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Dan Patrick criticizes crypto-miners, data centers
"We need to take a close look at those two industries. They produce very few jobs compared to the incredible demands they place on our grid… We want data centers, but it can’t be the wild, wild west of data centers and crypto miners crashing our grid and turning the lights off."
DALLAS - Lt. Gov. Dan Patrick made surprising statements about a fast-growing business sector in Texas. He suggested large data centers and crypto-mining operations need more scrutiny.
That's based on a projection of how much power demand those computer centers will need.
ERCOT's CEO says Texas continues to see explosive growth and warned state lawmakers on Wednesday that peak demand on the power grid could double in six years.
In turn, Lt. Gov. Dan Patrick posted on social media that crypto miners and AI data centers will be responsible for over 50% of that growth.
HOUSTON, TEXAS - NOVEMBER 14: Bitcoin mining machines in the development area of Lancium on Monday, Nov. 14, 2022 in Houston. The Houston-based company will launch its platform this week that will allow bitcoin mining operations and data center to r …
The lieutenant governor put ERCOT's CEO on blast after Pablo Vegas told a senate committee Wednesday that artificial intelligence data centers and bitcoin mining could double peak demand on the power grid within six years.
"So we're talking a magnitude of 10 to 30 times of energy use for an AI data center versus a traditional one, so the impact is really significant," Vegas said. "How many are coming? That's still to be determined."
Patrick claims crypto miners and data centers will be responsible for over 50% of added growth in Texas in the coming years.
In a lengthy post on X, Patrick said, "We need to take a close look at those two industries. They produce very few jobs compared to the incredible demands they place on our grid… We want data centers, but it can’t be the wild, wild west of data centers and crypto miners crashing our grid and turning the lights off."
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SMU economist Mike Davis isn't surprised by Patrick's comments, despite the fact that the state's Republican leadership is very proactive in trying to attract businesses to the state.
"When we do have another blackout, whether it's summer or winter time, all politicians — not just Dan Patrick — want to be able to say, ‘I tried to fix it,’" Davis said. "So they're trying to get out ahead of this thing and say, ‘We've figured out this thing, solved this problem without costing you, the taxpayers, any money.’"
But energy expert Joshua Rhodes says the outlook for those power-hungry computer farms is not all bad.
"So there's a couple things with bitcoin mining. One, it can be a flexible load," he said. "And that can be helpful in a grid that needs more demand response and more flexibility."
Rhodes added that there has been a lot of new generation on the market.
"We've built a lot of wind, we built a lot of solar, but also a lot of energy storage that allows us to move some of that energy around," he said.
Texas power grid operator looks to keep up with increasing demand
Explosive population growth, greater demand for data centers and evolving AI are fueling the Texas economy and a greater demand for energy.
Davis pointed out that while it's true data centers themselves don't bring jobs, if those AI data centers don't exist, all of those high-paying tech jobs everyone says they want can't exist.