(Bloomberg) — Bitcoin miners in the US are consuming the same amount of electricity as the entire state of Utah, among others, according to a new analysis by the US Energy Information Administration. And that’s considered the low end of the range of use.
Most Read from Bloomberg
Electricity usage from mining operations represents 0.6% to 2.3% of all the country’s demand in 2023, according to the report released Thursday. It is the first time EIA has shared an estimate. The mining activity has generated mounting concerns from policymakers and electric grid planners about straining the grid during periods of peak demand, energy costs and energy-related carbon dioxide emissions.
“This estimate of U.S. electricity demand supporting cryptocurrency mining would equal annual demand ranging from more than three million to more than six million homes,” the report said.
While mining began in the US a decade ago, an influx of crypto mining companies have relocated from China after that country banned the industry in May 2021. Over the last three years, a flurry of large-scale miners have gone public in the US, setting up operations in some of the most energy-rich states such as Texas and New York.
To date, EIA has identified a total of 137 facilities located in 21 states, with most in Texas, Georgia and New York. The agency used data from the Cambridge Bitcoin Electricity Consumption Index as well as the data it collected from the facilities for its calculations.
“CBECI estimates put electricity supporting Bitcoin mining in 2023 at about 0.2% to 0.9% of global demand for electricity,” according to the report. “Based on those estimates, global electricity use in cryptocurrency mining was about the same as total electricity consumption in Greece or Australia, respectively.”
Bitcoin mining is an energy-intensive process in which miners use specialized computers to validate transactions on the blockchain and receive rewards in the form of the token.
While it has been difficult to collect data, EIA said it plans to begin conducting a mandatory survey “focused on systematically evaluating the electricity consumption associated with cryptocurrency mining activity,” the report said. Data will be collected on a monthly basis from February through July.
–With assistance from Naureen S. Malik.
Most Read from Bloomberg Businessweek
©2024 Bloomberg L.P.