- Introduction
The Paris Agreement on climate change and the popularization of cryptocurrency mining have brought the topic of renewable energy to the mainstream media in recent years. My academic and research background has focused primarily on renewable energy engineering and one of the most important topics in this field focuses on the scalability of renewable energy solutions. In this post, I will be presenting some of my background knowledge and perspectives regarding the current state of renewable solutions for crypto mining; some of the inherent issues with renewable energy systems; and some possible technological innovations that could improve the utility of renewable energy systems for the crypto mining industry.
- Current Solutions for Powering Crypto Mining
The need for a 'greener' crypto mining power source was made clear after several prominent figures made statements regarding the use of renewable energy as a potential pre-requisite for providing monetary or institutional support. Renewable energy is a relatively new concept when compared to conventional energy sources. Many scientists and engineers over the past decade have pointed out that the world's fossil fuel reserves are finite. These resources are being depleted at a much higher rate due to rapid population growth and industrialization. As a result, they focused their efforts to find an infinite source of energy to power our future towns and cities. The current sources of renewable energy such as the light from the sun or the movement of water are not exactly "limitless", but they have been projected to provide power for millions of years.
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Solar Panels on Snow With Windmill Under Clear Day Sky, Pexels / Pixabay
Three of the most notable renewable energy technologies that have been considered for powering crypto mining farms are solar, wind, and hydro power. Solar power focuses on using semi-conductor based cells to harness the energy of photons coming from the sun and converting this energy into electricity. Wind power focuses on harnessing the rotational kinetic energy of the turbine blades due to the force of wind molecules on the blade surfaces. It converts this rotational energy to electricity using an electric generator. Similar to wind energy, hydro power focuses on converting the forces from fluid flow into rotational energy using underwater turbine blades. This energy is then converted into electricity using a generator. As of late, geothermal energy has also gained more recognition for powering crypto. This involves the extraction of hot underground liquid to power a steam-based, electric generator. The cooled liquid is returned underground and the process repeats.
- Inherent Issues with Utilizing Renewable Energy for Crypto Mining
Crypto mining is an intensive process that involves the use of many computing rigs with high hash rates which ultimately support the smooth operation of crypto transactions on the blockchain. As network demand for a certain mining-based cryptocurrency increases, the need for new rigs also increases. These mining rigs use massive amounts of power in order to achieve these high hash rates. Adding hundreds or even thousands of mining rigs (i.e., high-demand electric loads) to the electric grid would place a great, long-term burden on fossil fuel-based energy generation systems which already have a reputation for producing generous amounts of pollution. This has probably been the main reason why renewable energy has been used to maintain the reliability of the energy grid. However, the widespread use of renewable energy may still be a distant possibility because of inherent issues with efficiency, dispatchability, reliability and cost-effectiveness. All of these issues ultimately affect the scalability of renewable energy systems.
Efficiency
All forms of renewable energy require an energy conversion device which converts a given form of energy (e.g. kinetic, radiant heat, light, etc...) to electricity. These devices do not have perfect efficiencies due to inherent limitations within the materials used to build them. For example, solar cells within a photovoltaic panel convert photon energy into electricity. These solar cells have a set efficiency rating which depends upon the type of material used to construct the cell. Current photovoltaic panel technologies sold in the market have a solar energy conversion efficiency of approximately 10 - 15 percent. High quality solar panels with energy conversion efficiencies of above 20 percent exist, but the market price range for these technologies also increases. The main issue with traditional solar cells is the technique used to design the cells. Designers of these cells have made every attempt to expose as much of the cell to light as possible. However, the wires that transfer the converted energy out of the solar panel also block part of the incoming light to cell itself which inevitably reduces its efficiency by a significant amount.
Generator-based renewable energy capture devices have inherent limitations where there are moving parts. For instance, wind turbines require a significant amount of force from the incoming wind in order to move and begin generating power. This is generally referred to as the cut-in wind speed or the speed required for a wind turbine to generate the nominal (rated) power output. The cut-in wind speed can vary depending on the type of wind turbine that is used. Energy conversion efficiencies in wind energy capture are primarily limited by the friction factor within the gearbox and generator which separate the low and high speed shafts. Thus, at very high wind speeds, manual or automatic braking is necessary to prevent excessive heat buildup and wear on turbine components. The upper limit of a wind turbine's nominal performance is otherwise known as the cut-off wind speed.
