Bitcoin can play a key role in delivering “an abundant, clean energy future”, suggests a new report from financial services company Square’s Bitcoin Clean Energy Initiative.
The study says the energy demand profile of cryptocurrency ‘miners’ is well-suited to helping balance intermittent power supply.
The term ‘mining’ refers to the process of creating new bitcoin by solving complex computation maths problems, a process that is highly energy-intensive and has garnered controversy surrounding its potential environmental impacts.
However, the Bitcoin Clean Energy Initiative suggests bitcoin mining could help accelerate the transition to renewable power by acting as a flexible load option and easing wind and solar deployment bottlenecks.
It notes that this means bitcoin miners can actually complement clean energy production and storage technologies and allow electricity grids to deploy “substantially more renewable energy”.
The report states: “Bitcoin miners are unique energy buyers in that they offer highly flexible and easily interruptible load, provide payout in a globally liquid cryptocurrency, and are completely location agnostic, requiring only an internet connection.
“These combined qualities constitute an extraordinary asset, an energy buyer of last resort that can be turned on or off at a moment’s notice anywhere in the world.”
The report highlights that by removing bottlenecks caused by grid constraints and intermittency, more solar and wind can be deployed, reducing the cost of renewable power and “bringing them closer to zero marginal cost energy production”.
It concludes: “The bitcoin and energy markets are converging and we believe the energy asset owners of today will likely become the miners of tomorrow.
“Utility executives, sustainable infrastructure funds, and grid-scale storage developers are well-positioned to expedite this future by aligning their strategic roadmap and deploying large scale investments into the emerging synergy between bitcoin mining and clean energy production.”