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Will the Appetite for Cryptocurrency & Blockchains Eat Up Renewables?

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Ben Ettlinger's picture
Analyst - Emerging Technologies NYPA

Principal Analyst, Digital Analytics & Emerging Technologies at the New York Power Authority. Founder of Digital Analytics Group at the New York Power Authority. The largest state owned...

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  • May 11, 2021 3:59 pm GMT
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A recent Energy Central story on the Greenidge Power plant in Dresden NY lead the charge in challenging gains the renewable have made over the last few years. Will the appetite for power to generate cryptocurrency out pace or set back the ability to produce enough renewable electricity? "Greenidge is currently only using 19 megawatts of capacity and plans to ramp-up to full capacity by the end of 2022, which would put out about 1 million tons of carbon dioxide per year, 65 percent over the plant’s current permit allowance. According to Coindesk, the plant plans to reach 500 megawatts of mining capacity by 2025, a nearly 25-fold increase over their current consumption. However, the getting’s been good for Greenidge so far and they have no incentive to stop: the plant has reportedly mined 1,186 Bitcoins in the year that it has been operating, at a cost of $2,869 each. Assuming Greenidge sold them all at current boom levels, that’s a profit margin of a little under $70 million. Returns like that would be enticing to any formerly bankrupted power plant looking to reopen." Will job opportunities, economic pressures, a food chain for tax roles? Will bitcoins reverse the trend of closing nuclear plants? Scott Madden is reporting on the potential of using nuclear power to support bitcoin generation. The Ukraine is already planning to do it. Will utilities look to crytocurrency to get back to pre-covid generation levels. Interesting times!! I can't answer the strategic planning questions, but it does look like a lot of data that will be served up for us analytics practitioners to work on..and a lot of bitcoins to "byte'.

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Matt Chester's picture
Matt Chester on May 11, 2021

Will bitcoins reverse the trend of closing nuclear plants? Scott Madden is reporting on the potential of using nuclear power to support bitcoin generation. The Ukraine is already planning to do it. Will utilities look to crytocurrency to get back to pre-covid generation levels. Interesting times!!

What a bizarre series of sentences! Interesting and strange times, indeed. 

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Ben Ettlinger on May 13, 2021

Hey Matt; How's this for perfect timing? Elon Must is halting bitcoin payments for Tesla vehicles because of environmental concerns.
https://www.usnews.com/news/business/articles/2021-05-12/tesla-to-stop-a...

Matt Chester's picture
Matt Chester on May 13, 2021

This seems like a good move, though it's definitely curious that he's giving environmental reasons behind it. When Tesla started accepting Bitcoin as payment, the massive carbon footprint of the world of Bitcoin and other cryptocurrencies was already established. So it begs the question, what changed? What was the motivation to now recognize this challenge? Especially with the close ties between Musk and the world of cryptocurrency, it's a bit eyebrow raising. 

Audra Drazga's picture
Audra Drazga on May 14, 2021

Ben - this seems like it could be an interesting discussion!  I would love to hear from others their thoughts on this post!  

Seb Kennedy's picture
Seb Kennedy on May 19, 2021

Audra, I've been covering the Bitcoin energy debate (and Elon Musk's intervention) in Energy Flux. Here are some recent headlines with embedded links (some free, some paywalled):

Some thoughts / perspective:

I read an article a few years back about mobile phone masts serving as demand anchors for district renewable energy schemes in off-grid remote parts of Africa. The mast provides a fixed revenue scheme for the solar array, which is generated by people paying to use the phone network. This stimulates economic activity and brings prosperity and services to areas that lack amenities.

Any decentralised off-grid demand anchor can (in theory) be used in this way. Bitcoin mining, data centres, mobile phone masts can all enable investment in new green power infrastructure. They can also throw a lifeline to dirty old out-of-the-money coal and gas-fired power plants. The key must be effective regulation of behind-the-meter power generation, and adequately priced emissions. Otherwise we get stuck in a fruitless debate about which data centre, server, quantum computer or cryptocurrency ‘deserves’ to expand its power generation and carbon footprint.

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Ben Ettlinger on May 20, 2021

I do see blockchain potential outside of crypto currency. In DERMS aggregation. With multiple participants including the customer/generators, the aggregators the LCDs and possibly beyond that. EV charging stations, with the EV charging providers, the LCDs, the property owners if they are going to get a piece of the profit. (Like coin washing machines in apartment buildings) etc. etc. Again multiple participants with the need for one version of the  truth. i did speak to one company a few weeks ago that has developed a private block chain for Transmission IoT device integrity. This would prevent bad actors from spoofing sensor readings.

Audra Drazga's picture
Audra Drazga on May 21, 2021

Seb, thanks for sharing the additional articles with me and the community! Very interesting! 

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