It is essential to grasp that transitioning into renewable energy can be more complicated than it appears. But, recently, one Bitcoin mining company in Australia believes the industry can help.
It is no longer news that Bitcoin is frequently criticized for its environmental impact. However, regardless of this claim, some individuals within the industry still believe that mining the universe's biggest cryptocurrency (BTC) may assist countries like Australia in cracking one of the stumbling blocks to renewable energy adoption.
We know Australia has abundant renewable energy sources, particularly solar. Nonetheless, it is still constrained by a gap linking peak consumption hours and peak generation of green energy. However, Sally Torgoman, KPMG Australia's energy sector partner, disclosed that "There's a chance for brilliant demand to absorb that additional production." She and other experts trust that Bitcoin mining possibly will be a solution to facilitate energy consumption at a specific time of the day, bring about a more certain demand environment, and sort out the price inconsistency between day and evening electricity rates.
As stated by economists, a more stable electricity rating is required to incentivize the construction of renewable energy plants economically.
"We have a demand-supply obstacle [in the electricity system] in that there are lots of prospects for renewables, but since thermal coal plants retreat, there will be times of the day when there is an excess of energy, especially daytime energy," Torgoman added.
Regardless of a high per capita roof solar installation rate across Australia, the price at which homeowners can sell power back to the grid has been falling in recent years. This problem has intensified because coal-fired thermal power plants run at a constant rate on a 24-hour cycle, worsening the midday electrical capacity oversupply.
Furthermore, Nasdaq-listed Bitcoin mining, according to Iris Energy, might be one solution to address the power shortage and aid Australia in transitioning to renewable energy. "If we set up [power demand] that addresses that, out of the blue there is a market rate signal to build out additional renewables to withdraw fossil fuel production legacy," told Daniel Roberts, Co-founder and CEO of Iris Energy, to Forkast, by phone from the company's control center in New South Wales. Iris Energy, which Roberts and his brother Will formed in 2018, is a joint business that draws on their individual energy structure and finance skills. The firm has a 30MW data center in Canal Flats, British Columbia, and many sites in Australia under development.
According to Roberts, the energy used to maintain Bitcoin's blockchain record might help establish a market pricing point for locally produced renewable energy and promote additional investment.
Roberts said the energy consumed in maintaining Bitcoin's blockchain ledger could help create a market price point for locally generated renewable energy and inspire new investment in the sector.
He explained, "You cannot withdraw that legacy fossil fuel power because there aren't sufficient renewables in the mix, and there aren't plentiful renewables in the mix because there isn't a market value signal."
Iris Energy only mines Bitcoin as part of its smart demand strategy when excess renewable energy is available. So, for instance, if weather causes a spike in consumer demand, the corporation can swiftly shut down its Bitcoin mining activities.
Roberts added, "We never want to be charged of seizing power away from mothers and fathers, or of driving up power bills for general business, whether or not it's renewable."
In other industries, experts warned that focusing on energy consumption was not the best long-term strategy for growing Australia's renewable energy sector.
David Green, Co-founder of Teho, an Australian renewable energy company, said, "It could be a case of reality and theory differing slightly." "What we truly need is storage; it is the only way we are going to sort out our grid in the long run." Green further expressed his uncertainty on scaling Bitcoin mining activities enough to significantly affect Australia's domestic renewable sector.
Others warned that the demand model had unknown economic dangers that might render Bitcoin mining unprofitable.
According to Rajkumar Buyya, Professor of Computing and Information Systems at the University of Melbourne, the need to shut down mining operations during peak consumer hours would have an adverse effect on the bottom line for Bitcoin miners, who must upgrade their hardware every three to four years.