How Bitcoin Mining Brings Solutions to the Energy Sector

More and more energy companies are discovering the benefits of Bitcoin mining: Three Iranian power plants are going to make their energy surpluses available for mining and Ukraine is considering the same with the energy surpluses of local nuclear power plants. In New York it has been happening for some time and a power plant mines about 5.5 BTC per day. Paraguay also prefers to convert the huge energy surpluses of a local hydroelectric power station into bitcoin rather than sell it below market price.


Iran’s Thermal Power Plant Holding Company (TPPH) announced Monday that it wants to make the energy surpluses from three power plants available for Bitcoin mining. These are power plants in Ramin, Neka and Shahid Montazeri with a combined capacity of 5,485 MWh – almost enough to supply half of the Netherlands with electricity.

TPPH hopes that with the help of Bitcoin mining it can weather the economic conditions in the country a little better. Iranian power plants are struggling with increasing production costs as a result of inflation, but are obliged by the government to supply their power to the local power grid at fixed prices. By making their energy surpluses available to bitcoin miners, the energy company hopes to create a stable additional source of income in order to limit the economic damage.

There are probably enough purchases for the electricity. Iran first cracked down on Bitcoin mining, but later introduced regulation and has since allowed more than a thousand miners to mine, including large parties.


In Ukraine, too, voices have recently been raised to convert energy surpluses from local power plants into bitcoin. There, energy consumption fell sharply as a result of the COVID-19 crisis and local nuclear power plants were therefore faced with significant energy surpluses. After all, you can’t just turn a nuclear reactor down a notch when you consume a little less.

The Ukrainian Ministry of Energy therefore suggested in May that this problem could be turned into an advantage by using the energy surpluses for Bitcoin mining. This would ensure that there is always sufficient offtake to use the full capacity of the power plants and it would be a new source of income for the energy companies. It is not entirely clear whether that trial balloon will actually be followed.

“There is a way to transfer this ‘liability’ into an ‘asset’. One of the modern approaches for using excess electricity is to devote it to cryptocurrency mining. That would not only allow to maintain the guaranteed load on the nuclear power plants, but also ensure that companies can attract extra funds. Therefore, it would open the way to a fundamentallynew economy, new approaches, a new market model.” – Ministerie van Energie, Oekra????ne

New York

Boven: Greenidge Generation

In de Amerikaanse staat New York doen ze het wel. Daar installeerde Greenidge Generation onlangs zo’n 7000 Bitcoinminers in hun energiecentrale om met eigen stroom naar bitcoins te minen.

With that, it claims to earn about 5.5 BTC (+/- ??50,000) daily, while the production costs for them as energy producers are of course very low.

Thanks to the extra income, Greenidge Generation is now able to be operational all year round, whereas previously they were only operational during peak times in the summer and winter months.

“Due to our unique position as a co-generation facility, we are able to make money in down markets so that we’re available to catch the upside of volatile price swings.” – Tim Rainey, chief financial officer, Greenidge Generation


Bitcoin mining also seems to be a solution in Paraguay. There, at the Itaipu Dam, is one of the world’s largest hydroelectric power stations, which produces enormous amounts of electricity day and night. The approximately 7 million inhabitants of Paraguay jointly burn only a small part of the generated energy and they normally sell the majority to neighboring countries Argentina and Brazil. Usually far below the market price, because Argentina and Brazil are of course well aware that Paraguay has no other neighboring countries to sell the electricity to.

Bitcoin mining offers Paraguayans an alternative market to escape from this economic ‘stranglehold’. After all, Bitcoin miners are not location-bound and have an almost insatiable appetite for cheap power – exactly the kind that Paraguay has in abundance. Miners can create an almost inexhaustible demand to absorb the excess supply, until prices rise to more average levels through market forces. That would not be a bad thing for Paraguay’s economy.

That is why the ambition is to build the largest bitcoin mining center in the world next to the Itaipudam: the Golden Goose Mining Center. This should have been operational by now, but the new regulations as a result of the international FATF guidelines probably put a stop to this.


There are many more examples worldwide. Like the growing mining industry in Texas that largely runs on energy surpluses from wind energy, which we wrote about before. Or the hydroelectric power plants in China, Iceland, Canada and elsewhere. More and more often it appears that Bitcoin offers solutions for the energy sector.

Energy & climate

When it comes to the energy consumption of the Bitcoin network, the climate quickly comes up for discussion. After all, the climate problem is also partly an energy problem. However, in practice that energy problem often turns out to be a distribution problem. After all, there is quite a lot of sustainable energy, but it is not easy to transport it to the places where it is needed.

In some places, a lot of (sustainable) energy is continuously generated, but there is little consumption. There is then a low energy price because the supply is greater than the demand. Hardly any energy is generated in other places, but there is a lot of demand, for example because many people live there. As a result, the price for electricity is often higher there. In many cases, non-sustainable energy sources are used that are easier to transport.

Sustainable ‘green’ power is therefore not necessarily more expensive and in many cases even cheaper than power from environmentally unfriendly energy sources. Since Bitcoin miners are always looking for cheap electricity, it is estimated that the Bitcoin network runs on green electricity for more than 70%.

Some argue that Bitcoin mining may even contribute to the transition to renewable energy, as it can make renewable energy plants more profitable. However, that kite does not always work, because miners are just as happy to use cheap electricity that is not sustainable. Kazakhstan, for example, is also betting heavily on Bitcoin mining because of low local energy prices, but the energy there comes almost exclusively from coal-fired power stations. In China too, a lot of lignite is still burned.

At the same time, there are also innovative solutions in which Bitcoin miners are used to limit the climate-unfriendly gases released during ‘fracking’. Normally it is too expensive to capture the gases, but thanks to Bitcoin mining it can even be profitable.

Is the energy consumption of the Bitcoin network wasteful? That discussion is also more nuanced than many people think.

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