of Texas grid operator's Large Flexible Load (LFL) program as an example that allowed many industrial consumers, including cryptocurrency miners, to decrease their electricity usage during peak demand times.

Published At

2/2/2024 5:00:00 PM

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