- The U.S. government should take steps to ensure that cryptocurrency mining operations do not reduce the reliability of the power system or increase costs on the national power grid, according to a report released Thursday by the White House’s Office of Science and Technology Policyor OSTP. Such efforts would fall jointly with the US Department of Energy, the Federal Energy Regulatory Commission and North American Electric Reliability Corp. and could include the development of new reliability standards, OSTP said.
- The United States hosts about a third of the world’s cryptocurrency operations and consumes 0.9% to 1.7% of the country’s electricity, according to the report.
- The report also recommends that the DOE develop energy efficiency standards for cryptocurrency mining equipment and collect additional data from cryptocurrency miners and electricity services, including mining energy usage, fuel mix, and rates of participation in demand response programs.
Deepening on diving:
Further scrutiny and oversight may be inevitable for Bitcoin and other crypto operations, some industry experts say.
The cryptocurrency industry needs “more regulatory clarity to continue growing and expanding,” Digital Power Optimization CEO Andrew Webber said in an email. His company works with miners to help manage their energy use and said the industry “cannot exist outside the scope of the law and regulations if advocates and participants truly want to see global adoption and daily integration “.
Conservation advocates say lawmakers and President Joe Biden need to act quickly on the report’s recommendations.
“We urge Congress and the administration to move quickly to improve monitoring and reporting on greenhouse gas emissions and electricity use, and to set energy efficiency standards that all digital assets must meet,” said Scott Faber. Senior Vice President of Government Affairs of the Environmental Working Group, in a statement.
Biden in March commissioned OSTP to assess the climate and energy impacts of cryptocurrency mining in the United States. The report concluded that cryptocurrency activity is estimated to produce around 25-50 million tons of carbon dioxide emissions annually, “similar to the emissions of diesel fuel used in railways in the United States.”
“At a time when greenhouse gas emissions are rising, our power grid is strained and climate change-induced extreme weather events are always present, no industry should make these existential challenges even greater,” Faber said.
The United States is home to about 38% of global Bitcoin activity, according to the report. This is a rapid increase from around 3.5% in 2020, after China banned Bitcoin in 2021.
According to the OSTP report, Bitcoin accounted for 60-77% of the total global electricity usage of cryptocurrencies in August. Ethereum is estimated to account for 20% to 39%, although the network is prepare for the transition to a less energy-intensive consensus mechanism.
“I think it’s right that people are worried about this,” Webber said of Bitcoin’s energy consumption. But he added that the energy is “greener than most people think. There have been numerous reports and studies showing that it is much greener than most of the grid and many other energy-intensive sectors ”.
Webber also noted that Bitcoin mining “creates an exceptional demand response mechanism” and that its power consumption is inherent in maintaining network security.
The White House report recommends that the US Energy Information Administration and other federal agencies consider collecting data on demand response participation in the cryptocurrency industry, along with mining energy usage and fuel mix. energy purchase agreements and any implications of environmental justice.
The report also considers the potential for new network reliability standards.
The report calls on DOE, NERC and FERC to “conduct reliability assessments of current and anticipated cryptocurrency mining operations on the reliability and adequacy of the electricity system” and, if risks are detected, “consider developing, upgrading. and the application of reliability standards and emergency operating procedures to ensure the reliability and adequacy of the system under the growth of cryptocurrency mining. “
The Biden administration should also consider working with lawmakers to allow the DOE to develop and update “energy conservation standards for cryptocurrency mining equipment, blockchains and other operations,” the report recommends.