Riot earns $31.7 million in energy credits during Texas heat wave

Riot Platforms earned $31.7 million in energy credits in August after the company curtailed its electricity use during a record-breaking heat wave in Texas. The Electric Reliability Council of Texas, or ERCOT, issued these credits to incentivize companies to reduce activities that might strain the state energy system. This credit amount exceeded the $8.9 million value of the 333 bitcoin the company mined during that same month. I find the company’s ability to generate revenue through grid stabilization more impressive than its actual mining output during this period.

The $31.7 million in total credits included $24.2 million from energy sold back to the ERCOT grid and $7.4 million in demand response credits. These credits significantly lower the cost for Riot to mine bitcoin. The company’s August strategy remains a sharp contrast to its 2022 performance, when it reported a net loss of over $500 million. While Bitcoin prices recovered this year, the market cap of 14 U.S.-listed bitcoin miners tracked by JPMorgan Chase fell 21% in August to $9.7 billion. Riot was the worst-performing stock on that list, falling 39% for the month.

Operational shifts at the Corsicana facility

Riot is pursuing a strategy to use its 1.0 GW of power at the Corsicana facility for various data center designs. The company recently filed a permit with the Texas Department of Licensing and Regulation to develop a new two-story data center building called Project Ditto. This $400 million project covers 335,430 square feet and has a construction window from April 2026 to May 2028. Riot already owns 858 acres in Corsicana after closing on 238 additional acres in July.

The company halted its 600 MW Phase II Bitcoin mining expansion in January 2025 to evaluate artificial intelligence and high-performance computing workloads. This pivot aims to use the remaining capacity for AI and HPC use cases. The site currently uses 400 MW of power for Bitcoin mining. I think the pivot to AI workloads makes sense given the massive energy requirements of such tasks. However, the company’s environmental impact remains a point of contention for critics. Greenpeace claims that Riot operates one of the most energy and carbon-intensive Bitcoin mines in the US.

High energy demand and grid stability

Texas faces growing demand from consumers and businesses as extreme weather events occur more frequently. In 2021, residents faced blackouts during a winter storm that knocked out coal, gas, and wind facilities. ERCOT asks residents and business owners to conserve energy during periods of high demand, such as the afternoon and evening hours when solar power generation declines. Riot participates in ERCOT’s demand response programs, which pay companies to reduce power so they do not overstress the grid.

The economic calculation for these credits depends on whether the grid operator pays more than the miner would have made from mining during that hour. If the payment exceeds the mining profit, the company gladly powers down. Residents of Navarro County have expressed opposition to the facilities through petitions. They argue that these operations place a burden on fragile infrastructure. While Riot uses immersion cooling to reduce the need for fans, the facility still generates significant noise. Will the increase in total power demand from such facilities eventually offset the benefits of these demand response programs?