As a unique energy buyer, how does the Bitcoin network play a role in allowing society to deploy more solar and wind power generation capabilities fully? Deploying these power generation capabilities and storing these energy sources aims to promote the transition of the entire society to a cleaner and more resilient power grid. We believe that today’s energy asset owners may become indispensable Bitcoin miners in the future.
Bitcoin miners are unique energy buyers
Bitcoin miners are unique energy buyers because they provide highly flexible and easily adjustable interruptible loads, and provide payments in cryptocurrencies with global liquidity, and are entirely independent of geographic location, requiring only an Internet connection.
Renewable energy is currently the cheapest energy source
Compared with hydropower or geothermal power generation projects, renewable energy is cheaper in some locations, but overall, it is a power generation project with the lowest cost and scalability. We believe that they will only become more affordable over time.
Bitcoin mining is an ideal supplement for electricity production + storage
Combining electricity production with storage and miners, the overall value proposition will be better than building power generation and storage separately. But there are physical limitations on the amount of electricity it can store.
By combining miners with renewable energy production + storage, we believe that it will:
·Improve the rate of return for project investors and developers and push more solar and wind energy projects into the profitable range.
Even if the grid research has not been completed, the construction of wind and solar energy projects is feasible, and Bitcoin miners can still use this energy before selling energy to the grid.
·Provide available excess energy for the grid to cope with increasingly common black swan events, such as the large-scale power outage in Texas in early 2021.
In summary, in a sense, the infinite appetite of the miners allows them to eat the abdomen in the curve of the duck.
Overall, it is logical that developers of public service enterprise-level storage team up with Bitcoin miners to enhance their current battery products.
If Bitcoin mining becomes the most inseparable energy buyer, it will have two significant impacts. To
First, the supply of solar and wind energy during underestimating grid demand will increase sharply. As society begins to deploy more solar and wind energy, we believe this should further reduce their LCOE curve and make future solar and wind energy more affordable.
The second impact may be the massive transformation of the Bitcoin market.
It is estimated that today’s global Bitcoin mining capacity is only 10-20 GW. Therefore only 20% of them can bring 40 GW of new mining power to miners, dwarfing the current global Bitcoin mining market.
As an intermittent energy source, without Bitcoin mining, solar energy can only provide 40% of grid power. As power companies face the need to invest heavily in significant investments, electricity prices will rise accordingly. And if the Bitcoin mining industry is integrated into the solar system, the energy supplier, whether it is a utility company or an independent entity, will have the ability to arbitrage between the price of electricity and the price of Bitcoin, and it is possible to sell the remaining solar energy without reducing it. Under the condition of profitability, it can meet almost all the electricity demand in the grid.
Under the same other conditions, Bitcoin mining through renewable energy can provide a more significant proportion of electricity supply on the premise of low cost. In the future, it will also make renewable energy more economically competitive.
How to realize the above vision still needs to consider some critical issues. Here, we can see at least three meaningful business opportunities:
Energy management software and services
Energy management companies can build software to achieve the best electricity use: use it, store it, or use it for mining. They monitor project performance by providing key asset management tools and analysis.
There may be a custody market to connect miners, developers and financiers. A key challenge is to address the current credit threshold requirements of existing miners.
ASIC miner production
Through the construction of new chip foundries, to meet the surge in energy demand. Samsung and TSMC recently announced plans to construct new North American factories to seize the leading position in this field. The future will also see continuous improvements in hardware and firmware to increase the durability of mining equipment optimized for the use of interruptible energy.
let’s move. With the continuous integration of Bitcoin and the energy market, we believe that today’s energy asset owners may become future Bitcoin miners. Power executives, custody markets, and developers adjust their strategic roadmaps to accelerate the realization of this future on a large scale.