Texas paid bitcoin miner Riot $31.7 million to shut down during heat wave in August
During the crypto boom of 2021, Riot Platforms was raking in cash from bitcoin mining. Now the company is losing so much money that it’s counting on energy credits from selling power back to the Texas grid to keep its costs under control.
Riot said on Wednesday that it earned $31.7 million in energy credits last month from Texas power grid operator ERCOT. The company generated the credits by voluntarily curtailing its energy consumption during a record-breaking heatwave.
The total value of the credits dwarfed the 333 bitcoin the company mined in August, worth about $8.9 million dollars as of the end of the month.
“August was a landmark month for Riot in showcasing the benefits of our unique power strategy,” said Jason Les, CEO of Riot, in the company’s press release. “The effects of these credits significantly lower Riot’s cost to mine Bitcoin and are a key element in making Riot one of the lowest cost producers of bitcoin in the industry.”
It’s a dramatic strategy shift for Riot, whose revenue soared almost 8,000% in 2021 from booming demand for bitcoin. The crypto market reversed in 2022, leading to a net loss of over $500 million for the year. In the latest quarter, the company lost $27.7 million.
Bitcoin’s recovery this year from 2022’s lows has boosted Riot’s stock, which is up about 230% so far in 2023, closing Wednesday at $11.24. But it’s still way down from its 2021 peak of $77.90.
Bitcoin miners broadly have struggled amid low trading volume, according to an analyst note from JPMorgan Chase on Sept. 1. The firm found that the market cap of the 14 U.S.-listed bitcoin miners it tracked fell 21% in August to $9.7 billion. Riot was the worst-performing stock in that list, falling 39% for the month.
Ballooning energy prices have also helped to drag down profits for the sector, so companies have turned to alternative sources of income.
Riot’s Whinstone mine in Rockdale, Texas.
Riot’s Whinstone Data Center
Paying miners to power down
The Electric Reliability Council of Texas, or ERCOT, has a relatively simple and mutually beneficial relationship with bitcoin miners. The agency, through established “demand response” programs, pays miners to reduce their power so as not to overstress the grid when air conditioners need to run at full blast. In addition to summer difficulties, ERCOT also failed during the fatal winter storm of early 2021.
For years, Riot has been powering down operations at its Rockdale mine, about an hour from Austin, to help ease the burden on the state’s grid.
ERCOT has historically struggled with fluctuating energy prices and sporadic service, so it strikes deals with flexible energy buyers like crypto miners. The agency also counts on bitcoin miners to soak up excess power when there’s too much supply, keeping prices in check.
Texas has made itself an ally to the bitcoin mining industry through credits, but the financial incentives hit a snag in early 2023. A bill to cut off the mining industry from those credits – SB 1751 – passed the Texas State Senate in April, but ultimately stalled out in a House committee.
Instead, state lawmakers passed two mining-friendly bills expanding incentives and cutting red tape for the industry. Those went into effect on Sept. 1.
Whinstone CEO Chad Harris takes CNBC on a tour of the largest bitcoin mine in North America.
The economic equation revolves around how much money the miners are losing by not being up and running. If the grid operators pay the miners a penny more than they would have made from mining in any given hour, then they’ll gladly power down.
“All you have to do is pay the miners slightly more than what they would have made mining for bitcoin that hour,” said bitcoin mining engineer Brandon Arvanaghi, who now runs Meow, a company that enables corporate treasury participation in crypto markets. Arvanaghi calls the setup a “a win-win.”
Marathon’s Fred Thiel previously told CNBC that from his experience, the companies get curtailment requests less than 3% of the time in the course of a year, which he estimates comes to about five to ten hours a month. Even bitcoin miners that haven’t cut a deal with ERCOT sometimes choose to power down at times of peak consumption when prices shoot higher.
Unlike the rest of the continental U.S. that belongs to one of two interconnected grids, 90% of Texas runs on ERCOT, a deregulated and independent network of energy providers that’s not tethered to any other grid in the U.S.
While competition in the market often drives down the price of power as providers compete on cost to capture customers, it also means that there’s less of a safety net baked into the grid. Adding a “controllable load resource” like bitcoin miners to the grid acts as a sort of life insurance policy, or a hedge against disaster.
WATCH: Bitcoin family tracks moon cycles to make investment decisions
If you’ve ever wondered what happens when you combine a fruit cart, a cargo bike, and a Piaggio Ape all in one vehicle, now you’ve got your answer. I submit, for your approval, this week’s feature for the Awesomely Weird Alibaba Electric Vehicle of the Week column – and it’s a beautiful doozie.
Feast your eyes on this salad slinging, coleslaw cruising, tuber taxiing produce chariot!
I think this electric vegetable trike might finally scratch the itch long felt by many of my readers. It seems every time I cover an electric trike, even the really cool ones, I always get commenters poo-poo-ing it for having two wheels in the rear instead of two wheels in the front. Well, here you go, folks!
