Bitcoin miners, being unique electricity consumers, could be a potential solution to the problem of renewable energy waste.
Bitcoin mining can be used to harness excess electricity produced by renewable energy.
According to the latest weekly report from Arcane Research, the flexibility of BTC miners means they can help reduce the wastage produced due to the nature of renewable energy resources.
Wind and solar power sources do not generate energy at a constant rate, but at a variable rate. This variation is not something we can control, so these sources inevitably generate different amounts than the grid needs.
In times when these generators produce excess energy, electricity prices in the market can crash to very low values, or sometimes even negative rates.
Wind and solar have both seen some sharp growth in recent years, and according to the report, they are expected to grow rapidly. Here is a chart that shows the trends in the global capabilities of these sources so far, and how they will 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 states that there are some reasons why bitcoin mining could reduce the frequency of negative prices in electricity grids with solar and wind sources.
First, mining is location agnostic, meaning that miners can set up their facilities anywhere around the world without any problems, as long as electricity is available in the location.
And second, the miners can be turned on and off whenever the miners want, without any problems.
These factors mean that miners can move their farms closer to renewable sources, and take power only when additional energy is available. At all other times, the generator will transmit it directly to the grid.
Apart from these, there are other factors which make mining suitable for this purpose. For example, the portability associated with mining rigs, and the fact that their energy intake can be at varying degrees, makes it possible for miners to use only as much additional energy as is available.
The report suggests that as solar and wind continue to develop, the additional energy they produce will increase. If this problem is not taken care of, it can become a threat to the renewable energy economy and limit the growth of this sector. It appears that bitcoin mining may perhaps help alleviate this issue.
btc price
At the time of writing, bitcoin is priced around $20.2k, up 7% over 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