How Cryptocurrency Mining Can Support Large Solar-Battery Installations
Securities.io is not an investment advisor, and this does not constitute as investment advice, financial advice, or trading advice. Securities.io does not recommend that any security should be bought, sold, or held by you. Conduct your own due diligence and consult a financial advisor before making any investment decisions.
Digital assets that rely upon a Proof-of-Work (PoW) consensus mechanism, like Bitcoin (BTC), require a significant amount of energy to be mined. With this being the case, an increasing amount of attention over the past few years has been paid towards ensuring large-scale mining operations transition towards using sustainable energy sources. With so many alternatives available today, where can companies turn to for their energy needs?
Recently, we took a brief look at sustainable energy sources and their adoption rates, with one of those listed being Solar power. Below, we highlight the ability for PoW mining to actually help support larger Solar-battery installations.
Manufacturers and Innovators
Before taking a look at solar powered mining operations, the following companies may be of interest to investors. These are not recommendations, but a few examples of those facilitating growth in the sector.
Tesla is a company that manufactures more than just electric vehicles. It has also developed products such as solar arrays, battery packs, photovoltaic roof tiling, and more.
While 2022 saw a sharp decline in TSLA stock, the tides have turned, with 2023 marking an impressive turnaround of +68.31% YTD at time of writing. Despite a rough 2022, the company was still able to boast a revenue of $81.46B over this time.
Tesla is based out of Texas, United States.
As a Bitcoin infrastructure company, Blockstream is heavily involved in the mining industry, and is actively developing layer-2 solutions like the Liquid Network. Blockstream is particularly notable within the digital asset sector, as it was one of the first companies to successfully issue its own security token, known as ‘BMN1’. These tokens provide investors with exposure to a proportionate share of hashrate and revenue derived from the companys mining operations. To learn more about BMN1, click HERE.
Can PoW Mining and Solar-Battery Installations Help One Another?
Not only can solar farms support large scale mining operations, lowering the environmental impact of the practice, the latter has the ability to help maximize operational efficiencies of such outfits by monetizing any potential waste energy.
In its recent report titled ‘Big Ideas 2023’, ARK Invest notes that,
‘Bitcoin mining machines are a useful energy tool: modular, moveable, and flexible, they pair well with intermittent energy resources like wind and solar installations.
Incorporating bitcoin mining into solar storage systems can enhance the scaling and reliability of grids without increasing the levelized cost of electricity (LCOE). A bitcoin miner can “buy” any excess energy.’
Essentially, PoW mining used in this manner can be likened to regenerative braking technologies found in electric vehicles (EVs); kinetic energy, which would normally be wasted, is harnessed during braking and repurposed to charge power cells. In solar-battery installations, surplus energy that would normally be wasted is captured by batteries, and repurposed/monetized by mining units.
It is important to note, that this is typically only feasible in large installations due to the costs associated with the mining units themselves. If there is not enough surplus/waste energy for the units to boast near 100% uptime, then the length of time it will take to generate a positive return-on-investment (ROI) will greatly increase.
As noted by ARK Invest, mining units are modular, moveable, and flexible. With this being the case, many existing large scale solar farms have the ability to retrofit operations and maximize efficiency by incorporating PoW mining.
Scaled and planned appropriately, many believe that large Solar-battery installations are the perfect energy source for supporting a PoW mining operation. In fact, it is already being done.
A trio of companies (Tesla, Block, Blockstream) believe full-heartedly that mining Bitcoin at scale can be achieved through 100% sustainable energy. To prove this, the companies listed above have embarked on building a facility in Texas, which utilizes a 3.8 megawatt Tesla solar array in conjunction with a 12 megawatt/hr battery pack to run a group of mining units.
The goal is to not only be profitable, but to strengthen the Bitcoin network by harnessing power in isolated areas of Texas, where it is difficult to reintroduce to the existing grid.
Challenges Along the Way
It should be noted that while the idea of PoW mining and solar-battery installations working in unison sounds great on the surface, there are issues at hand that must be considered.
- daylight hours
- increased complexity of systems
Powering a home off of solar in a northern/southern region is one thing. To power a mining operation however, is a different matter. For the idea to work, such installations are typically going to be restricted to regions closer to the equator that boast longer daylight hours.
Is it Worth It?
With regards to the aforementioned project involving Tesla, Block, and Blockstream, we will have to wait and see if it turns out to be profitable – or at least break even. However, the idea/concept behind monetizing waste energy is an absolute no-brainer – yes it is worth it.
With PoW mining being location-agnostic, isolated regions that are rich in energy, but lack the infrastructure to capitalize on the resource, can finally do so. Whether this be large solar-battery farms, hydroelectric dams, wind turbines, or something else entirely.
A perfect ongoing example of this is the famed, but troubled, Virunga National Park. A prized gem in the Democratic Republic of the Congo, Virunga is home to some of the worlds most amazing primates like the Eastern Gorilla and Golden Monkey.
For years, tourism provided much of the funding necessary to care for this National Park. However, when COVID wreaked havoc on tourism over the course of multiple years, along with ongoing local conflicts, the park needed to find a way to supplement this lost income. This is where Bitcoin mining came in to the equation.
While Virunga may have seen tourism die off, it still boasted a 15 MW hydroelectric dam that produced power 24/7. By establishing a mining operation, consisting of nearly 3,000 ASIC devices, this energy was/is able to be monetized and support continued operations in Virunga to protect the wildlife within.
The bottom line is that the best source of energy is the one most plentiful, and accessible. There are so many options for power generation in 2023, that while it may not always take the form of solar, the idea of mining through use of waste energy is an attractive option.
So overall, in regions which boast substantial peak sunlight hours, can mining cryptocurrencies support large-scale Solar battery installations? Absolutely.