Australia is in a strong position as it continues a drive towards becoming a formidable renewable energy production powerhouse. The nation has taken tremendous strides over the past few years and produced commendable growth in the renewable energy sector. There has been a conscious effort from each of the country’s states to implement their own roadmaps and targets, achieving higher levels of renewable energy produced and used- despite the lack of a consolidated Federal level initiative. While this effort is exciting for the future of Australia’s producers and consumers, it is not without its obstacles. These include high infrastructure capital and time costs for connecting to both the grid and sources of high density demand, the lack of energy storage facilities, and the inconsistency that comes with renewable sources - leading to frequent negative price events in states where renewables already provide most of the energy required. We would like to propose that Bitcoin and other digital asset mining provides the modular adaptability, baseline load and finely tuned demand side energy control required to help stabilise renewable energy production.
Source: Clean Energy Australia Report (2021), Clean Energy Council.
In a recent Linkedin post, Australian Renewable Energy Agency (ARENA) CEO Darren Miller shared a vision for Australia's renewable energy industry to produce “five to ten times more than is supplied by [its] electricity system today.” And given how strong the movement towards renewable energy has been in recent years, there’s a good chance we might really go the distance. To demonstrate this, over the July-September 2021 period, 31 % of the country’s energy was powered by renewable sources. Over the entire year of 2020, 27.7% of the country’s electricity generation was from renewable sources, an all time high, more than double what it was 5 years prior, and we can expect that number to be even higher for 2021. States like Tasmania and South Australia regularly have an oversupply of energy from wind and solar, and the Tasmanian Government has set a target of 200 per cent renewable energy by 2040. Australia’s Clean Energy Regulator’s Q4 2020 Carbon Market Report estimated that in that year, 7GW of new renewable energy capacity had been added to the market; and eligible generation could reach 40,000GWh this year (2021). NSW’s Energy Plan has revealed the establishment of five Renewable Energy Zones, with just the first three being rewarded with $20.7 billion of private sector investment. Without a doubt, Australia has undergone a massive resurgence in renewable energy momentum. Could we be doing even more?
Source: Clean Energy Australia Report (2021), Clean Energy Council.
While the construction and commission of new renewable energy is exciting, it is not without its hurdles. For existing renewable energy sources, there is simply often not enough demand/ storage capacity for the network, leading to a lot of energy being unused or sold to other states. This in turn can lead to negative price events, such as in South Australia where the state saw negative prices in 17% of Q4 2020; and as reported by the Clean Energy Council, “3662 instances in 2020 of negative prices – a record – and triple the number seen in 2016.” These negative price events occur because there is an oversupply of energy and as such a disincentive needs to be applied to prevent the energy overwhelming the network. Unfortunately, with the current transmission network, this is a necessary cost for increasing our renewable energy capabilities. Often, solar and wind generators will have to curtail their power output to avoid these charges, and energy available from the sun and wind is lost. The oversupply has led to a situation where even domestic rooftop solar cell owners might soon be charged for providing energy to the grid. Without anywhere for more power to grow, it would be hard from a business sense to justify the short term addition of renewable energy generators in these energy rich areas.
Another of renewable energy’s major drawbacks is its lack of consistency and reliability. To deal with natural fluctuations in weather, batteries seem to provide a solution - being able to store energy during excess periods and subsequently servicing peak loads and providing to the grid during downtimes of sun and wind. But the implementation of batteries to such a scale is, in itself, an overwhelming project which will take years and billions of dollars to approve, establish and connect to our energy networks. The same issue is at stake for building additional transmission lines - and considering that 80% of Australia’s population lives on the coast, away from vast potential solar locations, this would be a considerable amount of lines.
