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US Government Assesses Crypto Mining’s Electricity Consumption

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US Government Assesses Crypto Mining's Electricity Consumption

The United States Department of Energy (DOE) is initiating a mandatory data collection campaign to obtain information on the energy consumption of the country’s cryptocurrency mining industry. The DOE’s Energy Information Administration (EIA) will conduct a survey to measure the electricity usage of local mining firms. The EIA received approval for its “emergency request” to collect data in January 2024. The agency believes that the increasing price of Bitcoin is driving more mining activity in the United States, resulting in higher electricity consumption. The EIA aims to gather data to develop a baseline understanding of the crypto mining companies in the sample, including the rate of change in mining activity, electricity sources, and regions with concentrated mining. Commercial cryptocurrency mining facilities in the US using the proof-of-work (PoW) consensus mechanism are required to participate in the survey. The EIA will collect data monthly until the end of July 2024 and will consider energy self-produced by mining companies that do not impact the power grid. The EIA will also publish a notice calling for public comments and feedback on the survey.

The EIA released a technical analysis report that provides estimates of cryptocurrency mining electricity usage in the US. The report considers both top-down and bottom-up approaches to estimate power consumption. The EIA’s estimates based on the Cambridge Bitcoin Electricity Consumption Index (CBECI) suggest that Bitcoin mining in the US accounts for 0.6% to 2.3% of the national electricity demand in 2023. The EIA also conducted a bottom-up approach, identifying 137 US-based mining facilities and estimating their maximum electricity capacity. The report estimates that the high-range electricity usage of these facilities would be around 70 terawatt hours (TWh).

The emergency order for the EIA’s survey has been met with skepticism from some members of the mining and Bitcoin community. They view it as a government overreach and question the need for collecting such data. The EIA’s analysis report acknowledges that cryptocurrency mining operations have participated in programs to curtail electricity use during peak demand periods. The report mentions the Electric Reliability Council of Texas’ Large Flexible Load (LFL) program, in which cryptocurrency miners are significant participants. The EIA’s survey aims to provide a comprehensive understanding of the energy consumption of the US cryptocurrency mining industry.

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