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
This fall marks the 25th anniversary of the US launch of the first-gen Toyota Prius — a car that, arguably, has done more to more to shift the market away from fossil fuels than any other single vehicle (more on that in a minute). That means that, in many states, you can now get “antique” or “historic” plates for a modern hybrid.
If that sounds appealing to you, here’s what it might cost to keep that OG Prius on the road for many more years to come.
“When the Prius burst into the US market, it was nothing short of a revolution,” reads the breathless Toyota PR copy. “A true trailblazer in the world of hybrid vehicles, (Prius) set the stage for the electrification movement, captivating environmentally conscious drivers with its innovative spirit.”
I think that’s true. And, as for that claim in the header that the Prius did more to shift the US auto market away from fossil fuels than any other single vehicle, ask yourself this: would there even be a Tesla Roadster (much less an “affordable” Model Y) without the Toyota Prius bringing the conversation about electric cars into the mainstream zeitgeist fully eight years earlier?
I spent enough time behind the wheel of a seriously quick and capable US Electricar Consulier to tell you this much: no, there wouldn’t.
They’re still out there
The inspiration for this article was, predictably enough, a first-generation Prius sighting in my own neighborhood. One of more than 52,000 first-generation Priuses (Prii?) sold in the US, this one was green, with a straight body, glossy paint, and the woman driving it turned out to be the car’s original owner. Her Prius – Toyota’s first gas-electric hybrid – continued to give her great service from its 1.5-liter four-cylinder ICE and high-torque electric motor, and the car’s nickel-metal hydride battery pack seemed serviceable enough, though she couldn’t tell me if it was original (her husband took care of all that).
That, along with the possibility of trolling boomers with an antique-plated Prius, led me to ask myself, “What would it really take to keep one of these on the road?”
Even if your Prius spent its entire life in a garage and has only 60,000 miles on the clock, 25 years is still twenty-five years, and rubber doesn’t care about mileage. That’s not just the rubber in the tires, either. The factory struts, bushings, CV joints, belts – even the engine mounts will surely need to be replaced. Ditto for the door and window seals.
Along with a 12V battery, fresh oil and filter change, and a thorough cleaning, that’s the kind of stuff you should budget for on day one. Here’s a quick estimate on what that would run (parts only, of course, because you work on antiques yourself):
- tires – Michelin Energy Saver A/S or Bridgestone Ecopia EP422 Plus in 195/65R15, plan on spending about $150/tire
- shocks and struts – KYB Excel-G, commonly sold in pairs, expect to pay about $200/ea.
- control arm bushings and sway bar links – MOOG control arm bushings and sway bar end links, $25-50/link
- engine and transmission mounts – Dorman or Westar makes replacements at roughly $60–120 each, depending on which mount(s) you need
- CV boots / axle rebuild kits – GSP or SKF kits typically sell $25–75/boot
- Serpentine / accessory belt – Gates makes an OE-quality replacement belt for about $40
This is the big one
You’ll notice, by now, that I’ve avoiding one particular bill. The one repair item that makes anyone looking at an older EV or hybrid think twice – the high-voltage battery. And, if you’ve done any kind of research into the cost of replacement batteries for older electric cars, you already know why that is. I haven’t mentioned it, because it’s not that bad.
I found a new high-voltage replacement battery for a Prius from GreenTec on sale for just $2,050 with a 36-month warranty, or $1,399 for a refurbished unit with a 12-month warranty. That’s not only significantly less than the price of a refurbished transmission for a Toyota Corolla of a similar vintage – it’s probably a lot less than people who still think EVs are new technology would have guessed, too.
Battery costs are going down
The costs of replacing a high-voltage EV battery in older model year cars continues to go down – and that’s true for newer EVs, too. “We’ve seen about $12-18K as an average replacement cost for a Tesla battery,” says KJ Gimbel, founder and CEO of extended EV warranty firm, Xcelerate Auto. “(At that number) we’re confident that we’ll be able to support the vast majority of claims that arise, regardless of the model.”
In other words, if you’re the type of gear head who expresses a midlife crisis by buying a sensible, reliable daily driver, you could do a lot worse than a historic Prius.
That’s my take, anyway – what’s yours? Let us know what you think of the Prius’ 25th American birthday, its role in the EV revolution, and whether or not it’ll ever gain true classic status in the comments section at the bottom of the page.
Original content from Electrek.
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Orange EV may not be a household name like Mack or Kenworth, but this small-ish maker of all-electric heavy duty terminal tractors is making a name for itself where it matters: on the job. And this week, the company’s deployed fleet logged its ten millionth hour of operation!
