Wind and solar installations across the United States could reap millions of dollars from mining cryptocurrency such as Bitcoin during the early stages of renewable energy projects, according to a new study. The analysis suggests the potential to flip the script on cryptocurrency mining, which uses lots of electricity and therefore frequently generates high carbon emissions.
“Crypto operations such as Bitcoin mining, which are often criticized for their high energy consumption, hold the potential to play a significant role in promoting renewable energy development and aiding climate action efforts,” says study team member Fengqi You, a sustainability researcher at Cornell University in Ithaca, New York.
After renewable energy projects are built, there is generally a period of time when they can generate power but are not yet hooked up to the broader electric grid, so they cannot generate any revenue. Bitcoin mining could ease the financial stress of this phase, the new study suggests.
In the study, You and his collaborators assembled data on the electricity generation potential for various wind and solar installations planned in the United States. They combined this with information about the energy and financial costs involved in Bitcoin mining, as well as the revenues that could be generated. They fed all this data into a mathematical model to determine the maximum profit that each planned renewable energy project could yield from Bitcoin mining, given the power available.
All 58 of the planned renewable energy installations assessed in the study could turn at least a small profit from Bitcoin mining, the researchers report in the journal ACS Sustainable Chemistry & Engineering.
“The extent of profitability and the potential climate benefits of combining Bitcoin mining with renewable energy installations were more significant than we initially anticipated,” You says.
Texas emerged as the state with the greatest potential for the scheme, with 32 planned renewable projects that could generate a total of $47 million from Bitcoin mining in the pre-grid-connection phase. California also stands out as a good place to implement the system, and Colorado, Illinois, Iowa, Nevada, and Virginia have fewer installations but have significant potential for Bitcoin profitability as well.
“This approach enhances the economic feasibility of renewable energy projects, thus contributing to the broader goal of reducing reliance on fossil fuels and also shifts the mining operations primarily relying on fossil-dependent grids to clean energy sources,” You says.
The best renewable projects for Bitcoin mining are the ones with the most stable and consistent electricity generation, the researchers found. Solar projects tend to have greater profit potential than wind projects. The highest potential profits were seen at two solar projects in Texas, which could each generate a maximum profit of $3.23 million. The greatest potential profits for a wind energy project, also in Texas, were $2.65 million.
Policymakers could help facilitate the scheme by providing carbon credits or other economic incentives for environmentally responsible cryptocurrency mining, the researchers suggest. Policies to encourage cryptocurrency mining operations to reinvest some profits into further renewable energy development – perhaps in locations distant from the original installation – could further maximize the environmental benefits.
The approach isn’t without risks, the researchers say. “One primary concern is the increasing energy intensity of Bitcoin mining. As the complexity of mining increases, it requires more computational power, which in turn can lead to higher energy consumption,” You says. This could result in more fossil fuel use if the energy required for Bitcoin mining outstrips the renewable power available. It could also create a strain on the electricity supply available for local communities. So implementing the scheme will require careful planning and regulation to avoid negative impacts, You says.
Source: Lal A. et al. “From Mining to Mitigation: How Bitcoin Can Support Renewable Energy Development and Climate Action.” ACS Sustainable Chemistry & Engineering 2023.
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