Amid recent financial setbacks and growing concerns over the environmental impact of cryptocurrency mining, Bitcoin (BTC) miners are looking for innovative ways to reduce costs and operate sustainably.
Bitcoin mining is an energy intensive process, making power the biggest expense for mining operations.
In order to address this issue, mining companies are seeking low-cost power sources to remain profitable and competitive, with renewable energy becoming the preferred choice for its cost-effectiveness and environmental benefits.
Steven Lubka, the managing director of Swan Bitcoin, a Bitcoin-focused financial services company, said that the average cost of mining a single Bitcoin is around $26,000.
However, mining companies that utilize renewable energy sources are witnessing costs ranging from $5,000 to $15,000 per BTC.
Riot Blockchain, a publicly traded Bitcoin mining company based in the United States, said wind and solar energy generated in Texas allow them to achieve some of the lowest mining costs.
The company said in its Q2 investor deck that they spend $8,389 to mine 1 Bitcoin.
According to Kent Halliburton, president and chief operating officer of Sazmining, a hosted Bitcoin mining provider, electricity has always been the biggest expense for mining operations.
Halliburton explained that Bitcoin miners are naturally motivated to find the lowest-cost power, and renewable energy sources often provide excess electricity that is a perfect fit for mining.
Data from the Bitcoin Mining Council indicates that 59% of mining operations are carbon-free, with this number growing at a rate of nearly 4.5% per year.
Halliburton emphasized that all of Sazmining’s mining operations in Wisconsin and Paraguay utilize excess hydroelectricity to power their activities.
Shift Toward Alternative Energy is a Long-Term Trend
The shift towards alternative energy sources appears to be a long-term trend among miners aiming for sustainable success.
Phil Harvey, the CEO of Sabre56, a crypto mining infrastructure provider, said that the company is working with dozens of mining companies to set up machines across its facilities in Wyoming and Ohio.
Sabre56’s facility in Gillette, Wyoming, known as “Bonepile,” houses nearly 2,200 mining machines powered by a combination of energy sources, including a substantial contribution from renewable energy.
The facility employs a forced-air design that facilitates cooling and exhausts hot air naturally through overpressure.
Meanwhile, OceanBit, a company specializing in renewable energy platforms using ocean thermal sources, is taking a unique approach by integrating Bitcoin mining into its ocean thermal energy power plant design.
Michael Bennett, co-founder of OceanBit, explained that ocean thermal energy is an untapped resource with vast potential for generating electricity using the temperature difference in ocean water.
By combining ocean thermal energy conversion (OTEC) with Bitcoin mining, Bennett believes they can scale the energy source globally and solve commercial challenges for both industries.
Likewise, Pennsylvanian crypto mining company Stronghold Digital Mining is utilizing coal refuse, a byproduct of coal mining, to power its operations.
The company is working with local authorities to clean up piles of waste coal that have caused water pollution and air pollution through spontaneous combustion.
Stronghold converts the coal refuse into power through specialized facilities and either supplies it to the local grid or uses it for Bitcoin mining. While this method helps clean up coal refuse, it still involves burning hydrocarbons and poses certain environmental challenges.