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The problem is, we don’t know how much energy it’s actually using.
The price of Bitcoin set a new all time high this week, crossing the $69,000 mark on Tuesday before falling back down to around $67,500 by Thursday afternoon. That almost certainly means Bitcoin’s energy usage is rising, too — although any chance of getting a precise idea of how much, even just in the U.S., may be delayed for months. Last week, the U.S. Energy Information Administration agreed to stop collecting data on crypto mining operations after a federal court in Texas put a halt on the project until the EIA goes through a more fulsome approval process.
That Bitcoin eats up a lot of power is beyond dispute. Bitcoin mining involves solving increasingly complex math problems, which at this point requires vast amounts of computing power; using outside data, the EIA estimated that crypto accounts for around 2% of the nation’s total electricity use. Both the industry’s electricity usage and how it participates in electricity markets have been subject to criticism from Democratic lawmakers, who have pushed for more information-gathering. If the price of Bitcoin continues to climb, that skepticism could ratchet up.
“There is a very direct relationship between the value of what is being mined by the miners and how much is being spent on electricity,” Alex De Vries, a cryptocurrency and energy researcher, told me.
An extensive New York Times investigation last year found that large-scale mining operations were “putting immense pressure on the power grid,” and that “their operations can create costs — including higher electricity bills and enormous carbon pollution — for everyone around them.” According to the University of Cambridge Judge Business School, Bitcoin’s energy consumption has risen about 50% in the past year, from an annualized rate of around 110 terawatt-hours a year just over 163 TWh, comparable to the electricity production of Ukraine or Pakistan. (That is, of course, an estimate, based on a model derived from the performance of mining hardware and the assumption that miners only operate with hardware that allows them to mine Bitcoin profitably.)
With all the attention on consumption and emissions, Bitcoin miners have been eager to portray themselves as, if not quite the goodies, at least not the baddies.
“The industry as a whole has a good story to tell about the energy piece,” Tom Mapes, president of a newly formed industry group called the Digital Energy Council, told me. He also told me that I “have to be realistic about it. We do use a lot of power — not to say that using power in every facet is bad.”
The feel-good Bitcoin energy story goes something like this: Crypto miners are always ready to use energy at the right price — and to shut things down at the right price, too. “We have the ability as a bulk power user of our size has the ability to flex load like no another,” Mapes said. “Datacenters cannot flex load like this. We can be built in as a tool to work within constraints of these grids.”
If a mining facility is co-located with an energy resource, it can be there to purchase power production that might otherwise be curtailed because there isn’t enough transmission capacity to get it to other customers. It can also be a buyer of first resort for a newly developed generator or it can keep an old one in business, as Bitcoin mining has with some fossil fuel generators.
“You tend to see Bitcoin miners anywhere there’s stranded energy and excess power,” said Margot Paez, a fellow at the Bitcoin Policy Institute. There are some examples of crypto mining co-located with renewables, but that does not always mean that the power they use is entirely renewable. There’s also a crypto mining operation set up at a nuclear power plant in Pennsylvania, adjacent to what will be an Amazon Web Services data center.
The main way crypto operations interact with the grid is not by supporting any particular resource, though, but rather by being flexible about when they operate. Shutting off when demand is high can be quite lucrative — sometimes even more so than the crypto mining itself.
Riot Networks, a mining company with extensive operations in Texas and a plaintiff in the EIA record collection suit, has become a flashpoint for crypto’s interaction with the electricity markets precisely because it eagerly shares data with investors and the public about its participation in programs to maintain grid stability. In August, when demand hit record highs and Texas consumers were asked to conserve energy, Riot reported $8.6 million in revenue from selling Bitcoins it had mined and $31.6 million either from selling power it had bought for a prearranged price back to the grid at the higher market price or from incentive payments for being willing to power down during demand spikes.
The company’s chief executive said that last August “was a landmark month for Riot in showcasing the benefits of our unique power strategy.” (Of the 34 large Bitcoin mining operations in the New York Times investigation, Riot was the largest and had the most fossil fuel consumption attributed to it.)
But that was then and this is now. The revenues Riot is deriving from Bitcoin mining are likely substantially greater than they were five or six months ago, as the price of Bitcoin has almost doubled. The company has told investors that it costs around $7,500 to mine a single Bitcoin, which could mean that it and other crypto miners operating strategically in the electricity market will be less willing to sell power back to the grid or turn off during demand spikes.
If you’re thinking this all sounds a lot like the conversation around demand response, well, so was I. Demand response is something climate people love to talk about. They want consumers to get paid for using less power when demand spikes, and they think it’s really neat that you can charge an electric car overnight when demand is low and want you to be able to sell that power back to the grid when demand gets high.
Putting energy consumers near renewables and other non-carbon-generating energy sources that can absorb excess power when renewable production is “too high” for the grid is something you hear about a lot with, say, hydrogen production or energy storage. Why let that energy go to waste when we could incentivize people to store it, instead?
