- A study finds sustainability-focused bitcoin mining operations can be a partner in the transition to clean energy.
- The data adds a new dimension to the discussion on investing in the energy transition and solving looming grid capacity issues with new technologies.
- Solutions highlighted in this report include utilizing flared gas as a power source, experimenting with new technology for cooling, building new renewable energy sources, and balancing grid instability.
- Read the paper.
New York, US (21 September 2023) – As leaders convene at Climate Week to address global environmental challenges, a new paper sheds light on how bitcoin mining operations can play a role in the transition to renewable energy.
The energy use of bitcoin mines has been a hot topic in the mainstream media, but the case studies featured in the newly released report Proof of Work & Enabling the Energy Transition represent nearly two dozen sites across the US taking various approaches to sustainable operations.
“We hope that these findings will illuminate potential pragmatic paths forward, given that this issue is critical to everyone on the planet,” said Sheila Warren, CEO, Crypto Council for Innovation.
Lack of infrastructure investment means hurdles for using renewable energy
As the world shifts to renewable energy, infrastructure investments face hurdles like grid instability, transmission challenges, and harmful energy byproducts. Renewables, such as wind and solar, experience supply fluctuations due to daily and weather variations. For example, in the month of April 2023, California couldn’t use over 700,000 megawatt-hours of wind and solar power. That is enough energy to power more than 60,000 homes for a year.
The energy produced in remote areas, ideal for generation, often struggles to reach consumers. While wind power supplies over 75% of electricity in 14 states, insufficient transmission lines to connect this region with the rest of the country often result in this clean energy being trapped due to network congestion.
Bitcoin mining can be an important bridge to much-needed investments and market support
The need for action on the energy transition is urgent. Bitcoin mining operations, which are – in essence data centers that power the Bitcoin network – are uniquely suited to address some of these challenges due to their unique combination of flexibility, consistency, and transparency.
Flexibility: Numerous studies have found that a flexible load on renewable-powered grids can be a key solution minimizing the mismatch of supply and demand. Bitcoin mining operations are flexible on two critical axes: (1) location and (2) demand. This means that they can access stranded sources of energy and power up and down, depending on grid conditions.
Consistency: Similarly, sustained demand at-scale is important. Typical demand for energy varies based on several factors such as time of day, population, etc. Consequently, markets for renewable energy sources can face periods of low demand, which affects their market prices and business models. Mining can serve as a consistent source of demand, reducing the need for costly curtailment.
Transparency: Bitcoin, and crypto more broadly, provide a new model for engagement with energy more broadly. The transparency of the industry means that data that can be used to inform decision-making – and, it can provide a model for greater accountability.
The case studies featured in this report include Crusoe Energy, CleanSpark, Lancium, TeraWulf, and USBTC. They represent nearly two dozen sites across the US, taking various approaches to sustainable operations.
“The paper is meant to shine light on one part of the clean energy discussion,” Warren said. “There are companies who want to be a partner in the transition to renewable energy, focus on solutions and invest in technologies that can help us mitigate climate risks.”
Solutions highlighted in this report include:
Utilizing flared gas as a power source to mitigate the effects of methane emissions – which has more than 80x the warming power of CO2 over a 20 year timeframe.
Experimenting with new technology for cooling, which makes up an estimated 40% of energy consumed by mining operations.
Balancing grid instability by powering mining operations up or down within a 5-15 second timeframe.
Building brand-new renewable energy sources, which represent more than 3 GW of added renewable energy to the grid in the long-run.
“Throughout the case studies, one thing became clear: the business models are powered by the unique properties of Bitcoin mining operations,” Warren said. “While other use cases may follow, mining had to be the starting point to make the economics work for investing in these renewable energy sources. Indeed, many of the case studies featured aim to expand their businesses to scale up environmental benefits – but these expansions are powered by the original Bitcoin use case.”
About the Crypto Council for Innovation
CCI is the premier global alliance for advancing innovation. It believes in leading with a global view, advocating for inclusive regulation, and developing evidence-based insights to support government and business leaders. It has teams in San Francisco, Washington, D.C., New York, Denver, London, Brussels, and Hong Kong.