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Crypto mining is a very energy-intensive activity demanding ridiculously huge amounts of electricity. For utility companies, this presents an opportunity to bag a huge amount of revenue if a crypto mining firm decides to put up shop in its area. The problem, however, is that current electricity infrastructure may not be sufficient to handle the huge energy requirements of mining firms.

While these coins may be digital, they are not created out of thin air. Mining rigs or computers specifically configured for crypto mining use their computational power to process transactions and secure the crypto network, according to Bitcoin’s site. For all their hard work, these rigs will be rewarded with new cryptocurrencies in the process.

Unfortunately, these mining rigs are power hogs, which makes crypto mining quite an expensive affair. According to estimates by Morgan Stanley analysts led by Nicholas Ashworth, mining cryptocurrencies could consume a staggering 140 terawatt-hours of electricity in 2018, reports Fortune.

Logically, power utility companies should welcome all crypto mining firms that wish to establish their operations inside their service area. After all, it would mean a huge revenue boost to the power company.

But the problem is that because of the high-energy crypto mining, a flock of mining firms deciding to open up shop at the same locality might put too much strain on the existing energy grid. This actually happened in Washington State’s Grant County Public Utility District, which was faced with the additional demand of 1,700 megawatts from more than 100 crypto miners, as reported by CBS News. This is almost triple Grant County PUD’s average electric load, which only averaged 600 megawatts.

Commenting on the news, Grant County Public Utility District general manager Kevin Nordt said:

“We, like any other utility, aren’t set up to handle that kind of new demand. Trying to get that kind of infrastructure built would take many, many years and require millions if not billions of dollars in investment. There’s a lot of risk involved because it’s an nascent industry with a lot of unknown variables.”

Indeed, meeting additional power load requirements from crypto mining firms could be solved by putting up additional electricity infrastructures such as new power plants and transmission lines. But, as pointed out by Nordt, many utility companies are reluctant to commit to that level of expenditure in order to meet the energy needs of an industry that is still relatively new and untested. The common concern is that the current energy demand from crypto mining may not last for long, leaving behind underutilized power plants and debt-laden utility firms in its wake.

It might take some time for the cryptocurrency industry to prove to power firms that it is here to stay. Meanwhile, mining companies are looking for ways to make the existing situation work for both miners and power utilities.

One suggestion is for mining companies to use a “utility’s ‘peak load’ capabilities that often sit idle.” Miners could power their operations with the extra unused electricity throughout the year, but they have to minimize mining operations in hot summer months when utility firms need more power than usual to meet the cooling needs of households and other business establishments.

As JohnPaul Baric, chief executive of the MiningStore, puts it:

“The actual physical mining units would just sit there idle and the staff would have the day off. The miners would know for those four or five hours on that hot July day, they will be disconnected.”

Crypto Mining Firms Could Use Utility’s Underutilized Peak Load Capabilities to Power Their Operations was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.

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