But an electrolyzer or a battery is not just a clever way to figure out how to deal with the peaks and valleys of variable renewable energy resources like wind and solar, it’s also potentially a key component of a decarbonized energy system. It doesn’t just consume non-carbon energy, it can store and transfer carbon-free energy as well.
Crypto, on the other hand, takes energy, renewable or not, and turns it into money. It’s a greedy and flexible consumer of electricity, and there are market designs where non-carbon generators would be happy to work with such a consumer. But from the perspective of the energy system, a consumer is all it will ever be.
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Today’s conversation is with Chris Moyer of Echo Communications, a D.C.-based communications firm that focuses on defending zero- and low-carbon energy and federal investments in climate action. Moyer, a veteran communications adviser who previously worked on Capitol Hill, has some hot takes as of late about how he believes industry and political leaders have in his view failed to properly rebut attacks on solar and wind energy, in addition to the Inflation Reduction Act. On Tuesday he sent an email blast out to his listserv – which I am on – that boldly declared: “The Wind Industry’s Strategy is Failing.”
Of course after getting that email, it shouldn’t surprise readers of The Fight to hear I had to understand what he meant by that, and share it with all of you. So here goes. The following conversation has been abridged and lightly edited for clarity.
What are you referencing when you say, ‘the wind industry’s strategy is failing’?
Anyone in the climate space, in the clean energy space, the worst thing you can do is go silent and pretend that this is just going to go away. Even if it’s the president and the administration delivering the attacks, I think there’s an important strategy that’s been lacking in the wind and other sectors that I don’t think has been effective. There was a recent E&E News story that noted a couple of wind developers when asked for comment just say, “No comment.” This to me misses a really big opportunity to not get in a fight with people but talk about the benefits of wind.
Not taking advantage of milestones like ground breaking or construction starting is a missed opportunity to drive public opinion. If you lose support in public opinion, you’re going to lose support from public officials, because they largely follow public opinion.
And there’s no way that’s going to change if you don’t take the opportunities to talk about the benefits that wind can provide, in terms of good-paying local jobs or supplying more electrons to the grid. By almost any measure the strategy employed so far has not really worked.
Okay, but what is the wind industry strategy that isn’t working? What are they doing to rebut attacks on the technology, on property values, on the environment?
We’re not hearing them. We’re not hearing those arguments.
You can’t let criticisms go unanswered.It would better serve the industry and these companies to push back against criticisms. It’s not like you can’t anticipate what they are. And what do you have to lose? You’re in the worst position of any energy sector in this political moment. It would be nice to see some fight and sharp campaign skills and strategic effort in terms of communication. And there’s no strategic value from what I can tell in [being silent].
I understand not wanting to pick a fight with folks who hold your fate in their hands, but there’s a way to thread a needle that isn’t antagonizing anybody but also making sure the facts have been heard. And that’s been missing.
You’d specifically said the industry should stop ‘being paralyzed in fear and start going on offense.’ What does that look like to you?
Taking every opportunity to get your message out there. The lowest hanging fruit is when a reporter comes and asks you, What do you think about this criticism? You should definitely reply. It’s lifting up third-party voices that are benefiting from a specific project, talking about the economic impacts more broadly, talking about the benefits to the grid.
There’s a whole number of tools in the toolbox to put to use but the toolboxes remain shut thus far. Targeted paid media, elevating the different voices and communities that are going to resonate with different legislators, and certainly the facts are helpful. Also having materials prepared, like validators and frequently asked questions and answers.
You’re trying to win. You’re trying to get your project to be successful and deliver jobs and tax revenue. And I think it would be wise for companies to look at the playbooks of electoral campaigns, because there’s lots of tools that campaigns use.
How do renewable energy developers get around the problem of partisanship? How do you get outta that through a campaign approach?
These projects are decided locally. It’s deciding who the decision-makers are and not just letting opponents who are getting talking points through right-wing media show up and reiterate these talking points. Oftentimes, there’s no one on the pro side even showing up at all, and it makes it really easy for city councils to oppose projects. They’re losing by forfeit. We can’t keep doing that.
And more on this week’s most important conflicts around renewable energy.
1. Chautauqua, New York – More rural New York towns are banning renewable energy.
2. Virginia Beach, Virginia – Dominion Energy’s Coastal Virginia offshore wind project will learn its fate under the Trump administration by this fall, after a federal judge ruled that the Justice Department must come to a decision on how it’ll handle a court challenge against its permits by September.
3. Bedford County, Pennsylvania – Arena Renewables is trying to thread a needle through development in one of the riskiest Pennsylvania counties for development, with an agriculture-fueled opposition risk score of 89.
4. Knox County, Ohio – The Ohio Power Siting Board has given the green light to Open Road Renewables’ much-watched Frasier Solar project.