Dispatchability
Demand for electricity is never constant. Various factors such as the weather, special events, emergency situations, and changes in consumer behavior can affect electricity usage. One factor or a combination of factors can place excessive burden on the electric grid. As a result, electricity providers have a network of energy sources which can provide electricity on demand. Renewable energy systems still need to address certain issues in order to reach the point where it can be fully dispatchable.
For instance, if we consider a power system that only sources its energy from direct drive solar (PV) systems, the solar panels will only be able to produce power during daylight hours, assuming ideal solar conditions. Their most optimal performance only occurs during peak sun hours. Ideal solar radiation during peak sun hours amounts to 1000 Watts per square meter of a PV panel. Under these assumptions, any power demand from consumers during non-peak hours will not be fulfilled completely due to the non-optimal power output from the PV panels.
Wind power is another option for sourcing energy. The largest portion of wind energy or peak wind power is typically harnessed during the evening hours. Thus, a combination of wind and solar energy could theoretically provide power to consumers 24 hours per day. From a practical perspective, we would need to account for the potential loss of harvested energy due to environmental conditions. Thus, a wind plus solar (PV) system must have a set number of days of autonomy (DoA) in order to sustain load operation under non-favorable conditions. The DoA value ultimately depends on type of load being serviced as well as careful observation of location-based climate patterns. Considering the variability of weather conditions, there is a possibility that a certain scenario may arise which will exceed the DoA capacity of a solar, wind, and battery system. The only system currently capable of total dispatchability with a high resource-to-power ratio is hydro power. However, hydro is strictly limited to areas were there is a sufficient volume and flow rate to produce bulk power.
Reliability
The ultimate goal of all electricity providers is to provide power to all loads. In other words, when you activate your light switch at home, you expect the light to turn on, and it should turn on - every time. Due to factors relating to demand-response, environmental & climate conditions, and the dispatchability of power systems, a practical electric grid can never have one-hundred percent reliability. However, power providers always seek solutions to reduce the probability that unexpected events can affect grid stability and load servicing.
Similarly, the reliability of renewable systems is dependent upon load demand, component conditions, and resource availability. For example, a direct drive solar (PV) power system solely depends on the radiant light from the sun to operate. When the intensity of incident light on the solar cell surface is dampened by clouds, rain, or other foreign objects, less power is produced. This reduces the ability of loads to operate within their optimal range.
Cost-Effectiveness
All of the current renewable systems could be upgraded using more powerful and energy efficient components. However, a new issue arises when the cost of a set of highly advanced components interferes with the allocated budget of a renewable project. Thus, an energy developer may eventually have to settle for a less efficient system which can impact long-term power production and costs. The following example below could provide more insight into this issue.
One town has requested a regional power company to provide remote (off-grid) power to their area. There are multiple plots of land that are perfect for installing large-scale PV systems. The power company requires a solar energy producer to provide 20 MW of electricity. The cost for a large plot of land is high. Thus, in order to cut costs, a renewable developer may choose to use a system that uses inferior (cost-saving) Poly-Si solar panels that just meets the 20 MW requirement. The PV panels in this system cover the distance of multiple fields. More efficient (but high-cost) PV panels could provide the same amount of power in half the space. Over the next ten years, the town's population and electric demand increases three-fold which places a higher burden on the inefficient PV system. Based on this example, we can see that instead of using a system that could have lasted for the next 20 years, the developer had chosen a system with a 10-year lifespan in order to meet the cost requirements of the solar development project. Now, the town would have to purchase a brand new PV system to meet the higher energy demand which results in additional costs.
- Possible Innovations and Improvements to Support Crypto Mining Rigs
In order to address all of the major issues surrounding the development and application of renewable systems, various institutions around the world have decided to focus on specific system components that could be improved. These improvements will collectively form the next generation of renewable energy collection, conversion, and distribution systems that could power the future of crypto mining rigs. In particular, there have been a wide array of innovations that have been made within the solar and energy storage sectors.
