Blockchain & Crypto

How Bitcoin Mining Promotes the Transition to Renewable Energy

Eco-activists have long been opposing crypto mining due to its perceivably high energy intensity. What if I tell you that Bitcoin mining can not only be sustainable but also promote the global transition to renewable energy? 

How Bitcoin Mining Promotes the Transition to Renewable Energy

International energy agencies are continuously monitoring electricity consumption of both local and global Bitcoin mining initiatives. Per Cambridge Bitcoin Electricity Consumption Index (CBECI) estimates, global electricity usage associated with Bitcoin mining ranged from 67 TWh to 240 TWh in 2023, with a point estimate of 120 TWh. It equals about 0.2% – 0.9% of global demand for electricity, similar to an annual electricity use of one regular country. 

Although these statistics do seem alarming, there’s another side of the coin that typically goes unnoticed. 

What Is Bitcoin Mining?

For those, who are still only vaguely familiar with the concept of cryptocurrencies, Bitcoin mining may seem too complex to grasp. If you’re a novice to crypto, you may only be aware of the trading part, which is quite similar to a currency exchange. However, the mining process is not visible to the end customer or investor. Yet, it is the essence of how Bitcoin works.

Decentralised systems, on which cryptocurrencies are based, do not have a single regulator to confirm the legitimacy of transactions and manage the whole network. Instead, they use various confirmation mechanisms. They are:

  • proof of work
  • proof of stake
  • proof of capacity
  • proof of authority
  • proof of importance
  • proof of weight
  • delegated proof of stake
  • practical Byzantine Fault Tolerance

All these methods serve one purpose – to confirm that a transaction is valid and genuine. Despite the variety of choices, most popular blockchains rely on either of the two first options: proof of work (PoW) or proof of stake (PoS).

While proof of stake blockchains (e.g. Ethereum, Cardano) use crypto staking, which is somewhat similar to shareholding, to confirm a new transaction block, the proof of work mechanism relies on crypto mining.

Crypto mining is the process of solving a complex mathematical puzzle performed by specialised hardware. Solving this puzzle requires computational power and energy to perform numerous calculations per second in an attempt to find the solution. Upon solving the puzzle, the miner adds new “blocks” of transactions to the historical record. The fact of the transaction is immutably confirmed while the miner is rewarded with newly minted Bitcoins and transaction fees.

How Crypto Mining Can Be Sustainable

While it is indisputable that Bitcoin mining requires a lot of energy, this energy should not necessarily be provided by fossil fuels and other unsustainable resources. Crypto mining can and increasingly does use sustainable energy.

As all the other industries that realise the importance of the environment preservation, the Bitcoin mining sector has been gradually shifting toward alternative energy sources. On Jan. 18, 2024, Bitcoin mining sustainable energy usage recorded a new all-time high of 54.5%, according to the Bitcoin ESG Forecast.

Bitdeer Uses Hydroelectric Power for Crypto Mining

There are numerous initiatives aimed at increasing the sustainability of blockchain operations. One example is the joint project of crypto cloud mining service platform Bitdeer and Druk Holding and Investments (DHI), the Royal Government of Bhutan commercial arm. The two parties want to develop environmentally sustainable, carbon-free digital asset mining operations in the Himalayas, leveraging Bhutan’s abundant hydroelectric power.

Bitdeer’s new 100 MW facility is the first phase of the project. Bitdeer sees an immense potential for sustainable mining in the country where the atmosphere absorbs more carbon dioxide than it produces, while hydroelectric power is abundant. As the new data centre started operating in August 2023, the very next month Bitdeer witnessed its mining activities triple. The important thing is that this surge in operational capabilities happened without much additional environmental harm. In fact, the firm’s zero-carbon data centre in Bhutan accounted for 45% of the increase. 

El Salvador Won’t Let Volcano Energy Go to Waste If It Can Be Used for Bitcoin Mining

The small country of El Salvador, which is the first country that recognised Bitcoin as legal tender in 2021, is home to 30 volcanoes, 20 of which are potentially active. This energy is now being harnessed for an ambitious $1B Bitcoin mining project.  “Volcano Energy” 241 megawatt (MW) renewable power generation park. The new venue will be situated in the Metapán region, combining solar and wind projects upon a base set of geothermal expansion.

Volcano Energy is a pioneering Bitcoin mining company, with a unique public-private partnership scheme that makes all Salvadorans stakeholders of 23% of the revolutionary project. At the same time, the initiative has faced criticism over delays in financing and construction, as well as scepticism about the expected Bitcoin adoption. 

Earlier, the El Salvador government passed the bill to fund building ‘Bitcoin City – a metropolis project where geothermal energy from the nearby Conchagua volcano will power the urban infrastructure, as well as the mining of cryptocurrencies.

