Bitcoin miners, being the unique power consumers they are, can be a possible solution to the problem of renewable energy waste.
Bitcoin Mining Can Be Utilized To Use Up Excess Power Produced By Renewables
Wind and solar power sources don’t generate energy at a constant rate, but at a variable one. This variation isn’t something we can control, so these sources inevitably end up generating amounts different from the grid’s needs.
In times when these generators produce excess energy, the power prices in the market can crash to very low values, or even sometimes negative rates.
Both wind and solar have observed some sharp growth in recent years, and according to the report, they are expected to keep growing rapidly. Here is a chart that shows the trend in the global capacities of these sources so far, and how they will likely do in the future:
Looks like solar will grow much more faster than wind in the coming years | Source: Arcane Research's The Weekly Update - Week 36, 2022
The report notes that there are a couple of reasons why Bitcoin mining could possibly mitigate the frequency of negative prices in power grids with solar and wind sources.
First, mining is location agnostic, meaning miners can setup their facilities pretty much anywhere around the world without any issues, as long as the location has power available.
And second, mining machines can be switched on and off as and when miners like, without causing any problems.
These factors mean that miners can shift their farms close to renewable sources, and only take power when there is excess energy available. In all other times, the generator will deliver it straight to the grid.
Other than these, there are also some other reasons that make mining suitable for this purpose. For example, the portability associated with mining rigs, and the fact that their energy intake can be varied notch by notch, makes it possible for miners to use only exactly as much excess energy as is available.
The report explains that as solar and wind continue to grow, the excess energy produced by them will also become more. If left unmitigated, this problem can threaten renewable energy economics and limit the sector’s growth. It would appear that Bitcoin mining can perhaps help curtail this issue.
At the time of writing, Bitcoin’s price floats around $20.2k, up 7% in the past week.
The value of BTC has plunged down | Source: BTCUSD on TradingView
Featured image from Dmitry Demidko on Unsplash.com, charts from TradingView.com, Arcane Research