Bitcoin (BTC) may be the last thing to consider when considering ways to ensure a clean energy future. This is particularly the case following a tweet from tech entrepreneur Elon Musk in May, in which he stated that Tesla would no longer accept BTC payments due to the increasing use of fossil fuels for mining.
However, raising awareness of the high energy costs typically associated with Bitcoin mining has not had a negative impact on the crypto ecosystem – on the contrary. After Musk’s tweet, a number of cryptocurrency mining companies came out of the woods to explain how Bitcoin can be mined using renewable energy sources like wind, solar, and geothermal energy.
It’s also important to note that the use of renewable energy to mine Bitcoin was the case for some companies long before Musk raised concerns on Twitter. For example, Peter Wall, CEO of Argo Blockchain – a company focused on large-scale crypto mining – told Cointelegraph that he needed clean crypto mining from the start: and I felt uncomfortable about it. I said, ‘That wasn’t right.’ “
Bitcoin mining helps increase clean energy and profits
Since then, Wall has noted that Argo is committed to becoming “climate positive,” which means that Argo’s activities will become carbon negative rather than neutral. While this may seem like a difficult task, Wall explained that Argo uses hydropower to mine bitcoin at its mining operation in Quebec, Canada. In addition, Wall announced that Argo is currently building a 200-megawatt crypto mining facility in Texas that uses wind power from the Lone Star State’s power grid.
Wall believes that renewable energy and Bitcoin mining go hand in hand, suggesting that the excess electricity generated from renewable sources would otherwise be wasted if left unused:
“Crypto mining removes the power consumption of long transmission lines and uses it directly at its source. It acts as that extra load that can be on most of the time, and when other peak loads have to go into the cities, we can shut it down. “
While this shows that clean energy sources can be used to mine crypto, Wall makes an even more important point regarding renewable energy and storage. According to Square’s report, “Bitcoin Is Key To An Abundant, Clean Energy Future,” solar and wind power have become the lowest and most scalable renewable energy sources to date. It is further noted that these sources will become more affordable over time. However, the report says that solar and wind projects are often built in rural areas that are filled with sunlight and wind but have no end energy use (near loads). To solve such problems, increased transmission capacity and energy storage will again be crucial.
Not only can crypto mining act as a much-needed load balancer for renewable energy, but the process can also ensure profitability for clean energy providers. John Kotek, Senior Vice President of Policy Development and Public Affairs at the Nuclear Energy Institute, told Cointelegraph that, for example, nuclear energy is the ideal power supplier for cryptocurrencies:
“Nuclear power can provide abundant carbon-free energy around the clock, allowing miners to scale their operations in ways that other generating sources cannot. This also helps to operate nuclear power plants more flexibly and profitably. “
Specifically, Kotek mentioned that a major benefit that nuclear power plant operators would get in this case is using the mining operations as a reliable customer that provides stable income for long-term investments in the ongoing operation of the facility. “It’s a win-win situation for both sides,” said Kotek.
This has certainly become apparent as the concept of using nuclear power to mine cryptocurrencies is quickly gaining traction. For example, the North American mining company Compass Mining announced in July that it had signed a 20-year contract with the nuclear fission startup Oklo. This partnership will provide Compass with 150 megawatts (MW) of power after the mini-reactors are deployed for years to come.
Recently, Talen Energy Corporation – one of the largest competitive power generation and infrastructure companies in North America – announced a joint venture with US bitcoin mining company TeraWulf to develop up to 300 MW of carbon-free bitcoin mining capacity. Phase 1 of the joint venture – called “Nautilus Cryptomine” – will include a 180 MW Bitcoin mining facility that will be built on Talen’s digital infrastructure campus next to the nuclear power plant. This means that the Nautilus Cryptomine facility is “behind the meter” in order to offer the miner very low electricity costs.
Bitcoin from renewable sources is becoming more accessible
Also, as the concept of clean crypto mining takes hold, it is interesting to note that new developments are being implemented to ensure that this process becomes more accessible.
For example, Blockstream, a blockchain infrastructure company, recently launched a new service called “Blockstream Energy,” which enables electricity producers in even the most remote locations to sell excess electricity to proof-of-work miners.
Adam Back, CEO of Blockstream, told Cointelegraph that Blockstream leases modular mining units, or MMUs, to power producers, along with an energy purchase agreement where Blockstream buys power on demand. Back stated that MMUs are “self-contained data centers with integrated ASICs, power distribution, networking, cooling, monitoring and management”. According to Back, MMUs are designed for rapid deployment and are scalable in 1 MW modules:
“The goal of Blockstream Energy is to better match the available energy production with the energy demand. Energy producers can not only have control over the energy supply they generate, but also the demand side. This enables energy producers to work much more efficiently and accelerate renewable energy projects. “
Back commented that Blockstream sees Bitcoin as a solution to climate change, noting that mining BTC allows energy producers to monetize their renewable energy assets without the need for subsidies: “The ability to sell excess electricity and avoiding paying for load shedding to remove excess electricity helps renewable projects improve profitability. “
While clean crypto mining seems to be an ongoing trend, the industry still has a way to go before it makes any real impact on the environment. According to the University of Cambridge’s 3rd Global Cryptoasset Benchmarking Study, 62% of crypto miners worldwide rely on hydropower, while 38% use coal and 39% a combination of wind, solar or geothermal energy. In September last year, the report estimated that only 39% of Bitcoin’s energy consumption is climate neutral.
And while advances are being made towards climate-neutral crypto mining, a number of challenges remain. For example, Yaron Ben Nun, founder and chief technology officer of Nostromo Energy – a company that focuses on cold storage systems – told Cointelegraph that while clean mining can certainly work alongside renewables, it most likely won’t be an easy endeavor.
Related: A Green Revolution In Crypto Mining? Industry responds to wake-up calls
For example, Ben Nun mentioned that mining Bitcoin using solar power will likely require batteries to stabilize the electricity generated by the sun in order to store excess energy that can be used overnight. Ben Nun again mentioned that a large number of batteries are required. Second, he pointed out that these mining facilities must be disconnected from the grid or installed directly into a grid that supports remote solar systems, which is rare in regions with low-cost electricity infrastructure.
In addition to these issues, Wall pointed out that MMUs used by Blockstream Energy require a strong internet connection, which could be challenging in remote areas.
Despite all the difficulties, Wall remains optimistic about completely eliminating CO2 emissions. Back said Blockstream is already seeing strong demand for its MMU product, adding, “This will allow power generators to focus on what they do best – generating electricity.”