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Riot Platforms reports that Texas energy approach lowered production expenses by $31 million.
In August, Bitcoin miner Riot Platforms extracted fewer Bitcoins compared to July, yet it secured over $31 million in power credits. This amount is roughly equivalent to about 1,136 Bitcoin (BTC), as noted by CEO Jason Les in a statement.
Riot obtained approximately $24.2 million in power curtailment credits through its agreement with the Texas grid operator Electric Reliability Council of Texas (ERCOT), along with $7.4 million from ERCOT’s demand response initiative. Les mentioned that these monthly credits surpass the total credits the company received throughout 2022.
Riot Platforms mining statistics for August. Source: Riot Platforms
As per a presentation issued by Riot on September 6, the company’s power strategy relies on three mechanisms, all contingent on its long-term contract with ERCOT. Power credits are granted when the company reduces operations and returns power to ERCOT during periods when electricity prices render mining unprofitable.
Related: Marathon Digital attributes a 21% decrease in Bitcoin mining in June to weather conditions
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Demand response credits are earned when Riot “competitively bids to offer ERCOT the option to manage Riot’s electrical load,” regardless of whether the electric company opts to call on Riot to decrease consumption. Les stated:
“The impact of these credits significantly reduces Riot’s expenses for mining Bitcoin and is a crucial factor in positioning Riot as one of the lowest-cost Bitcoin producers in the industry. Riot’s power strategy serves as a vital competitive edge.”
August brought particularly severe weather to Texas, with temperatures reaching or exceeding record-high levels for extended periods. Riot’s presentation highlighted, “Bitcoin Mining is among the few sectors capable of reducing energy usage and aiding the grid during times of demand stress.”
#Bitcoin miners are experiencing a remarkable 2023: with mining costs below the current Bitcoin price and increasing production, margins are widening, revenues are surging, and profitability is on the rise. @RiotPlatforms @MarathonDH @Hut8Mining @HIVEDigitalTech @BitDigital_BTBT… pic.twitter.com/kqN022CmTz
— Juan Leon (@singularity7x) August 30, 2023
Riot Platforms reported a loss of $27.7 million in the second quarter of this year, which marks a significant improvement compared to the previous year — the company faced a loss of $353.6 million in Q2 2022, during the peak of the crypto winter. The company intends to deploy thousands of new miners ahead of the Bitcoin halving.
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