Solar energy has always focused on two areas - energy collection through heat (using CST or Concentrated Solar Technologies) and energy collection through light (using PV or Photovoltaic technologies). In the realm of PV systems, scientists have focused on selecting, tuning, and combining different semi-conductors to accept a wider range of light wavelengths. This could essentially increase the amount of light that a solar cell can convert into electricity. Some researchers aim to design a standalone semiconductor that is ultra-efficient. One of those materials that has seen widespread popularity is perovskite. Depending on the quality and application, a perovskite-based solar cell can be many times more efficient than a standard polycrystalline silicon (or Poly-Si) solar cell. Other researchers look to achieve multiple objectives at once. For example, there have been recent innovations where liquid cooling systems could capture the heat from PV systems and convert the thermal energy to electricity. The reduced heat in the electronic and solar cell surfaces could drastically increase the efficiency of a PV system.
The energy storage industry has also seen many innovations and improvements over the past few years. Firms such as Tesla and Ford are looking to obtain better energy storage technologies for their vehicles. The competitive nature of the technology industry is the main driver behind innovation. Some of the recent developments have been very remarkable. For instance, the change from liquid to high quality solid-state components within portable batteries have increased the efficiency and potency of electrochemical reactions for providing power to loads. One of the most optimal solid-state battery types for small to medium-scale PV systems has been Lithium-Iron Phosphate (or Li-Po) batteries which have high current and power to weight ratios.
One of the most important objectives of the energy industry is to maintain the balance between power stability, reliability, and operational costs. As a practical component, high-power energy storage technologies have risen in popularity as a potential answer to keep this balance. Energy storage technologies are currently categorized under UPS (uninterruptible power supplies), Grid T&D (or Grid Transmission and Distribution) support, and BPM (or Bulk Power Management) systems. Short-term energy storage devices that fall under the UPS category include, but are not limited to, lithium-ion (or Li-Ion) batteries, supercapacitors, and flywheels. The T&D category includes advanced flow batteries, ultra high-power supercapacitors, and SMES (or Superconducting Magnetic Energy Storage). Currently, the only two forms of energy storage that are worthy of providing long-term power are pumped hydro and CAES (or Compressed Air Energy Storage).
- Conclusions
In the future, energy storage technologies will continue to be an integral part of renewable energy systems because they have the capacity to meet load demand even when a renewable energy system is not operating under optimal conditions. Thus, increasing the power stability of renewable systems will ultimately make them more reliable, dispatchable, and scalable for crypto mining applications. Current developments have focused on creating long-term energy storage solutions for both portable and stationary use. Cost-effectiveness is also a challenge due to the expenses involved in the production of advanced components. Cheaper sourcing of materials and more efficient production processes may eventually reduce wholesale prices for renewable energy system components, increase demand for higher-quality systems, and further promote their widespread use in the long-run.
Considering the wide variety of important mining-based cryptocurrencies in the market, the amount of mining rig systems (or high-demand electrical loads) could possibly increase significantly in the next decade. Therefore, innovations in renewable energy systems and energy storage devices will have to meet the rising power demand for the next generation of companies in the crypto mining sector.
Thank you very much for reading my post! Before you go, I would like to mention that Hive is a great platform to provide your thoughts and opinions on various topics. If you are looking for another great social media place to casually discuss crypto-related topics such as this one, you are also welcome to visit Torum - a SocialFi, crypto-focused, metaverse that offers a great community of like-minded individuals who support the future of crypto.
- Informational Links
Below, I've included web links to useful information which could provide an introductory background behind renewable energy systems, energy storage, and cryptocurrency mining.
Solar Energy: https://www.austincc.edu/green/assets/seco-intro-to-pv.pdf
Wind Energy: https://www.energy.gov/eere/wind/how-do-wind-turbines-work
Hydro Power: https://www.usbr.gov/power/edu/pamphlet.pdf
Energy Storage: https://css.umich.edu/factsheets/us-grid-energy-storage-factsheet
Bitcoin Mining: https://www.investopedia.com/tech/how-does-bitcoin-mining-work/
The Paris Agreement: https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement
Example of Corporate Support for Green Cryptocurrency Mining: https://www.bloomberg.com/news/articles/2021-07-21/tesla-may-accept-bitcoin-once-crypto-mining-makes-green-shift