A federal agency will start requiring commercial cryptocurrency miners to report on their electricity consumption. The U.S. Energy Information Administration has obtained an emergency clearance allowing it to begin collecting data on a monthly basis from February through July 2024. EIA's new Form EIA-862, the "Cryptocurrency Mining Facilities Report", is mandatory for all commercial cryptocurrency mining facilities in the U.S. Failure to file could result in criminal and civil fines and penalties that could exceed $10,000 per violation per day.
According to EIA, electricity demand from cryptocurrency mining operations in the United States has grown rapidly in recent years. While EIA doesn't have the full data it would need to evaluate crypto's share of domestic power use, EIA's "preliminary estimates suggest that annual electricity use from cryptocurrency mining probably represents from 0.6% to 2.3% of U.S. electricity consumption."
EIA says the growth of crypto load "has drawn the attention of policymakers and grid planners concerned about its effects on cost, reliability, and emissions." EIA continues, "As cryptocurrency mining has increased in the United States, concerns have grown about the energy-intensive nature of the business and its effects on the U.S. electric power industry. Concerns expressed to EIA include strains to the electricity grid during periods of peak demand, the potential for higher electricity prices, as well as effects on energy-related carbon dioxide (CO2) emissions." For example, several U.S. Senators and Representatives sent letters to U.S. Environmental Protection Agency Administrator Michael Regan and Secretary of Energy Jennifer Granholm in July 2022 and February 2023, asking the EPA and Energy Department to "require reporting of energy use and emissions from cryptominers."
To model crypto mining's effects on the grid, EIA performed two kinds of analysis: a "top-down approach" based on the Cambridge Bitcoin Electricity Consumption Index (CBECI), and a "bottom-up approach" based on identifying specific U.S. cryptocurrency mining operations and estimating their existing electric demands. Under the top-down approach, EIA estimates electricity usage from Bitcoin mining based in the United States to range from 25 TWh to 91 TWh, amounting to 0.6% to 2.3% of the nation's 2023 electricity demand in 2023 -- comparable to three million to six million homes, or at least as much annual electricity usage as entire states like Utah or West Virginia.
Under the bottom-up approach, EIA tried to "identify as many U.S. cryptocurrency mining facilities as possible". EIA ultimately identified a total of 137 facilities, of which EIA has location and capacity data for 52 facilities. These sites are located in 21 states, with most in Texas, Georgia, and New York. "Of the 137 facilities identified, we have identified maximum electricity use at 101 of those facilities, which we estimate to be 10,275 MW. This amount compares with an average annual power demand of about 450,000 MW in the United States, representing a share of 2.3%."
EIA notes that its surveys of power plants have revealed that some have been used for cryptocurrency mining. Considering "a group of five small U.S. power plants in Montana, New York, and Pennsylvania where cryptocurrency mining has occurred", EIA notes that these plants' generation "rose sharply beginning in 2021 when cryptocurrency miners established operations. ... Prior to the installation of the cryptocurrency mining equipment, output from the five plants had been much lower. The previous underutilization of these power plants has attracted cryptocurrency miners to these facilities given prospects of dedicated electricity at low rates."
Going forward, EIA "will be conducting a mandatory survey focused on systematically evaluating the electricity consumption associated with cryptocurrency mining activity, which is required to better inform planning decisions and educate the public." The survey instrument is Form EIA-862, which collects data on the energy usage, and related characteristics, of commercial cryptocurrency mining facilities in the U.S.
Form EIA-862 asks questions about cryptocurrency validation using a proof-of-stake consensus mechanism as well as cryptocurrency mining using a proof-of-work consensus mechanism. For each reportable facility, Form EIA-862 solicits information including total electricity consumption, the percentage of electricity used for cryptocurrency mining, details on the facility's cryptocurrency mining equipment, and copies of the facility's electricity bills. EIA says it will use data gathered during the survey to inform its approach going forward.
EIA has published its forms of several letters associated with the EIA-862 survey, including a Welcome letter informing entities of the need to respond and a Reminder letter. EIA also released a form of Escalation letter, which reminds respondents that the report is mandatory under federal law, that failure to comply may result in criminal fines, civil penalties, and other sanctions, that making false, fictitious or fraudulent statements is a criminal offense, and that any failure to report "may result in a civil penalty of not more than $10,633 each day for each violation".
No comments:
Post a Comment