Leveraging Bitcoin Mining to Build a More Sustainable Future

In the past few years, it has been popular to criticize Bitcoin mining’s energy usage as unnecessary and perhaps even damaging, but that narrative is changing. Major institutions, academics, and government officials are starting to realize that Bitcoin’s energy consumption is a feature, not a bug. A growing body of evidence suggests that Bitcoin mining is not a superfluous consumer of energy, but rather a technology that is increasingly being leveraged to build a more sustainable future.

Funding Renewable Energy Projects

Transmission grid connection is a major problem for new renewable energy projects. The Federal Energy Regulatory Commission reports that new renewable energy projects in the US take an average of five years to receive transmission. Each day without a transmission connection is one more day of lost revenue, making funding and building renewable projects more challenging. The technology that can be deployed at these sites to help them generate revenue while they wait for transmission connection already exists.

As a recent study from professors at Cornell University highlights, Bitcoin mining has the potential “to serve as a means of utilizing surplus renewable energy from planned installations before grid integration.” If a new renewable energy development added Bitcoin mining to its site, it could immediately start generating revenue. Once the site receives its transmission connection, the miners could stay and serve as a baseload customer, or they could be redeployed to help fund a new project.

The concept of Bitcoin miners improving the economics of renewable energy applies not just to new projects, but also to existing ones. In Paraguay, for example, Bitcoin mining is emerging as a solution to optimize energy usage. Of the 46 TWh of hydropower that Paraguay generated in 2020, 4 TWh had been wasted. Bitcoin miners, like Marathon, have stepped in to help. By setting up operations near the dams, miners are providing a reliable outlet for that wasted energy while improving the economics of Paraguay’s renewable energy generation.

Stabilizing Energy Grids

Bitcoin mining also makes grids more stable. During Winter Storm Elliot in Texas, Bitcoin mining facilities and other data centers reduced their energy consumption by 91.5% during peak demand. By reducing their energy usage when the power was needed elsewhere, they helped keep critical grid infrastructure operational.

Beyond benefiting the energy sector, Bitcoin mining can also help other industries reduce their greenhouse gas emissions and become more sustainable.

Mitigating Methane

Methane is responsible for at least 25% of today’s global warming and is estimated to be 80 times more potent than carbon dioxide over 20 years. Large methane emitters such as landfills, livestock, and oil fields can convert methane into electricity or renewable natural gas (RNG) to reduce emissions. However, installing pipelines to distribute RNG or transmission lines to transport electricity is often economically infeasible. Many sites are too small or too remote to justify the costly investment in infrastructure. Therefore, to reduce methane emissions, these sites need an on-premise solution. Bitcoin mining is one of the few technologies that can offer smaller and more remote businesses an economical solution to mitigate their emissions.

Marathon and Nodal Power are proving this concept in Utah, harnessing methane as a renewable energy source to power Bitcoin miners. This initiative aligns incentives for all parties involved. Marathon and Nodal gain access to cheaper energy and more diversified operations, while the landfill operator benefits from an economically viable way to reduce emissions.

In Northern Ireland, Tom Campbell, among other farmers, is doing his part to reduce emissions by using Bitcoin mining. Tom’s farm converts the methane released from his livestock into renewable energy. His farm produces up to 700 kilowatts, plenty to power his farm. He uses the excess energy that he cannot sell to the grid to mine Bitcoin.

Across the United States, Crusoe Energy is utilizing natural gas, which is an unwanted byproduct from oil fields, to power Bitcoin miners. If there is no pipeline, the natural gas has no use. For this reason, the gas is often burned - flared - into the atmosphere on-site. The World Bank has recognized Crusoe for its “innovative” approach to decreasing flaring and venting. Similarly, the White House asserts that crypto mining operations that “capture vented methane to produce electricity can yield positive results for the climate.”

Recovering Data Center Heat

Bitcoin miners convert 95% of consumed energy into heat. Instead of letting this heat go to waste, it can be recycled for various commercial and industrial applications, like heating distilleries, greenhouses, and even homes.

KPMG reports that MintGreen launched a pilot project to use Bitcoin miners to heat 100 residential and commercial buildings in North Vancouver, making it the first city to use “digital boilers” as a heat source. The company is also piloting salt and whiskey distilleries that source heat from Bitcoin mining to be used in the production process. Colin Sullivan, CEO of MintGreen, notes that “a space heater requires power and emits heat, but it does nothing else… [Bitcoin miners] also require power, and they also emit heat, but they happen to cough out bitcoin.”

A Dutch farmer, Danielle Koning, has partnered with a Bitcoin mining firm in order to earn income from heating her large industrial greenhouse. She made this move to dampen the effects of rising energy prices, which caused similar greenhouses in the area to go bankrupt.

Recycling heat from Bitcoin miners maximizes energy use. It produces a valuable digital commodity while creating a tangible product. The unique applications that have been discovered for recycling data center heat are a testament to the industry’s creativity.

Why It Works

Bitcoin mining is a prime example of competitive innovation. It is a relentless, zero-sum game to be the first to timestamp transactions on the world’s preeminent blockchain ledger in order to earn rewards. This competition is further intensified by Bitcoin’s fixed supply schedule, which forces miners to be hyper-efficient. Bitcoin’s supply issuance is programmed to halve approximately every four years in events known as “Halvings,” continuing until the final Bitcoin is mined around the year 2140.

Given that the single largest expense in Bitcoin mining is electricity, miners seek the cheapest power they can find. It turns out that often, the most inexpensive power is stranded, renewable energy. The unique economic incentives built into Bitcoin mining encourage miners to find creative and novel ways to harness sustainable energy sources and provide added value as they work to maximize their economic output.

Looking Ahead: The Potential of Bitcoin Mining

All around the world, Bitcoin mining is advancing sustainability in ways previously unimagined.

As a result, the industry is increasingly being re-evaluated as a catalyst for sustainability. It could help renewable energy projects become and remain profitable. It could stabilize power grids. It could reduce methane emissions, and the heat it generates could even be recycled for other productive purposes. The inherent qualities of Bitcoin mining, such as its operational scalability, modularity, and competitive drive for efficiency, align economic incentives with environmental goals.

Bitcoin is not just an innovation as an asset, it is an advanced technology that is being implemented to build a more sustainable future.

About the Author

Authored by Fred Thiel, Chairman & CEO, Marathon