Although the cryptocurrency mining industry has created a huge revenue stream for miners, it has come under criticism for its massive energy use and the associated environmental concerns. Crypto mining sustainability comes under pressure as the world wakes up to climate change and its impact. Today, we will explore the impacts of renewable energy on crypto mining centers, their advantages and disadvantages, and the way to make the process more sustainable in the future.

Current Energy Demands of Cryptocurrency Mining

The reason behind the high energy usage in the cryptocurrency mining industries is mainly due to the requirement of constant power supply for the giant data centers inclusive of unique, specialized hardware like the ASIC miners. As of 2024, the global electricity consumption of Bitcoin mining is estimated to be around 176.02 terawatt-hours (TWh) annually. This amount of energy consumption is comparable to that of some small nations, such as Egypt, Malaysia, and Poland. Many mining operations rely on coal and natural gases for electricity generation, this has resulted in so much emission of greenhouse gas causing climate change. With the growth of the cryptocurrency industry, energy consumption also increases, which makes the shift to renewable energy sources critical. Consequently, more large enterprises are now looking for cleaner power solutions like hydropower plants in Norway.

Benefits of Renewable Energy for Cryptocurrency Mining

Although it may be much more expensive to invest in renewable energy structures like solar panels or windmills, facilities that embrace renewable energy tend to have low operational costs in the long run. This is because the operating energy costs are comparatively lower and there could be tax benefits that are accrued to using green technology. For instance, Bitdeer's use of hydropower in its Norwegian mining facility has led to a gradual reduction in its carbon footprint each year, enhancing its resilience against fossil fuel price volatility and providing greater stability in electricity costs.

Cryptocurrency mining facilities can greatly reduce their carbon footprint through using renewable energy, contributing greatly to the fight against climate change. Crypto Mining companies can also benefit in terms of reputation, appeal to green investors, or develop environmental credentials to help the renewable energy transition for a low-carbon economy.

What is a Green Data Center?

A green data center is a facility that is power efficient and has incorporated energy from renewable sources in its operation. Green data centers on the other hand use renewable energy like solar, wind, hydro, or even geothermal sources of energy as opposed to fossil fuel-dependent data centers. These centers employ efficient cooling technologies, power-optimized hardware processors, and efficient management systems to minimize energy use, emission of greenhouse gases, and carbon footprint.

Advantages of Green Data Centers

• Energy Efficiency: Green data centers are energy efficient because they incorporate the latest technologies in cooling and power usage. For instance, liquid cooling systems are preferred over air cooling systems because of their efficiency in containing temperatures with low power consumption.
• Lower Carbon Emissions: Green data centers also depend less on fossil fuels through the adoption of renewable energy, hence minimizing emissions.
• Cost Savings: In the long run, green data centers prove to be cost-effective in terms of reduced energy consumption and cooling charges. Further, it is worth pointing out that, using sustainable practices in the facilities also qualifies for government incentives and rebates.
• Enhanced Brand Reputation: Operating a green data center can improve a firm’s image by showcasing the organization’s consideration of sustainability which is valuable to clients and investors.

Types of Renewable Energy Sources for Mining Facilities

Solar Energy

While not widely used in the mining sector yet, solar energy is one of the most well-liked renewable energy sources for large data centers. Solar panels convert the sun’s energy into usable electricity, making it a clean and renewable power source. TEPCO's subsidiary Agile Energy X is mining Bitcoin in some of its facilities using excess solar energy from solar farms in the Japanese prefectures of Gunma and Tochigi. TEPCO hopes to eliminate energy waste and provide renewable energy producers with an extra source of income by utilizing this excess green energy.

Wind Energy

Wind energy is another potential source of generating electricity that can be used for mining cryptocurrencies. Wind power is harnessed by wind turbines to produce electricity that may be used immediately or stored for later use. Mining companies like Marathon and Bitfarms have started using wind power for cryptocurrency mining in locations such as Texas and North Dakota in the United States. Bitdeer has been seeking ways to balance its use of wind energy and other renewable energy sources as well.

Hydropower

Hydropower is one of the widely used renewable energies with long-term experience and comparatively low cost of electricity production, which makes it the primary clean energy choice for many mining companies. Bitdeer’s data centers are located in Norway and Bhutan and are close to hydropower plants to ensure a stable power supply from clean energy. This not only helps to lower carbon emissions but also generates local employment, accommodates peak electrical demands, and offers a stable energy source less sensitive to market volatility.

Geothermal Energy

Geothermal energy which is generated by heat from the interior of the earth is considered one of the steady and consistent renewable resources. While less frequent because of location constraints, it is a feasible solution for cryptocurrency mining centers located in, for instance, Iceland, where geothermal energy is employed to cool and power data centers at a lower cost.

Challenges and Solutions in Integrating Renewable Energy

Integration and Installation Costs

The cost of installation of renewable energy sources like solar panels or wind turbines may be relatively expensive in the initial stages. This not only involves the cost of the equipment but also the costs associated with installation, maintenance, and even possible upgrades to the grid infrastructure. Nonetheless, the long-term savings in energy costs, government incentives, and the declining cost of renewable technologies mitigate these upfront costs.

Location Constraints

The viability of some of the renewable energy sources depends on the location of the sources. For example, solar energy is more efficient in areas with high sunlight intensity, but this can cause problems with overheating of the mining rigs during the day. Wind energy is also valid in regions with a stable wind flow, but in the case of high wind speeds, dust intrusion, and mining equipment damage are possible. The selection of the cooling solutions for the mining rigs should be done carefully. To overcome these limitations, large mining enterprises tend to integrate different renewable energy sources depending on the availability of the sources in the region in order to optimize their usage.

Proactive Steps Towards a Green Data Center

Bitdeer has been preparing for the future of green data centers by acquiring hydropower, improving energy utilization with technology, and incorporating sustainability into its processes. For future development, Bitdeer is going to expand the utilization of renewable energy sources, develop new cooling solutions for mining equipment, and adopt carbon offset programs to further reduce its environmental impact.

Learn More About Our Mining Facilities

Bitdeer’s focus on sustainability and innovation is revolutionizing the way cryptocurrencies are mined in the future. Our facilities are strategically located to leverage the best renewable energy sources available, ensuring efficient and environmentally friendly operations. Please refer to our Data Center page to learn more about Bitdeer’s mining facilities around the world. Bitdeer is at the forefront of this shift, demonstrating that progress and sustainability can be mutually inclusive.