Designed with two front wheels for maximum stability, this trike keeps your cucumbers in check through every corner. Because trust me, you don’t want to hit a pothole and suddenly be juggling peaches like you’re in Cirque du Soleil: Farmers Market Edition.
To avoid the extra cost of designing a linked steering system for a pair of front wheels, the engineers who brought this salad shuttle to life simply side-stepped that complexity altogether by steering the entire fixed front end. I’ve got articulating electric tractors that steer like this, and so if it works for a several-ton work machine, it should work for a couple hundred pounds of cargo bike.
Featuring a giant cargo bed up front with four cascading fruit baskets set up for roadside sales, this cargo bike is something of a blank slate. Sure, you could monetize grandma’s vegetable garden, or you could fill it with your own ideas and concoctions. Our exceedingly talented graphics wizard sees it as the perfect coffee and pastry e-bike for my new startup, The Handlebarista, and I’m not one to argue. Basically, the sky is the limit with a blank slate bike like this!
Sure, the quality doesn’t quite match something like a fancy Tern cargo bike. The rim brakes aren’t exactly confidence-inspiring, but at least there are three of them. And if they should all give out, or just not quite slow you down enough to avoid that quickly approaching brick wall, then at least you’ve got a couple hundred pounds of tomatoes as a tasty crumple zone.
The electrical system does seem a bit underpowered. With a 36V battery and a 250W motor, I don’t know if one-third of a horsepower is enough to haul a full load to the local farmer’s market. But I guess if the weight is a bit much for the little motor, you could always do some snacking along the way. On the other hand, all the pictures seem to show a non-electric version. So if this cart is presumably mobile on pedal power alone, then that extra motor assist, however small, is going to feel like a very welcome guest.
The $950 price is presumably for the electric version, since that’s what’s in the title of the listing, though I wouldn’t get too excited just yet. I’ve bought a LOT of stuff on Alibaba, including many electric vehicles, and the too-good-to-be-true price is always exactly that. In my experience, you can multiply the Alibaba price by 3-4x to get the actual landed price for things like these. Even so, $3,000-$4,000 wouldn’t be a terrible price, considering a lot of electric trikes stateside already cost that much and don’t even come with a quad-set of vegetable baskets on board!
I should also put my normal caveat in here about not actually buying one of these. Please, please don’t try to buy one of these awesome cargo e-trikes. This is a silly, tongue-in-cheek weekend column where I scour the ever-entertaining underbelly of China’s massive e-commerce site Alibaba in search of fun, quirky, and just plain awesomely weird electric vehicles. While I’ve successfully bought several fun things on the platform, I’ve also gotten scammed more than once, so this is not for the timid or the tight-budgeted among us.
That isn’t to say that some of my more stubborn readers haven’t followed in my footsteps before, ignoring my advice and setting out on their own wild journey. But please don’t be the one who risks it all and gets nothing in return. Don’t say I didn’t warn you; this is the warning.
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Environment
Podcast: Trump/GOP go after EV/solar, Tesla, Ford, GM EV sales, Electrek Formula Sun, and more
In the Electrek Podcast, we discuss the most popular news in the world of sustainable transport and energy. In this week’s episode, we discuss Trump’s Big Beautiful bill becoming law and going after EVs and solar, Tesla, Ford, and GM EV sales, Electrek Formula Sun, and more
Today’s episode is brought to you by Bosch Mobility Aftermarket—A global leader and trusted provider of automotive aftermarket parts. To celebrate Amazon Prime Day July 8th through 11th, Bosch Mobility is offering exclusive savings on must-have auto parts and tools. Learn more here.
The show is live every Friday at 4 p.m. ET on Electrek’s YouTube channel.
As a reminder, we’ll have an accompanying post, like this one, on the site with an embedded link to the live stream. Head to the YouTube channel to get your questions and comments in.
After the show ends at around 5 p.m. ET, the video will be archived on YouTube and the audio on all your favorite podcast apps:
We now have a Patreon if you want to help us avoid more ads and invest more in our content. We have some awesome gifts for our Patreons and more coming.
Here are a few of the articles that we will discuss during the podcast:
- Electrek FSGP 2025: New teams, new cars, same solar spirit
- Congress votes to send 2 million US jobs to China, increase deficit, energy costs
- Tesla (TSLA) confirms 384,000 deliveries in Q2 2025, right on expectations
- Tesla prototype sparks speculation: a Model Y, maybe slightly smaller
- Tesla launches Oasis Supercharger with solar farm and off-grid batteries
- Tesla unveils its LFP battery factory, claims it’s almost ready
- Here’s why Ford’s electric vehicle sales crashed by nearly a third in Q2
- The Chevy Equinox EV is GM’s breakout star, but that’s not the only surprise
- Xpeng launches G7, a new Tesla Model Y competitor for just $27,000
Here’s the live stream for today’s episode starting at 4:00 p.m. ET (or the video after 5 p.m. ET:
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