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Thursday, Aug 21, 2025
Mugglehead Investment Magazine
Alternative investment news based in Vancouver, B.C.
Texas grid strain forces ERCOT to consider industrial power shutoffs
Texas grid strain forces ERCOT to consider industrial power shutoffs
An electrical power station. Image via Adobe Stock.

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Texas grid strain forces ERCOT to consider industrial power shutoffs

Texas’s “new normal” demands smarter, faster, and more adaptive grid operations

Texas is preparing to cut power to data centers during grid emergencies, demonstrating just how strained the system has become.

Over the Fourth of July, deadly floods swept across central Texas, disrupting infrastructure and causing widespread outages. Meanwhile, the Electric Reliability Council of Texas (ERCOT) has already experienced multiple price spikes and conservation alerts because it couldn’t deliver it where it was needed.

These problems are not unique to Texas. Days after the shutoff plan was announced, the U.S. Department of Energy warned that blackout risks nationwide could rise 100-fold by 2030. This warning underscores a deeper vulnerability: the U.S. grid still operates on tools and assumptions built for a different era, one with fewer storms, slower load growth, and no massive data centers.

Texas’s “new normal” demands smarter, faster, and more adaptive grid operations. Long-term infrastructure investments are critical, yet they will not arrive in time to manage the next three summers.

Texas has made meaningful progress in adding generation capacity, particularly through solar, wind, and storage. However, the transmission lines that carry that power have not evolved. More importantly, grid operations have not adapted to either changing weather patterns or rising electricity demand.

Industrial expansion, electrification, and AI data centers are further doubling the strain. ERCOT projects that Texas’s power demand could nearly double by 2030. Other regions face similar pressures. The Midcontinent Independent System Operator recently approved a $22-billion transmission buildout to address growing congestion.

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Multiple companies could be effected by ERCOT’s decision

Crypto and high-performance computing companies will face real consequences from ERCOT’s recent decision to curtail power.

Riot Platforms Inc (NASDAQ: RIOT), Marathon Digital Holdings (NASDAQ: MARA), Hut 8 Corp (NASDAQ: HUT) (TSE: HUT), and Argo Blockchain (LON: ARB) all operate large Texas data centers and could see operations limited during grid emergencies.

Meanwhile, these firms already strain the system with continuous, high-intensity workloads. In addition, curtailments could reduce Bitcoin mining output, slow AI model training, and disrupt high-performance computing tasks.

Furthermore, intermittent reductions in power may force companies to shift workloads or temporarily pause operations. Although demand-side management programs exist, they may not fully offset the impact of rolling outages on these large-scale users.

Also, the growing footprint of AI data centers, cloud providers, and crypto mining facilities means these curtailments could affect multiple regions simultaneously. Consequently, ERCOT’s move highlights how industrial-scale energy consumers must contend with an increasingly strained grid, while operators balance weather, load growth, and renewable integration.

All four companies, however, are no strangers to ERCOT’s energy requirements.

Hut 8 is building a 100 MW facility in Texas, designed to give the company more operational flexibility while mitigating the impact of potential grid curtailments.

Meanwhile, Riot Platforms has historically leveraged ERCOT’s economic curtailment programs, earning millions by temporarily reducing mining activity when electricity prices spiked. Marathon Digital Holdings employs similar tactics, participating in the Four Coincident Peak program to reduce peak demand charges while maintaining production efficiency. Both companies use curtailment as a strategic tool rather than simply reacting to emergencies.

Argo Blockchain also adapts to periodic curtailments, generating power credits to offset revenue losses.

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