Wind & Solar power
Summary
Due to its intermittent nature, the production of Wind and Solar power does not align with consumers' demand, resulting in excess generation and curtailment.
By leveraging the excess electricity generated, Bitcoin mining enhances the profitability and stability of Wind and Solar energy producers.
The combined use of batteries and Bitcoin mining holds the potential to overcome nearly all intermittence-related challenges that limit the quantity of renewable energy a power grid can accommodate.
By improving their profitability and viability, Bitcoin mining incentivizes the deployment of a greater amount of renewable energy.
Bitcoin acts as the perfect catalyst for turning Wind and Solar power grids into a tangible reality.
Intermittency and curtailment
The inherent intermittence of Wind and Solar power production poses significant challenges in aligning with demand patterns. Solar power is limited to daytime, while Wind power remains unpredictable throughout the day.
Empirically, the consumption of electricity exhibits two distinct peaks: during the morning; and late afternoon. This impairment between supply and demand results in periods of underutilized renewable energy.
Hence, the primary challenge associated with Wind and Solar power production can be encapsulated by the notion of intermittence.
Intermittence gives rise to a range of issues such as load balancing and shedding, network voltage fluctuations, energy wastage or curtailment, and more. These problems hinder the establishment of a fully functional power grid relying solely on intermittent power sources.
California serves as a prime example, highlighting the scale of curtailment challenges faced in the renewable energy sector. In 2021, the California Independent System Operator (CAISO) curtailed approximately 1,400 GWh of utility-scale Solar energy and nearly 80 GWh of Wind energy, equivalent to powering almost 220,000 homes for a year.
Bitcoin mining as a solution
Batteries have long been presented as the solution to the intermittence issue, but they alone are insufficient to solve the problem. Firstly, their capacity is finite, unable to absorb any surplus beyond a certain amount. Secondly, batteries compete for scarce resources (such as lithium, cobalt, and nickel), which directs their usage towards sectors where they are irreplaceable (e.g., electric vehicles), thereby increasing their cost and limiting their deployment.
Bitcoin mining presents a complementary option to batteries, offering enhanced flexibility and profitability to energy producers. It provides an alternative outlet when wholesale prices are insufficient or batteries are fully charged.
The key advantage of Bitcoin mining lies in its flexibility, allowing for instant deployment, automatically turned on and off, for any duration. It perfectly aligns with the requirements of Demand-response programs, which prove to be increasingly essential as intermittent energy sources continue to expand.
Wind and Solar power producers, as well as promoters and developers, have a significant opportunity to increase their revenue streams by integrating Bitcoin mining into their business model. Rather than reducing or curtailing renewable energy production due to grid limitations, energy producers can generate substantial passive income by utilizing their surplus electricity for Bitcoin mining.
Benefits for Wind and Solar power producers
Bitcoin mining enhances the profitability of Wind and Solar power by mitigating their intermittence
Intermittence mitigation
Intermittence-related problems, such as power wastage and curtailment, hinder the deployment and profitability of Wind and Solar energy. Bitcoin mining provides a solution by offering a flexible and continuous demand for surplus renewable energy.
Profitability
Integrating Bitcoin mining allows energy producers to generate additional income streams. Bitcoin mining enhances the financial viability of renewable energy projects and boosts profitability, fostering a more sustainable and prosperous energy sector.
Grid stability
Integrated in a Demand-response program, Bitcoin mining supports grid stability by enabling load shedding capabilities. This helps address the intermittence-related problems, preventing grid overloads and voltage fluctuations.
Flexibility
Bitcoin mining provides a flexible outlet for surplus energy during periods of low demand. By harnessing and monetizing excess energy, producers reduce wastage and maximize revenue, further optimizing their operations.
Bitcoin mining is the optimal solution enabling energy producers to balance their intermittence in a profitable way
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Bitcoin's energy mix already comprises 14% Wind and 5% Solar, steadily increasing.
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In some cases (e.g. California), lost energy can raise to 50% of total available Wind power.
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The cost of curtailing Wind production in the UK alone (2022).
How Texas leads the way of Wind power Bitcoin mining
575 MW
As of July '23, Marathon operates 575 MW of power, most of it coming from Wind sources.
4’144 BTC
In 2022, Marathon Digital successfully mined a total of 4,144 BTC, with the majority of their energy mix derived from Wind power sources.
Boosting renewables
Marathon Digital, one of the largest Bitcoin mining companies worldwide, made significant progress in transitioning to more sustainable power sources. The majority of its computational power is now located at the King Mountain Wind farm in Texas. Texas electrical grid benefits greatly from their operations, which allow higher profitability and stability for the network.
“Wind is operating at night. We have an excess amount of Wind, and we need to find a home for that. Otherwise we just have to turn it down. Bitcoin has found a way to take some of that excess electricity during off-peak periods.”