5. Clay County, Missouri – We’ll find out next week if rural Missouri can still take it easy on a large solar project.
6. Clark County, Nevada – President Trump’s Bureau of Land Management has pushed back the permitting process for EDF Renewables’ Bonanza solar project by at least two months and possibly longer .
7. Klickitat County, Washington – Washington State has now formally overridden local opposition to Cypress Creek’s Carriger solar project after teeing up the decision in May.
It’s governor versus secretary of state, with the fate of the local clean energy industry hanging in the balance.
I’m seeing signs that the fight over a hydrogen project in Wyoming is fracturing the state’s Republican political leadership over wind energy, threatening to trigger a war over the future of the sector in a historically friendly state for development.
At issue is the Pronghorn Clean Energy hydrogen project, proposed in the small town of Glenrock in rural Converse County, which would receive power from one wind farm nearby and another in neighboring Niobrara County. If completed, Pronghorn is expected to produce “green” hydrogen that would be transported to airports for commercial use in jet fuel. It is backed by a consortium of U.S. and international companies including Acconia and Nordex.
One can guess why investors thought this rural Wyoming expanse would be an easier place to build: it’s an energy community situated in the middle of the Powder River Basin and the state’s Republican governor Mark Gordon has supported wind projects in the state publicly, not just with rhetoric but votes in favor of them on the State Board of Land Commissioners.
Wind is also often proposed on private land in Wyoming, which is supposed to make things easier. You may remember the Lucky Star and Twin Rivers wind farms, a pair of projects whose progress I’ve watched like a hawk because they’re tied to the future of wind permitting at the national level. As we first reported, the Trump administration is proceeding with potentially approving the transmission line for Lucky Star, a project that would be sited entirely on private land, and Twin Rivers received its final environmental review in the last days of the Biden administration, making it difficult for anti-wind advocates to curtail.
Unlike those projects, Pronghorn has created a fork in the road for wind in Wyoming. It’s because the people in its host community don’t seem to want it, the wind projects were on state land, and there’s politics at play.
Despite being considered an energy community, Converse and Niobrara are both areas with especially high opposition risk, according to Heatmap Pro, largely due to its low support for renewable energy, its demographics, and concerns about impacts to the local ranching economy. After Gordon and other members of the state land use board approved two wind facilities for the hydrogen project, a rancher living nearby sued the board with public support from the mayor of Glenrock and the area’s legislators in the statehouse. A member of the Converse County zoning board even published a “manifesto” against the project, detailing local concerns that are myriad and rooted in fears of overburden, ranging from water use and property value woes to a general resentment toward an overall rise in wind turbines across the county and state.
What’s probably most concerning to wind supporters is that this local fight is bubbling up into a statewide political fracture between Gordon and his secretary of state Chuck Gray, who is believed to be a future candidate for governor. Grey was the lone dissenting vote against the two wind projects for Pronghorn, saying he did not support the projects because they would be assisted by federal tax credits Trump is trying to gut. Gray then took to mocking the governor on social media for his stance on wind while posting photos of broken wind turbines. Gordon wound up responding to his secretary of state accusing him of being the “only member of the state land board to vote against individual property rights and Wyoming schools.”
“That is his prerogative to be sure, but it demonstrates his disregard for the duties of his office and a determination to impose his personal preferences on others, no matter the cost,” Gordon stated.
I’ve been reaching out to Pronghorn and its founder Paul Martin to try and chat about what’s happening in Wyoming. I haven’t heard back, and if I do I’ll gladly follow this story up, but there’s a sign here of an issue in Wyoming whether Pronghorn gets built or not – areas of Wyoming may be on the verge of a breaking point on wind energy.
I heard about the Pronghorn project in conversations this week with folks who work on wind permitting issues in Wyoming and learned that the Gordon-Gray feud is emblematic of how the wind industry’s growth in the state is making local officials more wary of greenlighting projects. Whether Gordon’s position on private property wins out over Gray taking up the mantle of the anti-wind conservative critic may be the touchstone for the future of local planning decisions, too.
At least, that’s the sense I got talking to Sue Jones, a commissioner in Carbon County, directly southwest of Converse County. Jones admits she personally doesn’t care for wind farms and that it’s “no secret with the county, or the developers.” But so far, she hasn’t voted that way as a commissioner.
“If they meet all our rules and regs, then I’ve voted to give them a permit,” she told me. “You can’t just say no to anything. It’s a good thing that we value private property rights.”
Jones said the problem in Carbon County and other areas of Wyoming is “saturation level.” Areas of the state where only a handful of landowners hold thousands of acres? That’s probably fine for wind projects because there’s a low likelihood of a neighbor or two having a genuine grievance. But as wind has grown into population-denser areas of the state the dissent is becoming more frequent.
My gut feeling is that, as we’ve seen in many other instances, this resentment will bubble up and manifest as sweeping reform – unless the wind industry is able to properly address these growing concerns head on.