Loosely tethered to our previous update – While Texas Declared a Grid Emergency, EU Fossil Generation is at Record Low – two more climate crisis related developments are worth tracking as an indicator of what may be the new reality in this age of polycrisis. We do not provide solutions but do mention mental frameworks important for leaders to master in finding solutions.
Texas paid bitcoin miner Riot $31.7 million to shut down during heat wave in August
“…Riot has been powering down operations at its Rockdale mine, about an hour from Austin, to help ease the burden on the state’s grid.”
As reported by CNBC:
- Bitcoin miner Riot Platforms raked in $31.7 million in energy credits from Texas power grid operator ERCOT in August.
- During a record-breaking heat wave in the state, Riot voluntarily curtailed its energy consumption to take advantage of credits available by limiting use.
- Riot is benefiting from an alternative source of income at a time when losses are mounting.
“During the crypto boom of 2021, Riot Platforms was raking in cash from bitcoin mining. Now the company is losing so much money that it’s counting on energy credits from selling power back to the Texas grid to keep its costs under control. Riot said on Wednesday that it earned $31.7 million in energy credits last month from Texas power grid operator ERCOT. The company generated the credits by voluntarily curtailing its energy consumption during a record-breaking heatwave.
Paying miners to power down
The Electric Reliability Council of Texas, or ERCOT, has a relatively simple and mutually beneficial relationship with bitcoin miners. The agency, through established “demand response” programs, pays miners to reduce their power so as not to overstress the grid when air conditioners need to run at full blast. In addition to summer difficulties, ERCOT also failed during the fatal winter storm of early 2021. Riot’s latest credits consist of $24.2 million from energy sold back to the ERCOT grid and $7.4 million in demand response credits. For years, Riot has been powering down operations at its Rockdale mine, about an hour from Austin, to help ease the burden on the state’s grid.
ERCOT has historically struggled with fluctuating energy prices and sporadic service, so it strikes deals with flexible energy buyers like crypto miners. The agency also counts on bitcoin miners to soak up excess power when there’s too much supply, keeping prices in check. Texas has made itself an ally to the bitcoin mining industry through credits, but the financial incentives hit a snag in early 2023. A bill to cut off the mining industry from those credits – SB 1751 – passed the Texas State Senate in April, but ultimately stalled out in a House committee. Instead, state lawmakers passed two mining-friendly bills expanding incentives and cutting red tape for the industry. Those went into effect on Sept. 1.”
German farmers hit by climate change impacts, new data shows
“Farmers and campaigners are warning of the impacts climate change has on agricultural production in Germany amid mixed results for this year’s harvest due to adverse weather events.”
As reported by EURACTIV (part of The Trust Project):
A sequence of different weather extremes over the past months has left its mark on Germany’s agricultural production and led to significant variations between regions and production sectors, according to harvest data.
“Extreme weather as a consequence of the climate crisis is increasingly turning our harvests into a lottery game,” Agriculture Minister Cem Özdemir said during the presentation of the official government harvest report on…28 August. The report points to several seasons of unpredictable weather, including an unusually mild winter in 2022, a spring in 2023 that started rainy and ended dry, and an arid summer that turned unusually rainy just in time to hamper the harvest of key crops.
Harvest hampered by rain
“The argument that this year’s harvest offers a first glimpse into German farmers’ future in the face of climate change was shared by farmers and green campaigners alike.”
While the report speaks of a “satisfactory” rapeseed harvest, it finds that the overall grain harvest remains around 4% below the multi-year average, with particularly low values seen in central and northeastern regions. For winter wheat, the most important grain crop, yields remained around 3% below the multi-year average.
Özdemir called to draw lessons from this year’s mixed harvest data. “Anyone who believes that we can delay working on climate protection and climate adaptation does not represent the interests of German agriculture,” the Green minister stressed. German farmers’ association President Joachim Rukwied spoke of the “clearly noticeable effects of climate change” during the association’s harvest projection presentation last week. Likewise, the President of environmental NGO NABU, Jörg-Andreas Krüger, said this year shows “how the climate and nature crisis pose challenges to food production already today.”
Most recently, the crop monitoring report for August from the EU’s Joint Research Centre found that “abundant” and “frequent” rain caused delays in the harvesting and adverse effects on the quality of winter crops in Germany and the Benelux countries and north-western France. Meanwhile, “heatwaves and drier-than-usual conditions particularly impacted summer crops in Bulgaria, southern and eastern Romania, Czechia and central Poland,” according to the report. Non-EU states are suffering as well with the Minister of Agriculture of Albania, Frida Krifca, recently telling EURACTIV in an interview that climate change is the biggest issue facing Albanian farmers. She pointed to sporadic and heavy rains, prolonged winters and springs. and higher temperatures as critical challenges for present and future policies to help farmers.
What Next?
As our readership knows, we concern ourselves with decisionmaking and risk awareness (and how foresight strategy and the OODA Loop itself inform decisionmaking and mitigate risk). There are a variety of societal and economic reasons for why we find ourselves in this climate crisis – and cognitive biases have most definitely figured prominently over the last few decades. We encourage our readership to return to what has now become a seminal OODAcast with Expert Practitioner of Analysis Carmen Medina on Mental Models and Cognitive Bias – which is the source of this “deep dive” on the implications of cognitive biases for your business or organization: The Worst-Case Scenario is the Least Probable” and Other Cognitive Biases: Global Drought, Catastrophic Monsoons and Floods and “Zombie Ice”.
We also encourage you to revisit the OODA Almanac 2023: Jagged Transitions – which prices in this polycrisis environment in which we are currently operating and is “meant to invoke the challenges inherent in the adoption of disruptive technologies while still entrenched in low-entropy old systems and in the face of systemic global community threats and the risks of personal displacement.” The Almanac raises questions you and your team should be asking…sooner rather than later.
For our most recreport of recent developments in the climate crisis and further discussion of mental models and cognitive biases, go to : Responding to the Climate Crisis: The Worst Case Scenario is Not the Least Probable.
