Jeremy Klingel, energy and utilities expert at PA Consulting, discusses bitcoin power consumption requirements and ensuring there are clean and efficient energy sources available during peak periods.
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The article notes that Tesla’s disclosure that it has purchased $1.5 billion of bitcoin has had the effect of sending the estimated electricity consumption of the cryptocurrency to new levels. The University of Cambridge’s Centre for Alternative Finance attempts to keep track of bitcoin energy consumption. While the exact consumption can never be known, a guess can be produced by tracking the total number of hashes produced by miners and looking at the efficiency of bitcoin mining equipment. The hash rate is the measuring unit of the processing power of the bitcoin network.
Jeremy said: “The obstacle that needs to be addressed is ensuring there are clean and/or efficient energy sources available for miners to tap into, especially during peak periods. With greater demand comes greater cost per KW, therefore incentivizing use of seldom-used coal or gas-fired plants that are falling out of favor from an environmental and economic perspective."
Much like electric vehicles, the crypto industry could be a new avenue for load growth across the power industry, he added. Conventional mining accounts for roughly 10% of global power consumption, compared to up to 0.5% for bitcoin mining, he said.