@ pam
2025-01-26 16:39:37
Does Bitcoin incentivize innovations in renewable and clean energy sectors? Absolutely.
While the debate about Bitcoin’s energy consumption continues, its role in driving innovation often goes unnoticed.
Over 50% of the energy consumed by Bitcoin miners now comes from renewable sources, and the industry is pushing the boundaries of repurposing waste energy and tapping into underutilized resources.
This sets a clear contradiction from industries like chemicals, primary metals, and textiles, which dominate global energy consumption with coal and natural gas. Despite global initiatives like the ESG (Environmental, Social, and Governance) framework, which mandates sustainability investments, fossil fuels still account for over [80% of global energy](ourworldindata.org/energy-mix) use in 2023. Big corporations can easily "greenwash" their efforts by purchasing carbon credits and slapping on green labels, yet their day-to-day operations remain largely unchanged.
Bitcoin miners, however, are not coerced into adopting clean energy; they are incentivized by the need to minimize costs. Their profitability depends on finding the most affordable energy sources, and this has led to innovations in utilizing surplus and waste energy.
What began with small-scale experiments has now captured the attention of global corporations like Deutsche Telekom and Tokyo Electric Power Company (TEPCO), which are leveraging surplus energy for Bitcoin mining.
Are these developments signaling that Bitcoin mining is becoming integral to mainstream energy systems? The answer increasingly appears to be yes.
I first came across the idea that Bitcoin could incentivize renewable energy through a tweet from [Jack](https://x.com/jack/status/1384903902907314176) a few years ago, and out of curiosity, I explored some of the ways Bitcoin is advancing renewable and clean energy. I’ll share a few examples below. Please note that this is by no means an exhaustive list, but it provides a glimpse into Bitcoin’s role in driving renewable and clean energy innovation.
There are 2 categories of energy sources I looked into :
**Renewables:** Hydropower, geothermal, ocean wave energy, wind power, and solar energy.
**Clean Non-Renewables:** Waste coal, flare gas, and nuclear energy.
### Renewables
**1. Hydropower**
Hydropower is one of the oldest renewable energy sources, but many countries struggle with maintaining an aging infrastructure, leading to abandoned dams. However, countries like Paraguay and Laos have successfully utilized hydropower to meet 90% or more of their energy needs, often yielding a surplus. In [Paraguay](https://youtu.be/JPanr1nsPA4), Marathon Digital Holdings partnered with the Penguin Group to establish a hydro-powered Bitcoin mining facility near the Itaipú Dam. Globally, companies like GRIID Infrastructure and [Sazmining](https://www.hydroreview.com/business-finance/brief-sazmining-adds-hydropower-facility-for-bitcoin-mining/) have integrated hydropower into their operations, with hydropower now accounting for about 23% of [Bitcoin mining’s energy use](https://www.hydroreview.com/business-finance/business/the-major-energy-source-for-bitcoin-mining-is-hydropower/).
**2. Geothermal Energy**
In [El Salvador](https://x.com/BitcoinMagazine/status/1790568657715605534), Bitcoin mining powered by volcanic heat has attracted investments, with proceeds funding schools and hospitals. In the last 3 years, nearly 474 Bitcoin worth $29 million using volcano-fueled geothermal power was mined. In Africa, [Gridless](https://www.cnbc.com/video/2024/04/19/jack-dorsey-backed-start-up-taps-into-geothermal-hydro-and-solar-power-to-run-bitcoin-mines-across-africa.html) leverages geothermal, hydro, and solar power for decentralized mining in Kenya, Malawi, and Zambia.
**3. Ocean Energy**
Ocean thermal energy conversion ([OTEC](https://bitcoinmagazine.com/business/bitcoin-unlocks-ocean-energy)), a 150-year-old concept, is emerging as a viable solution, particularly in regions like Hawaii (Oahu) where traditional renewables face challenges. Not only is the cost of energy the highest in the US, the people of Hawaii face a wastage of energy surplus which can be turned into profit through Bitcoin mining.
When I first read about the potential of ocean energy used for Bitcoin Mining, it was through Lord Fusitu’a, a member of the Parliament of the Kingdom of Tonga in 2021. Unfortunately, he passed away and I was not able to find many updates on it after that. Ocean energy was also tested by [Tara Ocean](https://www.thedrum.com/news/2018/04/17/ff-los-angeles-helps-preserve-the-oceans-mining-bitcoin) as a combination project between Paris and Los Angeles and it showed promising results.
**4. Wind Power**
Texas leads in wind energy, accounting for 25% of its grid. Bitcoin miners have flocked to the state, leveraging tax incentives and abundant wind power to fuel operations, tripling Bitcoin mining hashrate since 2021. DARI (Digital Assets Research Institute) revealed Bitcoin mining saved Texas up to $18 billion by reducing the need for new gas peaker plants. Companies like [German Telekom](https://www.rechargenews.com/wind/german-telecoms-giant-to-trial-using-excess-green-power-to-mine-bitcoin/2-1-1735062) also use excess wind and solar energy for mining, addressing intermittency challenges.
