ERCOT paid Bitcoin miner Riot $31.7M to limit energy consumption during heat wave in August

Riot Platforms 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, a report published Wednesday said.

According to CNBC, Riot said on Wednesday that it earned $31.7 million in energy credits last month from Texas power grid operator ERCOT.

Riot Platforms said it is losing so much money that it’s depending on energy credits from selling power back to the Texas grid to keep its costs under control, the report said. The company said it generated the credits by voluntarily limiting its energy consumption during a record-breaking heatwave. The total value of the credits dwarfed the 333 bitcoin the company mined in August, which was worth about $8.9 million as of the end of the month, CNBC said.

“August was a landmark month for Riot in showcasing the benefits of our unique power strategy,” said Jason Les, the CEO of Riot. “Riot achieved a new monthly record for Power and Demand Response Credits, totaling $31.7 million in August, which surpassed the total amount of all credits received in 2022. Based on the average Bitcoin price in August, power and demand Response credits received equated to approximately 1,136 bitcoin. 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. Riot’s power strategy is a key competitive advantage, and when placed alongside our strong financial position and efficient miner fleet, put Riot in a leading position heading into the upcoming Bitcoin ‘halving’ event next year.”

According to reports, Riot had a net loss of over $500 million in 2022. In the latest quarter, the company reportedly lost $27.7 million.

The Electric Reliability Council of Texas (ERCOT) has a mutually beneficial relationship with bitcoin miners, CNBC said. ERCOT reportedly pays miners to reduce power so that the grid won’t be overextended. The agency also depends on bitcoin miners to use up excess power when there’s too much in supply. This helps keep prices in check, CNBC reported.

Riot’s latest credits allegedly consist of $24.2 million from energy sold back to the ERCOT grid and $7.4 million in demand response credits.

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