Bitcoin uses huge amounts of energy
Many of us entered the solar industry to make a positive difference in the world—including helping to tackle climate change. But energy consumption for bitcoin mining could negate climate gains made with clean energy. As bitcoin becomes more and more popular the amount of energy being consumed to create it is reaching astonishing levels.
While bitcoin mining operations are distributed around the world and no single authority tracks exactly how much energy is consumed for these activities, researchers have estimated the scale of the energy impact. Writing in Spectrum, Peter Fairley cites Dutch researcher Sebastiaan Deetman of Leiden University who estimates the current energy draw of bitcoin at 700 MW per year and concludes that by 2020 it could reach 4 gigawatts—as much energy as the country of Denmark.
A December 2017 Grist article offered a much more distressing assessment , estimating that, at its current growth rate, the bitcoin network will use more electricity than the United States by 2019. The author asserts that this phenomenon is essentially undoing the gains made in tackling climate change through the growth of clean energy.
Bitcoin mining operations have already caused local grid disturbances in some areas. In Venezuela, where bitcoin is seen by many as a more viable currency than the Venezuelan bolívar (now almost worthless due to inflation), there are reports of bitcoin mining causing instability on the electricity grid .
Powering bitcoin mining with solar could present new opportunities
Despite these troubling energy and environmental implications, the bitcoin network’s need for cheap power raises the question, what are the opportunities for powering bitcoin mining with solar energy?
At least one company is already getting into this space. A company called Envion has a business model that involves the use of mobile bitcoin mining servers (housed in shipping containers) that run on excess energy from solar farms when there is overcapacity in a local area. This makes use of energy that would otherwise go to waste without energy storage, while providing a cheap—and carbon-free—source of power.
The implications of blockchain for the solar industry extend far beyond bitcoin. While bitcoin uses a blockchain as a financial ledger, tracking the creation and movement of currency, blockchains can be used to create decentralized public ledgers of many other kinds of transactions and agreements. As a result, blockchain opens up many other potential innovations for the solar industry:
Blockchain could track and compensate solar energy production
One promising use of blockchain is to verify and compensate the production of solar energy. Writing in MIT Technology Review, Mike Orcutt discusses how these kinds of applications could transform the modern electricity grid , eliminating layers of government and utility intermediaries involved in compensating producers of solar and other renewable energy. This could include using blockchain to track the production and sale of renewable energy credits—like SRECs.
What is SolarCoin?
A related application already developed is SolarCoin , a blockchain-based cryptocurrency created to incentivize greater investment in solar energy. Whereas bitcoin is created by expending energy for computation, the creation of SolarCoin is tied to solar energy production. Owners of solar systems can register them with the SolarCoin Foundation and receive one SolarCoin for each megawatt hour their system generates.
Although creation of SolarCoins is tied to actual production of solar energy , anyone can purchase existing SolarCoins. Those who want to monetize their SolarCoin can convert it to bitcoin and from there into the currency of their choice.
Unlike many solar incentives, like the Investment Tax Credit or SRECs, One interesting characteristic of SolarCoin is that it doesn’t just benefit the system owner. In the case of leased residential systems, the homeowner is the one eligible to receive SolarCoin rather than the company that owns the system. The SolarCoin Foundation explains that they structured the system this way because they believe it more effectively achieves the project’s goal of driving greater solar investment.
Solar installers can also benefit. “For an installer, SolarCoin represents an alternative free revenue for promoting solar power and the use of renewable energies. Installers who refer claimants to the SolarCoin program are entitled to a 10% bounty of the annual claim amount for each facility to be paid out in SolarCoin.”
Blockchain could facilitate solar energy transactions and peer-to-peer energy purchases
Blockchain could also enable peer-to-peer trading of solar energy—simplifying the process of connecting solar energy producers with consumers who want access to sustainable energy.
This approach could provide an alternative to net metering. It could also offer a solution to the same challenge that community solar and virtual net metering seek to solve—allowing households and businesses that can’t go solar themselves to partake in energy from off-site solar projects.
Blockchain could support investment in solar projects
Blockchain could also be used to make investment in solar projects more accessible, helping to increase solar capacity. Writing in Forbes, Roger Aitken notes that “Sun Exchange, a peer-to-peer solar equipment leasing marketplace based in South Africa, has raised $1.6 million (m) in seed financing… to ‘accelerate global access’ to solar power.” Sun Exchange’s mission is “to enable anyone to go solar and transition the planet into a clean energy economy of abundance.”
The company essentially offers a solar crowdfunding platform using blockchain. Investors around the world can buy individual solar cells in arrays for schools, hospitals, wildlife refuges, and other customers in developing nations. They operate in areas that lack consistent access to electricity, but where solar energy is an abundant resource. The systems are leased to customers and investors earn income—in bitcoin or South African Rand—through energy payments once the project is deployed.
While many of these applications are in their early stages, it is clear that the potential uses of blockchain for advancing solar and other forms of clean energy, and even transforming how we manage the electricity grid, are significant.
Whether you’re a bitcoin enthusiast or cynic, other blockchain applications may one day transform the solar industry so you might want to keep an eye on these emerging developments!
source: Aurora Solar