When you think about renewable energy production, the two most visible proponents are wind and photovoltaic (solar) energy. Especially these two technologies have one problem in common: No one can predict how much electricity will be produced, even just a few minutes away.

This makes alternative energy sources mandatory as a means of compensation. Very few customers would accept if their computer might run, or not run, during the day, depending on how much wind a nearby farm is experiencing.

At the same time the amount of electricity produced is rarely big enough to warrant the transformation to the high voltages (like 440 kV) necessary to ensure long distance transport. Which means most of the green electricity produced needs to be consumed in its’ vicinty.

So while it’s certainly great that we have a growing supply of renewable energy, from the viewpoint of an electricity provider all that counts is the base amount that will always be produced no matter what. The rest has to either be bought or produced via hydropower (somewhat more stable, but seasonal), biogas, nuclear power or gas or even coal fueled power plants.

Sometimes extreme measures have to be taken, to consume the inflated energy supply, when the renewable energy farms are churning out at maximum power (imagine a solar power plant at 2pm on a summer day). Negative electricity prices,pumping water up hydro power plants for later storage, and even running machines without producing anything, or boiling water just for later cooling are reported.

And here is why this means renewables are a great match for crypto currency mining: Crypto mining can be co-located with renewable electricity production sites, as long as a stable internet connection is possible. Thanks to the widespread proliferation of LTE/4G networks more and more areas of the world offer this possibility.  Locating mining farms close to electricity production means the power does not have to pass through the distribution network of the local utility company, which typically charges a small, but not insignifcant, amount per kWh for using its network.

This means rock bottom electricity prices for the miners. Prices as low as USD 3ct/kWh are possible here. Electricity cost is the biggest obstacle to profitable crypto currency mining. Fluctuating supply can partly be buffered with batteries or inexpensive UPSs to keep network infrastructure and control servers alive at all times. The miners are then switched on and off as energy supply fluctuates. This is not ideal for mining, where miners want to have their computers on all the time. But it would be a great way to utilise every drop of energy a wind or solar farm produces. With a little bit of buffering, miners can be switched to standby or activated rapidly meaning no opportunity to mine gets lost.

Crypto currencies like bitcoinClean already incentivise miners that use green electricity sources. If others follow the lead of this particular coin, co-locating mining farms with renewable electricity production sites will make a lot of business sense, in addition to being the sensible thing to do.

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