States with the most affordable electrical energy costs
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2021 was a great year for Bitcoin mining in America as new talent – and equipment – flooded the market, but some states are definitely more attractive destinations than others.
The latest data from the Global Energy Institute shows that states like Texas and Washington have the lowest average electricity price, which certainly coincides with the fact that both states are increasingly hotter targets for new digital coins minting.
While the cost of electricity isn’t everything when it comes to building a store, it is a long way to go.
Large-scale miners compete in a low margin industry where their only variable cost is usually energy, so they have an incentive to migrate to the cheapest energy sources in the world.
Electricity prices in the US vary.
In California and Connecticut, you’ll pay between 18 and 19 cents per kilowatt-hour, while in Texas, Wyoming, Washington, and Kentucky, you’re reported to pay less than half the Global Energy Institute, which compiles an annual electricity price map of the country using last year data from the US Energy Information Administration.
However, the Institute warns that “while the energy mix available in a state will play a large role in state electricity prices, energy cap policies in some states serve to artificially raise prices, making the price of electricity much higher for consumers and” companies . “
Ultimately, Bitcoin miners are most concerned with finding cheap sources of electricity.
This is one of the reasons the U.S. is particularly attractive to budding miners as the country is home to some of the cheapest sources of energy in the world, many of which are typically renewable.
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Fred Thiel, CEO of cryptocurrency mining specialist Marathon Digital Holdings, expects most new miners moving to North America to run on renewable energy or gas that is offset by renewable energy credits.
“Mining is price sensitive to find the cheapest electricity, and the lowest cost electricity is usually renewable because if you burn fossil fuels … Back said.
Washington state is a mecca for water-powered mining operations, while Texas’s share of renewable energy is growing over time, with 20% of its electricity coming from wind as of 2019.
However, electricity costs are not everything. Friendly politics and adequate infrastructure are also important factors.
It has a deregulated power grid that gives customers a choice of electricity providers, and most importantly, its political leaders are pro-crypto – dream conditions for a miner looking for a friendly welcome and cheap sources of energy.
“You are going to see a dramatic shift in the next few months,” said Bitcoin mining engineer Brandon Arvanaghi. “We have governors like Greg Abbott in Texas promoting mining. It’s going to be a real industry in the United States, which is going to be incredible.”
The US also spent years investing in the crypto mining infrastructure long before it became popular.
When bitcoin crashed in late 2017 and the broader market entered a multi-year cryptocurrency winter, there wasn’t much demand for large bitcoin farms. US mining operators saw their opening and took the chance to use cheap money to build the mining ecosystem in the states.
“The big public miners were able to raise capital to make big purchases,” said Mike Colyer, CEO of Foundry digital currency company, which helped bring over $ 300 million worth of mining equipment to North America.
According to Colyer, companies like North American crypto mining operator Core Scientific kept building hosting areas in the depths of the period so they had the opportunity to plug in new equipment. With offices in North Dakota, North Carolina, Georgia and Kentucky, Core is one of the largest providers of blockchain infrastructure and hosting in North America.