Geoscience Australia addressed some of the other potential opportunities for growth in the Australian energy industry and their drawbacks on its website. Throughout the summary, they reiterate the fact that many exploratory sources of renewable and zero emissions energy lack access to transmission infrastructure/ high density demand - to a degree where their remoteness is a prohibitive barrier to adoption. Carbon neutral alternatives such as Biomass energy, Geothermal energy, Hydrogen Fuel, Nuclear and Ocean Energy are all present in the remarkably diverse Australian environment, but the initiative to improve such technologies and integrate these resources into our network lacks assurance of demand and funding. As a business owner or operator of renewable assets and generators, would it be worth committing to years and billions of dollars worth of development when you might be faced with negative pricing upon start up - if any demand at all?
Bitcoin mining provides what is quite literally an immediate solution for these problems, and is an industry eager to find renewable energy partners. In the Clean Energy Council’s aforementioned report, 26 corporate power purchase agreements (PPAs) were announced in 2020: the renewable sector relies on these agreements for stable and consistent demand and revenue to hedge against negative price events. Earlier in 2021, Mawson Infrastructure Group and Quinbrook Infrastructure reached a 100% renewable energy deal, supplying energy to their new Bitcoin mining operations. There is clearly an appetite in this energy market for renewable energy generators to cement partnerships that will help establish steadfast demand, supply chains and predictable base loads. As Dylan McConnell of the University of Melbourne stated, “It’s the demand side that needs stability, and there are definitely uncontracted renewable power developers who are hurting because they need new sources of demand.” Mining digital currencies provides both predictable and adaptable demand that would suit these projects perfectly, and allow for ‘behind-the-meter’ energy output straight from these renewable generators; and are deployable instantly. Bitcoin and other digital asset mining companies like Ashur Digital are always looking for renewable energy partners as a way of both accessing power for our operations, as well as supporting the growth of more carbon neutral and renewable power in the country and around the globe. With such a consistent baseload for power output, renewable energy providers can stress less about negative price events, and focus more on expanding their operations to the bountiful opportunities that this land offers.
Unlike other high density demand sources like mineral and fossil fuel mining, digital currency mining energy consumption can be controlled automatically, rapidly and responsively. As the Australian Financial Review writes about growing Bitcoin mining operations in Texas: “[Bitcoin] miners have entered into so-called demand response contracts with the Texas grid, whereby they agree, in exchange for rebates, to shut down their computers at a moment’s notice during times of peak power demand.” Conversely, mining operations can ramp up during periods of high exposure to solar radiation and wind, such that renewable power farms don’t have to curtail their output or have to face negative price events. Avoiding negative pricing leads to less oversight required over energy generation, growth of renewable energy businesses, and more investment into further renewable energy projects.
Requiring little physical infrastructure, and no transmission network, agile Bitcoin mining operations like Ashur Digital can set up beside new renewable energy sources and provide a stable base load and revenue for these projects as soon as they can output energy; a reassuring business prospect for operators waiting to connect to the grid. A wonderful piece from the Harvard Business Review states: “Almost all of the energy used worldwide must be produced relatively close to its end users — but Bitcoin has no such limitation, enabling miners to utilize power sources that are inaccessible for most other applications.” In order to reach ARENA’s 1000% renewable energy target, ‘overbuilding’ is required to ensure that consistent energy reaches Australian consumers. But overbuilding leads to plenty of excess, stranded energy being lost: natural provisions being neglected during both peak times and before infrastructure is connected to the grid. Bitcoin mining operations are well poised to provide demand to balance this supply growth potential, encouraging more facilities to emerge around the nation. In addition, we hope that the increased energy generation in these parts of Australia would help provide reliable energy to remote communities who are often neglected by the network. It seems like a perfect opportunity for Bitcoin mining to continue to grow alongside renewable energy: in a relationship where the two industries work symbiotically to support both a clean energy future and a new digital economy.
We’re excited by the prospect of renewable energy partnerships in the Bitcoin and cryptocurrency space, and always have our ear to the ground for new technological innovations that emerge around carbon neutral energy. We envision an energy economy that works hand in hand with digital asset miners; a future where together we power both a cleaner environment and exciting new financial architecture. If you are an investor or renewable energy operator interested in exploring what such a partnership might look like, we’re always eager to discuss how we can collaborate to work on these new technologies. Happy #ecomining!
