Fitch Ratings: “Energy companies need to prepare for risks, caused by mining" – Bits Media

The American agency Fitch Ratings released a report, according to which mining companies may pose risks to the stability of energy supply in the United States.

The cryptocurrency industry is highly volatile and unstable, therefore, mining companies can change dramatically volumes of energy consumed, Rating agency analysts warn in their article. US suppliers need to prepare for a significant increase in electricity demand, and to a possible rapid drop in consumption volumes:

“Cryptocurrency mining is highly dependent on the price of the asset and can scale extremely quickly. Companies are capable of carrying out large-scale equipment shutdowns, if mining becomes unprofitable, and quickly connect new devices", - analysts write.

Energy suppliers among Fitch Ratings clients have successfully managed risks so far, which are mining companies. Suppliers either limit the number of miners, to which electricity is supplied, or enter into contracts, protecting the supplier from sudden changes in consumption volumes.

Fitch Ratings analysts remind, that an abundance of inexpensive electricity often attracts miners. In the United States, the state of Washington has become the most attractive for them, where the number of metallurgical enterprises has noticeably decreased, and the volume of generated electricity, against, grew - thanks to the commissioning of several wind power plants.

At the same time, mining companies, It is said in the article, create quite a few jobs and generally have a weak impact on the regional economy. And this despite the fact, that mining farms in some places become the largest consumer of electricity.

Fitch Ratings cited another example - the state of Texas., where there is no excess electricity generation, but economic conditions attract miners. To meet energy demand, suppliers need to build new power plants. This is a long-term and large-scale investment, which are too risky for the electricity supplier. Since the owners of mining farms can easily turn them off and move them to another location.

Recall, that it was Bitcoin mining that made it possible to save the oldest hydroelectric power station in the United States in Mechanicville.