3 - 5 minute read
A new energy and bitcoin mining hosting site is being developed in Corpus Christi, Texas, by Saxet Infrastructure Group. The site will offer customers the unique option to create their own power management strategy and decide if and how they participate in demand response programs. Connected to the grid and co-located with a 300 MW battery storage facility, the site aims to pass variable energy costs onto its customers and charge a lower fixed management fee than many competitors.
Electricity is often the largest operating expense for miners, and many hosting contracts signed during the 2021 bull market had a fixed price that became unsustainable during the energy crisis of 2022. Saxet’s approach is a response to the common hosting conflict where one party usually ends up losing either by signing up for a fixed price that is too high or too low, putting the infrastructure partner hosting partner at risk. The new site is expected to be up and running by the end of the year, offering a new way for large-scale miners to manage their energy costs.
The site’s location in Corpus Christi has several advantages. The area has a relatively moderate temperature near the sea, making it cooler than other parts of Texas, including West Texas where many miners have flocked. The site is also situated at a lower altitude, making for denser air. The lower temperatures and more humid environment help reduce the costs of cooling machines. Additionally, the area is home to almost 7 gigawatts of wind power generation, with winds not dying down in the afternoon as it does in West Texas. Demand for electricity in the area is fairly stable because it is home to industrial facilities that require stable amounts of power throughout the day and few population centers.
Saxet Infrastructure Group’s CEO Steve Quisenberry and Chief Operating Officer Matt Held were also partners at Bootstrap Energy, a company that Compute North had hired to develop the Corpus Christi site in March 2022. Bootstrap Energy also owns the land that the site is on. Ro Shirole, who left retail-facing hosting firm Compass Mining to join Saxet as its chief commercial officer, previously worked at Compute North.
Compute North filed for Chapter 11 bankruptcy in September 2022 due to the declining bitcoin price and the company’s relationship with its biggest lender, Generate Capital, which ended up taking over Compute North’s stake in another two of its sites. Compute North’s services agreements didn’t allow it to pass through energy costs, and the company could only turn off its customers’ machines when energy prices exceeded a certain level. Saxet’s approach is different, offering customers transparency of energy pricing and the ability to create their own power management strategy.
The Bottom Line
The new energy and bitcoin mining hosting site being developed by Saxet Infrastructure Group in Corpus Christi, Texas, offers customers a unique option to create their own power management strategy and decide if and how they participate in demand response programs. The site’s location in Corpus Christi provides several advantages, including a relatively moderate temperature, wind power generation, and stable electricity demand. The new site is expected to be up and running by the end of the year, offering a new way for large-scale miners to manage their energy costs. Traders should keep an eye on the development of this site and the potential impact it could have on the energy and bitcoin mining industry.