Despite claims from oil-backed “efficiency” groups and fossil-backed hydrogen propaganda to the contrary, battery-powered heavy-duty EVs are proving themselves more than capable of getting the job done today, with millions upon millions upon millions of over-the-road miles as proof. Now, Orange EV is throwing its own data into the mix, with a deployed fleet of HDEVs that’s logged ten million hours of operation across more than 27 million low-speed, extreme duty miles.
“Ten million hours makes one thing clear: Orange EV has taken electric terminal trucks from possible to proven,” said Kurt Neutgens, President and CTO of Orange EV. “Our 340 customers are operating at an average of 97% uptime, with no compromises, proving you can cut costs, boost performance, and improve health and safety all at once.”
What might be more impressive than the miles covered, though, is how few trucks Orange has deployed to get to that number. The company reports that multiple units have already surpassed 30,000 hours of active service while others still are approaching a full decade of daily use — and all of them are still running on their original Orange-designed LFP battery packs.
“Diesel yard trucks rarely achieve this level of durability, but Orange EV delivers with every truck,” adds Neutgens, a former Ford engineer. “Every hour of safe, reliable operation raises the bar for what fleets should expect from their equipment.”
Since delivering its first customer truck back in 2015, Orange EV has deployed more than 1,600 trucks across 40 states and four Canadian provinces. Together, these trucks have eliminated approximately 200,000 tons of carbon dioxide and saved fleets over $100 million (US) in fuel and maintenance costs alone. And, in more than 10 million hours of duty, not a single Orange EV yard truck battery has experienced a thermal event.
Electrek’s Take
Over at The Heavy Equipment Podcast, we had a chance to talk to Orange EV founder Kurt Neutgens ahead of last year’s ACT Expo for clean trucking. On the show (available here), Kurt explained how his experience at Ford helped inform his design ideology, and that the Orange EV was designed to be cost competitive with diesel options, even without subsidies.
Give it a listen, then let us know whether you think the big yard dogs’ success will help debunk the “messy middle” myths or not, in the comments.
SOURCE | IMAGES: Orange EV.
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EUNICE, NEW MEXICO — Paul Lorskulsint was a shift manager at a brand new uranium enrichment facility deep in the American Southwest when catastrophe struck Japan in 2011.
A massive tsunami and earthquake had caused a severe accident at the Fukushima Daiichi Nuclear Power Plant. Thousands of miles away in Eunice, New Mexico, Lorskulsint turned on the television to make sure his team could witness what was happening across the Pacific Ocean.
Lorskulsint knew the disaster in Japan was a watershed moment for the nuclear industry. The plant where he was leading an operations shift had just opened in 2010, after the European uranium enricher Urenco had spent years building the facility in anticipation of growing demand.
Over the ensuing decade, public support for nuclear power diminshed and a dozen reactors closed in the U.S. as the industry struggled to compete against a flood of cheap natural gas and renewable energy. Demand for the low enriched uranium that fuels nuclear plants dwindled.
“The price of what we sold basically went through the floor,” Lorskulsint, who is now the chief nuclear officer at Urenco USA, told CNBC. Urenco’s long-term contracts with utilities insulated the facility during the downturn, he said, but the price drop put further expansion plans on hold.
Paul Lorskulsint, Chief Nuclear Officer, Urenco USA talks about the uranium enrichment process.
Adam Jeffery | CNBC
Headquartered outside London, Urenco is joinly owned by the British and Dutch goverments and two German utilities. Its New Mexico facility is the only commercial enrichment facility left in the U.S. The last U.S.-owned commercial facility in Paducah, Kentucky, closed in 2013 and its owner the United States Enrichment Corporation went bankrupt during the downturn after Fukushima.
Fourteen years later, the situation has reversed once again. Urenco USA is racing to expand its enrichment capacity. The nuclear industry is gaining momentum as electricity demand in the U.S. is projected to surge from artificial intelligence and the push to expand domestic manufacturing. Doubts persist about whether U.S. power supplies will ramp up quick enough to meet the needs. Increasing uranium enrichment will be a key part of the process, despite the history of past disappointments.
Also, U.S. enriched uranium supplies are at risk. The U.S. still imported 20% of its enriched uranium from Russia in 2024, a legacy of the now shattered hope for friendship between the two countries after the collapse of the Soviet Union and end of the Cold War.
The U.S. will completely ban the import Russian uranium by 2028 in repsonse to Moscow’s full-scale invasion of Ukraine, leaving a gapping supply deficit just when Washington, the utilities and the tech sector are developing the most ambitious plans in decades to build new reactors.