**5. Solar Energy**
[Block Inc. and Blockstream’s](https://www.reuters.com/technology/square-invest-5-mln-blockstreams-solar-powered-bitcoin-mining-facility-2021-06-05/) solar-powered Bitcoin mining facility highlight the untapped potential of solar in sun-rich regions like Africa. Companies like [TeraWulf and Aspen Creek](https://www.forbes.com/sites/digital-assets/2024/02/01/future-of-energy-how-solar-power-is-fueling-the-cryptocurrency-boom/) are also pioneering solar-powered mining operations. In late 2022, Meco unveiled the world’s first solar-electric crypto-mining rigs. Additionally, investments are flowing into companies focusing on renewable-powered Bitcoin mining, with Aspen Creek securing $8 million in 2022 to expand its solar-powered operations.
### Clean Non-Renewables
**1. Flare Gas**
[Crusoe Energy Systems](https://crusoe.ai/newsroom/emissions-into-crypto-wins-millions/) captures methane from oil drilling to power Bitcoin mining, making it carbon-negative and eliminating 99.89% of greenhouse gas emissions. This method is a key example of using waste gas that would otherwise be flared into the atmosphere.
**2. Nuclear Energy**
[TeraWulf’s Nautilus Cryptomine ](https://www.coindesk.com/business/2023/03/06/terawulf-starts-nuclear-powered-bitcoin-mining-with-nearly-8000k-rigs-at-nautilus-facility)facility in Pennsylvania represents the first nuclear-powered Bitcoin mining operation in the U.S., with nearly 8,000 mining rigs online. Nuclear energy is stable, scalable and clean as its low-carbon energy source, making it an attractive option for Bitcoin mining. I recall the mayor of Miami, [Francis Suarez](https://x.com/documentingbtc/status/1405993919347843076?s=21) also recognized the potential of nuclear energy to attract Bitcoin mining operations to the city but I don’t have any recent updates on this.
**3. Waste Coal**
[Stronghold Digital Mining](https://www.reuters.com/legal/crypto-miner-pennsylvania-hit-with-lawsuit-over-pollution-bitcoin-mine-2024-03-26/) repurposes waste coal from old mining sites to generate energy for Bitcoin mining operations. While this method helps reduce the environmental impact of waste coal, it has faced criticism for emissions produced by burning additional materials like tires.
### The Potentials of Bitcoin mining in underdeveloped regions
In regions where traditional energy infrastructure is scarce, Bitcoin mining is a significant opportunity to stimulate the development of renewable energy sources and improve living conditions.
In many African countries, solar and hydroelectric resources remain largely untapped or abandoned, with nations like Congo, South Sudan, and Malawi having less than 10% access to electricity. Bitcoin mining’s energy demand acts as a powerful economic incentive, attracting investments to build infrastructure that enhances access to electricity, clean water, and other basic amenities.
Alex Gladstein beautifully captures this idea in his article "[The Humanitarian and Environmental Case for Bitcoin](https://bitcoinmagazine.com/culture/bitcoin-is-humanitarian-and-environmental)" where he discusses how Bitcoin mining can be a force for good, encouraging investment in renewable energy and providing sustainable economic growth for regions long underserved by traditional infrastructure.
### On a last note
Bitcoin mining is proving to be a catalyst for renewable energy innovation. Despite decades of Keynesian counter-cyclical policies targeted at boosting infrastructure spending, ranging from IMF infrastructure loans in the 1970s to frameworks like the Sustainable Development Goals (SDGs), Millennium Development Plans, and now ESG, the Global South remains impoverished, with many regions still lacking basic amenities. Non-renewable energy usage remain high. Traditional approaches have not solved the problem.
Bitcoin, however, just works.
Its financial system empowers individuals worldwide, breaking free from centralized control, while its mining operations leverage surplus and clean energy sources to drive renewable innovation. With growing global adoption, Bitcoin is no longer an isolated financial system. It is becoming an integral part of daily life and a force for global energy transformation.
As the mining focus shifts toward individual contribution with open-source integrated chips and decentralized mining solutions, we are likely to witness a new wave of renewable energy innovations on a smaller, more accessible scale that anyone can adopt.
The current energy debate surrounding Bitcoin often overlooks its potential. Beyond the criticisms, Bitcoin mining is creating tangible opportunities to innovate in renewable energy, particularly in underdeveloped areas. As the industry grows, it’s becoming abundantly clear that Bitcoin is a key part of the solution to our financial and energy challenges.