Six Ways Bitcoin Is Transforming Utilities – Bitcoin Magazine


This is an opinion piece by Dan Luddy, a mechanical engineer and energy consultant with 15 years of experience designing high performance buildings.

The energy we use to heat our buildings is a major contributor to global greenhouse gas emissions and is central to decarbonization initiatives. By reusing waste heat, Bitcoin mining could be cost-effectively integrated into commercial and residential buildings and be a catalyst for electrification retrofits that would improve building performance and reduce global carbon emissions.

Reduction of building emissions

A significant portion of building energy consumption is in the form of heat, most of which comes from the combustion of natural gas.

Emissions associated with commercial and residential buildings account for more than 30% of greenhouse gas emissions in the United States. Source: 2019 EPA Greenhouse Gas Inventory

Replacing gas, electric resistance heating is a simple technology and eliminates on-site emissions. But it’s 3 to 5 times more Dear than gas at average utility rates and is as clean as the power plant that produces the electricity.

A more efficient solution is the heat pump, which absorbs and compresses heat from outside air, water or a geothermal well. Heat pumps are a much more efficient option, so operating costs are comparable to gas. However, most heat pumps need an electrical backup in very cold weather (

Removing greenhouse gas emissions from the built environment faces a financial hurdle: new equipment, new infrastructure, and minimal return on operating cost savings. This financial challenge is where bitcoin mining could change the equation by providing heat as a byproduct.

Electrify with Bitcoin Mining

Almost all of the power consumed by a mining ASIC is converted into heat, which must be removed from the machine. Air-cooled ASICs have fans that draw heat away. This can be used to heat ambient air, but is difficult to compress, transport, or store for other uses.

Fluid-cooled (water or liquid dielectric) ASICs present a better opportunity for integration with building systems. By connecting fluid-cooled ASICs to hot water systems with piping, a pump, and a heat exchanger, mining provides a source of hot water that can be used within a building. Additionally, ASICs can operate 80% faster and 5% more efficiently than air-cooled equipment.

Fluid-cooled ASICs consume about 5% less power than air-cooled ASICs for the same TH.  Additionally, fluid cooling allows for more efficient thermal energy capture to offset the energy cost of mining.  Source: Author

Fluid-cooled ASICs consume about 5% less power than air-cooled ASICs for the same TH. Additionally, fluid cooling allows for more efficient thermal energy capture to offset the energy cost of mining. Source: Author

The hot water generated from Bitcoin mining can be used for a number of uses in different building typologies, including space heating, domestic hot water, swimming pool heating, and industrial uses. Many buildings have both heavy electrical service and year-round hot water needs, including hotels, multi-family dwellings, laboratories, university buildings, manufacturing facilities, and more.

When used to replace gas heating, the reused waste heat can offset around 33% of mining costs. Since water-cooled equipment operates more efficiently, miners can operate profitably even at retail electricity rates by operating faster and selling excess heat. In addition, the building then eliminates on-site fossil fuel emissions associated with heating.

Energy cost per TH/S

Reusing heat in the building can recover a significant portion of the energy costs of mining. The table above assumes an average electricity rate of $0.10/kWh. Source: Author

Solar integration

The reuse of waste heat financially justifies the integration of bitcoin mining into building systems, but it would be more interesting to consider the integration of on-site solar photovoltaic (PV) generation. Photovoltaic panels on rooftops or integrated into parking canopies have come down significantly in price over the past decade, leading to higher levels of adoption. Depending on the utility provider and the connection, the electricity generated by the photovoltaic panels in excess of the building’s demand can either be sold back to the grid via net metering, stored on site or, at worst, wasted.

Energy consumption and photovoltaic production

On-site solar PV installations can produce excess power during peak conditions. While some utilities allow consumers to sell electricity back to the grid (net metering), using that electricity for Bitcoin mining may be more profitable depending on market conditions. Source: Author

An on-site Bitcoin mining system presents another option for utilizing excess solar PV generation. Depending on the difficulty adjustment and utility net metering agreement, using excess energy to mine bitcoin may be more profitable than selling it back to the grid. This additional revenue option incentivizes building owners to maximize on-site photovoltaic panels, generating additional capacity and reducing dependence on electricity generated from fossil fuels.

Response to request

Many utilities offer demand response programs to reduce excess demand during times when the network reaches maximum capacity, such as during a heat wave. In many of these programs, building owners can receive incentives or payments from the utility to modify its operations during peak conditions to reduce a certain percentage of load and stabilize the network when needed. .

A building modified to work with a bitcoin mining system can respond favorably within these programs. Mining rigs can be shut down almost instantly and demonstrate a significant reduction in peak demand, helping to shift electrical resources to more essential resources for life and safety. Participation in these programs can generate additional revenue, primarily by making payments to the building for not mine at specific times.

Decentralization

Scalability is one of the fascinating features of bitcoin mining. Depending on the price of electricity, potential for heat reuse, and access to infrastructure, single ASICs can operate cost-competitively with large-scale miners with massive data centers. Commercial and multi-family buildings offer a mining size that falls in the middle of this range. There are thousands of buildings around the world where mining could be successfully integrated, which would expand the bitcoin network and further distribute hashing power.

Potentially, there could be a day when bitcoin miners not only secure the grid, but also provide hot water for affordable housing, heat for schools and offices, and absorb excess solar power. roofs.

Future Scenario – Low Carbon Housing with Bitcoin Mining

Consider an apartment complex that chose to install a fluid-cooled unit in the basement in the room that once housed a gas boiler. The modernization of the electrical system and the mining equipment were financed and installed by a mining operator who will share the revenues with the owner of the building.

The heat from the mine provides hot water for showers, sinks, dishwashers and washing machines. In winter, miners work overtime to heat the apartments. During peak summer days, a newly installed rooftop photovoltaic system sends excess electricity back to the miners to run them at low cost. The building participates in local grid demand response programs and shuts down mining as needed to meet peak conditions and gain additional revenue.

As a result, the landlord has additional capital that can be reinvested in the building to improve maintenance, increase property value, and improve the tenant experience of the building, while reducing carbon emissions. This same approach could be extended and implemented in commercial and residential portfolios, presenting a triple win for bitcoin, buildings and the environment.

This is a guest post by Dan Luddy. The opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.

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