Bitcoin miners, being the only energy consumers they are, can be a possible solution to the renewable energy waste problem.
Bitcoin mining can be used to consume excess energy produced by renewable energy
According to the latest weekly report from Arcane Researchthe flexibility of BTC miners means they can help mitigate the waste 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 end up generating amounts that differ from the needs of the network.
In times when these generators produce excess energy, energy prices on the market can plummet to very low or even negative rates.
Both wind and solar have seen strong growth in recent years and are expected to continue growing rapidly, according to the report. Here is a graph showing the trend in the global capabilities of these sources so far and how they are likely to fare 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 notes that there are a couple of reasons Bitcoin mining could mitigate the frequency of negative prices in solar and wind power grids.
First, mining is location independent, which means that miners can set up their facilities virtually anywhere in the world without any problems as long as the location has energy available.
And secondly, the mining machines can be turned on and off as and when the miners want, without causing any problems.
These factors mean that miners can move their farms close to renewable sources and only take power when there is excess energy available. At all other times, the generator will deliver it directly to the grid.
Apart from these, there are also other reasons that make mining suitable for this purpose. For example, the portability associated with mining rigs, and the fact that their energy input can be varied notch by notch, allows miners to use exactly the amount of excess energy available.
The report explains that as solar and wind continue to grow, the excess energy they produce will also increase. If not mitigated, this problem can threaten the renewable energy economy and limit the growth of the sector. It would appear that Bitcoin mining could possibly help reduce this problem.
At the time of writing, Bitcoin’s price is hovering around $ 20,200, up 7% in 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