Blockstream announced last week a pilot project with Block and Tesla to develop a solar-powered Bitcoin mining farm in West Texas. Its goal is to show that crypto mining can stimulate development of renewable energy projects.
Renewable crypto mining in Texas
Blockstream CEO Adam Back announced at the Bitcoin 2022 Conference in Miami a pilot project to develop a solar-powered cryptocurrency mining facility in West Texas. The collaboration with digital payments provider Block (formerly Square) aims to demonstrate how crypto mining can finance renewable energy generation.
Blockstream and Block began development in June 2021, with a total projected cost of $35 million. When completed, it will produce up to 3.8 megawatts and utilize four Tesla Megapack high-capacity battery systems to provide 12 megawatt hours (MWh) of storage. Initially, it will not connect to the outside electric grid, but will be used to power a Bitcoin mining farm.
A publicly-available dashboard app will show real-time power output as well as total bitcoins mined. Eventually, it will also provide energy storage data.
According to Bock, If the initial project phase is successful, wind turbines will be added. This would enable mining operations to continue at night with minimal use of the Megapacks.
Even in West Texas, the sun doesn’t always shine and the wind doesn’t always blow. A power plant based purely on renewable energy sources must be overbuilt, to handle peak loads regardless of the weather. This means that most of the time, far more power is produced than can be used. The wasted, unsold energy can make it unprofitable.
Cryptocurrency mining changes the equation by using the excess electricity to power profitable mining operations. This topic is explored in depth in a Coinshares report on the Bitcoin mining network.
Not the world’s first renewable project
The Texas facility will thus serve as a showcase for using crypto mining in the US to encourage wider adoption of renewable energy sources by making it economically viable. Similar projects are already operational elsewhere in the world.
Spanish firm Meatze Energy Solutions designs, builds and operates modular mining facilities known as Proof of Work Containers that collaborate with renewable energy producers. One such facility in southern Spain includes a 10-megawatt solar farm, of which Bitcoin mining consumes about 500 kilowatts. The remainder is sold to the local electrical grid. Similar modular container mines are being deployed across Europe.
One of HIVE Blockchain’s largest cryptocurrency mining farms is located in the town of Boden in north Sweden. The 30-megawatt facility, currently expanding to over 17,000 mining rigs, draws power from two nearby hydroelectric plants. HIVE’s facilities in Sweden, Canada and Iceland all use 100% green energy.
The Blockstream/Block project coincided with a feasibility report published by Braiins, the world's oldest Bitcoin mining pool. It concluded that solar-powered Bitcoin mining wasn’t profitable, even with near-zero electricity costs and recycling of surplus energy.
Once the Texas facility is operational, anyone will be able to view their dashboard app and decide for themselves if it’s successful or not.
This content is for informational purposes only and is not investment advice. You should consult a qualified licensed advisor before engaging in any transaction.