The dirty secret to bitcoin’s huge power consumption is its massive power consumption. Computers around the world consume enough electricity to mine bitcoin. It is somewhere around the Netherlands and Poland, depending on how you estimate.
Electricity has become so important that one private equity company owns a power station to mine bitcoin. Greenidge Generation claimed that they could mine one Bitcoin for less than $3,000. The potential for profit is still there today, even though bitcoin prices are currently at $40,000, which is about 30% below their peak.
An investor-owned utility dropped a containerized storage center located outside a coal-fired power station 10 miles north of St. Louis. Ameren, the utility was having trouble keeping the 1,099 MW power station profitable when wholesale electricity prices dropped. It was not well-suited for running when there was high demand, also known as peaker duty. They are now trying to run it full-time, and then using excess electricity to mine Bitcoin.
You can’t handle the load
According to Ameren executives, wind and solar power are responsible for the high load variability that tax the 55-year old power plant. Mining bitcoin, the utility claims, could help reduce its carbon footprint. It would allow it to run its plants more consistently than ramping them up or down, which can lead to increased emissions.
According to Warren Wood, vice president of regulatory affairs and legislative affairs at the utility, ‘We experience pretty dramatic changes in load every minute, second by seconds at times’ E&E News. They only need to disconnect the power from the mining operations when it is running full-time. Wood stated that it takes approximately 20 seconds to switch power back to the grid.
This is a huge improvement on gas peakers which can take at most five minutes for full capacity to be reached. It’s still incredibly slow compared to grid-scale batteries which respond in milliseconds.
E&E News’ Joshua Rhodes, a researcher at the University of Texas at Austin, stated that cryptocurrency mining operations could add a lot of value to the grid. He said that this is due to the speed at which they can move up or down. He said that cryptocurrency mining can reduce emissions if done correctly. It can also increase emissions if it isn’t.
Ameren tried to get ratepayers to pay a portion of its bill, but Missouri’s consumer advocate opposed it. Geoff Marke, the chief economist at the Missouri Office of the Public Counsel wrote in a filing that Ameren Missouri wanted to get into speculative commodities like virtual currencies. This venture is out of the purview of electric utility regulation and, if permitted, could lead to ratepayers being asked to raise capital for almost anything.
According to the utility, if its bitcoin experiment succeeds, it may attach similar containerized data centres to wind and solar farms in order to absorb excess electricity during periods of low supply or high demand. In 2028, the coal-fired power station that was used in the experiment will be closed.
Ameren states that it is pleased so far with the project. It has produced 20 coins so far and produces a new coin about every 15 days. The cost of running the mine and the volatility of bitcoin will determine whether the math works. The company has made approximately $800,000. Since April when it turned on the miners.