How Bitcoin Mining Promotes the Transition to Renewable Energy

Nuclear Energy Is Also an Option for Bitcoin Miners

In early 2023, the construction of Cumulus Data – the first nuclear-powered data centre that will host Bitcoin mining – was completed in Pennsylvania, U.S. This 48-megawatt, 300,000 square foot data centre will be powered by direct connection to the 2.5-gigawatt Susquehanna nuclear power station. 

Nuclear power plants provide a reliable and relatively low-cost source of electricity advantageous for Bitcoin miners, as electricity costs are a significant factor in their operational expenses. Besides, nuclear power generation produces low greenhouse gas emissions compared to fossil fuels and provides a stable energy supply, crucial for Bitcoin mining operations 24/7.

The company behind this project, Talen Energy, has already identified another 18 sites with direct connection to a power station and potential to become data centres. With its advanced efficiency, nuclear power can provide crypto mining facilities with the energy otherwise ‘lost’, which is approximately one–third of the world’s energy annually.

How Bitcoin Mining Incentivises Renewable Energy Use

Besides the obvious benefits of Bitcoin miners moving to alternative energy sources, there is still an untapped potential in crypto mining combined with renewables. 

Bitcoin Mining Turns Excess Energy Into Revenues

For businesses and governments of this world, economic benefits are the most obvious reason to adopt certain innovations. Bitcoin mining provides exactly that component to the renewable energy initiatives.

According to a recent study by Cornell University in the United States published by ACS Sustainable Chemistry Engineering Publications, establishing Bitcoin mining operations in strategic locations could bring additional revenue that can be further invested in renewable energy projects. By rough estimations, monetising the excess power collected by renewable energy projects via Bitcoin mining could earn hundreds of millions of dollars. 

For example, during the pre-commercial development phase of wind or solar farms, the farms are already generating electricity, but are not yet integrated into the broader grid. With the help of crypto mining, developers could recover millions of dollars that go to waste during this phase and use them to fund other early-stage renewable projects. According to the Cornell researchers’ study, Texas alone with its 32 planned renewable projects could generate a combined profit of $47 million by mining Bitcoin during pre-commercial operations.

For the renewable energy project teams, Bitcoin miners can become prospective customers who might fill the gap between energy production and demand at peak times. Bitcoin miners are typically not bound to one location and their mining sites can be easily moved to places with the most efficient strategic energy use to maximise both profits and carbon-free operations.

How Bitcoin Mining Promotes the Transition to Renewable Energy

Bitcoin Mining Serves Local Communities, Industries and Economies

Besides environmental and economic benefits, sustainable Bitcoin mining can have a significant positive social impact. Thus, practical use cases for crypto and its mining technology continue to emerge in Africa where rural communities often lack access to basic infrastructure. 

One example is a hydro-powered crypto mining project Gridless Compute that has been powering an entire rural settlement in Kenya. Gridless claims it has lowered energy rates for 2,000 people, the equivalent of 500 families. According to their calculations, costs have decreased from $10 per month to $4. 

The company works with renewable, rural, mini-grid energy generators in Africa. It monetises the full capacity of their output as a buyer of last resort, serving as an anchor tenant for new energy generation creation.

In Ethiopia, Hashlabs implemented a Bitcoin mining facility powered solely by renewable energy sources. The country can now use its 25% electricity production surplus to earn more money for the local economy and finance new electrical infrastructure development for its growing population.

In addition, a 2022 report from Arcane revealed the Bitcoin mining potential to transform the energy industry and solve many real-world energy problems. For example, Bitcoin mining can help solve issues related to gas flaring — burning natural gas by oil extraction. Arcane suggests that by leveraging the agnosticism, modularity and portability of Bitcoin rigs, miners can set up operations next to oil wells and make the process both cost-effective and eco-friendly. 

Furthermore, the study stated that Bitcoin mining can help the energy industry by repurposing its byproduct — heat. Innovative mining facilities are already exploring ways to capture and utilise the waste heat generated during the mining process. The spare energy can be utilised to heat up homes or industrial premises during the winter. Besides, emissions from heating would be reduced as well. Other advantages of repurposing mining heat include operational subsidies and lower heating costs, so meaningful amidst the unprecedented inflation rates globally.


If analysed thoroughly, Bitcoin mining is not as dangerous to the environment as many people imagine. Like any other industry, it has to be mindful of the energy sources it uses and the ways of offsetting existing carbon emissions. However, unlike any other industry, crypto mining is uniquely positioned to not only become zero-carbon but also solve a lot of existing energy problems for communities and nations. Besides, monetising excess energy through Bitcoin mining is a great incentive for renewable energy providers to scale up their operations. 

Nina Bobro

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Nina is passionate about financial technologies and environmental issues, reporting on the industry news and the most exciting projects that build their offerings around the intersection of fintech and sustainability.