From Mining to Mitigation: How Bitcoin Can Support Renewable Energy Development and Climate Action

Abstract

The world is currently facing a major issue of high emissions from fossil-fuel-based energy sources, which contribute to the persistent problem of climate change. A switch to a renewable-powered infrastructure is necessary to mitigate this challenge. However, the shift to renewable energy faces obstacles, such as high costs and economic uncertainties. This work proposes mitigation of climate change by investigating the potential for bitcoin mining to serve as a means of utilizing surplus renewable energy from planned installations before grid integration. The study’s findings indicate the potential for bitcoin to provide economic benefits as an alternative to grid-powered mining at planned renewable installations across the U.S. states. We show that states like Texas have the maximum potential, with 32 planned renewable installations that could generate combined profits of $47M using bitcoin mining during precommercial operation.

Theory of Constraints and Bitcoin: Introducing a New Fulcrum

“…While outside the scope of the current work, new bitcoin are mined when electrical power it put through application specific integrated circuits (ASICs) to add new transactions to the "proof of work" chain for a block reward. By monetising any spare electricity in a business, bitcoin mining incentivizes the integration of inconsistent renewable electricity generation [23]. In combination with Theory of Constraints, a business could explore opportunities for reducing or optimising power usage, not simply to reduce costs, but for the purpose of accumulating bitcoin with excess (or otherwise wasted) energy.…”

Bitcoin and Its Energy, Environmental, and Social Impacts: An Assessment of Key Research Needs in the Mining Sector

“…Understanding the challenges and solutions related to employing renewable and carbon-free energy sources in large-scale mining operations is also important [28]. Integrating Bitcoin mining with intermittent solar and wind energy systems and electricity transmission grids [29] may expedite the expansion of renewable energy infrastructure and the initial and sustained investments needed for their grid interconnection [30].…”

“…Transmission requirements are a key development issue for renewables, and Bitcoin might allow renewable facilities to generate value without grid buildout. This alone is a key attribute of Bitcoin mining that might enable it to be a true partner for renewables that are located in remote locations, allowing them to produce energy and generate revenue prior to grid transmission connections becoming operational [30].…”