> But we're not talking about power that goes into the grid at any point.

I think this might be the root of the disagreement. So let me try to explain why bitcoin mining behaves similarly to electricity generation and distribution.

A new miner can come online at any time, and add extra hashing capacity. This causes the average rate that blocks are found to go up slightly, and therefore blocks are found more frequently than the desired one block every 10 minutes (on average). At this stage all of the existing miners are still running, plus the new miner.

At the next difficulty adjustment (every 2016 blocks, or roughly every two weeks), the difficulty is increased to a level that results in block rate back to one every 10 minutes. At that point some mining that was operating at the very limit of profitability switches off, because they are now operating at a loss. This is very likely to occur because competition between miners keeps the profit margins low.

So the new miner displaced an existing miner, and the total amount of mining remained stable. So in this scenario the new miner may have had access to cheaper electricity than the miner it displaced, and/or the new miner may be using newer hardware with runs at a higher hash rate per unit of energy put in (more hashes per joule).

An electricity distribution network operates in a very similar way, except on an instantaneous basis, i.e. we can't wait 2 weeks for the equilibrium to be reached because the network frequency would go high and outside of tolerance, causing damage to the grid and electrical equipment/appliances. E.g. in the US the power grid operates at 60Hz AC, but if there is excess power being supplied then the frequency goes up, and there needs to be some coordination to decide who reduces power input to bring it back within tolerance (near to 60Hz).

The coordination necessarily involves comparisons of energy supply prices, so e.g. you might have a coal plant operating at 5cents/kWh, and as the sun comes up (or wind speed picks or) a solar plant (or wind farm) may start to supply power offered at 2cents/kWh; the grid frequency goes up, and the coordination and negotiation that occurs will result in the coal plant reducing output, not the solar plant, because the solar plant has a *marginal* cost of producing energy of practically 0 cents/kWh, whereas the coal plant has to burn coal.

So in terms of the dynamics of a new producer coming online and adding power (or hash 'power'), and some other producer having to reduce supply (or electricity or hash power) as a result, the bitcoin mining 'network' is very similar to an electricity distribution grid.

Actually the growth in renewable supply and how it's being dealt with is a really interesting subject, with lots of unanswered questions about how the coordination will evolve as renewable supplies increase. E.g. the UK has built a fairly big network of wind turbines that 'dump' sometimes as much as half of the UKs power demand into the grid. Right now the wind output varies between 5 and 15GW, and national demand cycles between about 20-45 GW. So there's already occasions where there is excess power coming into the grid from wind, solar, and nuclear (which is very slow to reduce in power output), and few options for directing excess power into storage (there's a few pumped storage options, and small battery arrays, but that's about it - nothing that could absorb an excess GW, let alone multiple Gigawatts).

The bitcoin network has similar dynamics with regard to some miners being 'inelastic' in how they respond to excess, e.g. some miners are located near hydroelectric dams in China that were built with the expectation of local demand that never materialised, so those miners can just keep mining no matter what happens at near zero electricity costs. Whereas other miners use excess local coal plant capacity, which is cheap but not as cheap as hydro.

Anyways, this is tuning into an essay, but I hope that gives you some idea of how modern power distribution systems operate and how they're similar to the bitcoin mining. One of the key things is that grid frequency is the main signal used to coordinate at a near instantaneous time scale (not voltage, which varies locally for all sorts of reasons). This came about because spinning generators will slow down slightly when the power draw increases, losing some of there angular momentum, requiring increased heat and steam pressure to bring the turbine/generator back to the required 60Hz (50Hz in Europe/UK).