Nuclear plants like Palisades in Michigan, Crane Clean Energy Center in Pennsylvania and Duane Arnold in Iowa are planning to restart operations this decade after closing years ago. The tech sector is investing hundreds of millions of dollars to bring advanced reactors online in the 2030s to help power their computer warehouses that train and run AI applications.
“It is a pivotal moment, the next five to 10 years for the nuclear industry,” Lorskulsint said. “We’re going to have to have to deliver on time, on schedule and continue to maintain that momentum, which is a significant challenge.”
Employees at Urenco USA receive a cylinder of feed material for enrichment process.
Adam Jeffery | CNBC
Expansion plans
In deeply divided Washington, support for nuclear power is one of the few issues that can still muster some bipartisan support. President Donald Trump wants to quadruple nuclear power by 2050, a significant increase over President Joe Biden’s previous goal to triple it by that date.
The U.S. has only built one new nuclear plant from scratch in the past 30 years, raising doubts about whether such ambitious plans can be realized. But any effort big or small to expand nuclear power in the U.S. will run through Urenco’s facility in New Mexico.
The plant currently has capacity to supply about a third of U.S. demand with $5 billion invested in the facility to date. Urenco is expanding its capacity in New Mexico by 15% through 2027 as utilties replace Russian fuel. It has installed two new centrifuge cascades for enrichment this year. But Urenco’s expansion alone won’t fill the Russian supply gap, Lorskulsint said.
“Our competitors will have to expand in order to make sure that as a whole the industry is still supplied,” he said. “We’re building quickly as we can to make sure that the the industry is not short handed.”
As Russian fuel is banned from the U.S., the Trump administration is pushing for 10 new large reactors to start construction this decade. Alphabet is investing in about 2 gigawatts of new nuclear, Amazon has committed to more than 5 gigawatts, and Meta wants to bring up to 4 gigawatts online.
Urenco USA Facilities in Eunice, New Mexico.
Adam Jeffery | CNBC
The industry is worried about the supply gap, Lorskulsint said, but filling it “is not an insurmountable task.”
Urenco USA is a candidate to receive a contract from the Department of Energy to produce more low-enriched uranium, part of U.S. efforts to standup a domestic nuclear supply chain. The contract would allow the New Mexico facility to expand further with the construction of a fourth production building.
Urenco’s competitors are also seeking support from the Energy Department to build out U.S. enrichment capacity. France’s Orano is planning to build a facility in Oak Ridge, Tennesse, with operations potentially starting in the 2030s.
Publicly traded Centrus has a facility in Piketon, Ohio, where it plans to produce low-enriched uranium, but it hasn’t yet started commercial operations. Centrus is the successor company to the United States Enrichment Corporation that went bankrupt in 2013.
Centrus stock has gained more than 400% this year as investors bet on a growing demand for enriched uranium due to U.S. plans to expand nuclear power.
Paul Lorskulsint, Chief Nuclear Officer, Urenco USA talks about the uranium enrichment process next to centrifuge cascade.
Adam Jeffery | CNBC
Supply chain bottlenecks
But enrichment is just one stage in a long supply chain that will be stretched by growing demand. Uranium delivered to the U.S is often mined in Canada and it is then converted into intermediate state called uranium hexafluoride that is the feedstock for enrichment.
The feedstock is spun in Urenco’s centrifuges to increase the presence of the isotope Uranium-235 to 5%, the level needed for most nuclear plants. The enriched uranium is then shipped to fuel fabricators that manufacture the pellets that go into reactors in power plants.
U.S. nuclear plants are facing cumulative supply gap of 184 million pounds of uranium through 2034, according to the Energy Information Administration.The biggest bottleneck right now for Urenco is the conversion of uranium into the feedstock for enrichment, Lorskulsint said. There are only three facilities in the Western world located in Canada, France and Illinois that convert uranium into feedstock.
“Every portion of the supply chain is going to have to expand, it’s not just about enrichment,” Lorskulsint said. “We need more of everything but conversion right now is the bottleneck.”
The nuclear supply chain may not be the biggest challenge in the end, the executive said. The ageing U.S. electric grid could prove to be the real constraint on building new nuclear due how long it takes to complete upgrades, he said. While this could slow Urenco down, it won’t stop the expansion, he said.
“We came here when the market demanded it,” Lorskulsint said of Urenco’s investment in the U.S. “We were here when the market didn’t demand it. And we are now expanding to make sure that we can still support as much as the market needs from us.”
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