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Bitcoin, the world’s first decentralised digital asset, has initiated a global debate about its energy consumption. Critics label it wasteful, while supporters argue it drives innovation in energy systems.
Beyond the controversy, Bitcoin is redesigning energy production and use. Its mining process encourages the adoption of renewable energy and uses otherwise wasted power. This blog explores how Bitcoin is a driver of global energy change.
Bitcoin’s energy consumption has been controversial, often criticised as wasteful and environmentally harmful. However, a closer examination reveals a more nuanced picture. Research shows that the traditional banking system consumes significantly more energy than the Bitcoin network. Banking uses an estimated 263.72 terawatt-hours (TWh) annually, while Bitcoin’s consumption is roughly 113.89 TWh. Similarly, the gold mining industry uses approximately 240.61 TWh per year, far surpassing Bitcoin's energy demands.
Recent reports from 2024 indicate that over 54% of Bitcoin’s energy now comes from sustainable sources. This growth stems from mining operations seeking cheaper energy alternatives and relocating to areas rich in renewable resources. For example, Bitcoin miners have increasingly utilised hydropower, geothermal energy, and solar farms, which reduces reliance on fossil fuels and helps integrate renewables into the energy grid.
These comparisons and developments show that Bitcoin’s energy use, while substantial, is lower than that of many industries and is transitioning toward sustainability. By relying increasingly on renewables, Bitcoin mining is challenging the perception that it is environmentally harmful and proving its power as a driver of cleaner energy practices.
Bitcoin mining drives renewable energy adoption and enhances grid stability. Miners use "stranded energy"—power that would otherwise go to waste, such as surplus electricity from remote hydropower plants. Miners support the adoption of renewable energy by converting stranded energy into economic value.
In regions rich in wind or solar energy but lacking infrastructure, miners consistently demand electricity, making renewable projects more viable and attracting further investment. For example, Bitcoin mining operations in Texas partner with wind and solar producers to use excess power and stabilise the grid during high demand.
A recent Forbes article highlights Bitcoin mining’s growing role in addressing Europe’s energy challenges through its integration with renewable energy systems.
Bitcoin mining goes beyond creating digital currency—it solves real-world energy problems. In Germany and Austria, miners collaborate with renewable energy providers to stabilise grids and reduce waste. By using surplus energy during periods of high production, miners prevent curtailment and ensure clean energy isn’t wasted.
Projects like Austria’s partnership between the Austrian Power Grid and 21Energy leverage surplus hydroelectric power to stabilise the grid. In Finland, the “Genesis” project uses Bitcoin miners to generate heat for a town of 12,000 residents, supplying hot water and home heating during winter, showcasing its practical energy benefits.
As Chair of the European Bitcoin Energy Association, Rachel Geyer concludes, “Bitcoin mining isn’t just about creating digital currency—it’s about solving real-world problems.”
Building on its ability to address energy challenges, Bitcoin mining’s decentralised nature further revolutionises energy systems by enabling innovative grid solutions and enhancing access to renewable resources.
Bitcoin mining promotes decentralisation and supports energy grid innovation. This decentralised approach reduces strain on central grids, lowers transmission losses, and makes renewable energy projects in remote areas more viable.
Miners also stabilise grids by balancing renewable energy fluctuations. They consume excess power during high-output periods and scale back during peak demand, helping integrate renewables without expensive infrastructure upgrades. Additionally, Bitcoin mining encourages the development of microgrids in regions without reliable grid access. As anchor customers, miners create steady demand, funding local energy infrastructure that can later support nearby communities.
By decentralising energy consumption, stabilising grids, and enabling renewable projects in underserved areas, Bitcoin mining drives innovation and supports sustainable energy systems.
5. Benefits for Variable Renewable Energy (VRE) Producers
Variable Renewable Energy (VRE), such as wind and solar, is clean but inconsistent due to changing weather. Bitcoin mining addresses this by constantly buying excess electricity, providing VRE producers with reliable revenues and reducing waste.
The chart above illustrates how Bitcoin mining benefits wind VRE producers:
Without Bitcoin mining, wind farms would stop production at the VRE choke point during low-demand periods, generating no revenue.
With Bitcoin mining, producers sell surplus energy q(Bitcoin mining) at P(bitcoin mining electricity). The red-hatched area represents the additional revenue earned by electricity of sale that would otherwise be wasted.
This consistent demand stabilises producer revenues and improves the economic viability of renewable projects without requiring government subsidies. Bitcoin mining creates a market-driven solution, attracting investment in VRE infrastructure while reducing curtailment and enhancing grid efficiency.
Bitcoin mining is transforming global energy systems. Reducing energy waste, supporting renewable energy projects, and stabilising grids drive investment and innovation in clean energy infrastructure. Bitcoin’s ability to consistently demand surplus energy highlights its role as a powerful catalyst for adopting sustainable energy solutions. At Pantheon Mining, we’re driving the change to sustainable energy through Bitcoin mining. Join us in building a cleaner future.
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