By design, Bitcoin is a MASSIVE, mind-boggling energy hog. It uses one half of one percent of the entire global electricity generated. That’s as much energy as Pakistan, a country of 300 million people.
But it’s environmental impact is not what you think.
Eric Holthaus, an excellent author and climate reporter recently wrote about how bitcoin mining is destroying the environment, and killing people. We disagree.
Eric points to the bitcoin mining in Xinjian Province, where Uigher Muslims are undergoing human rights abuses mining coal. What Eric has wrong, is that the coal in not burned in the Province.
Chinese bitcoin mines are located near some of the largest wind, and solar farms in the world. Wind and solar has gotten so cheap to instal that China has built these renewable power sources faster than the transmission lines to accommodate them.
That means on sunny or windy days, if the power doesn’t get used near the resource it doesn’t get used at all.
What If Texas Had a Large Bitcoin Mining Industry?
Let’s imagine that Texas had a 30 MW bitcoin mining industry, located near wind and solar farms. Power markets work by matching expected demand with generators. ERCOT, the grid authority in Texas would have an additional 30 MW of power on hand. When the demand reached unprecedented levels, and 30 MW of thermal power plants froze up in Mid February, power prices skyrocketed.
Bitcoin miners can be completely responsive to price. That means when prices shot up to $900/MWH on February 16th, the entire bitcoin mining industry in Texas could shut down immediately. Miners in other parts of the world would step up and the bitcoin network would be unfazed.
The 30 MW of load from the bitcoin miners would now be available to power the homes that experienced blackouts. At least 30 lives would have been saved, and billions of dollars of economic activity and property damage would be unharmed.
While data centers are not likely to react to spiking rates, bitcoin miners are extremely price sensitive and will kick themselves offline as soon as prices start going up. We suspect China has figured out that this serves as free grid balancing and makes the cost of running their electricity grid much cheaper and easier.
So, Can bitcoin mining be environment friendly?
Yes, in our opinion bitcoin mining can definitely be environment friendly.
Microgrid Media is a leading news organization following the distributed energy transition.