CEO and Chairman of Bitcoin miner Marathon Digital, Fred Thiel, has called for grid operators and renewable asset owners to use Bitcoin mining to manage grid congestion due to excess energy. Thiel expressed this view in response to a recent report about excess energy being wasted by wind farms in the UK.
According to Bloomberg‘s report, the UK is paying £1 billion ($1.3 billion) in congestion costs to wind farms to turn off their operations because the grid cannot handle the excess output from the wind farms. According to reports, the UK has significantly increased its wind power generation capacity over the last few years, with its offshore wind fleet now up by 50% over the last five years and projected to double in the next five.
Despite the massive increase in capacity meant to increase Britain’s reliance on renewable energy, its grid capacity has not expanded to match this supply. This has led to congestion issues, forcing the utility provider to pay some plants to turn off while paying others to turn on.
Interestingly, the shutoff of wind farms, usually offshore and far away from cities, has invariably led to the turning on of gas plants closer to the demand centers. This is not the first time the UK operator will pay congestion costs, with the 1 billion this year even below the amount it paid in 2022.
Experts say Bitcoin mining with excess energy will prevent waste
Meanwhile, Thiel has criticized the energy waste and congestion costs, noting that Bitcoin mining could solve this problem. According to Thiel, adding Bitcoin mining is one of the ways to make renewable energy more economically viable.
He observed that the IEA estimates that it would cost over $26 trillion to upgrade the grid for renewable energy transition by 2050, and consumers will be the ones to foot all these costs. However, Bitcoin mining could reduce the economic burden on these rate-payers.
He said:
“Grid operators and renewable asset owners must realize that adding large despatchable loads such as #bitcoin mining behind the meter at renewable energy sites is the only way to eliminate grid congestion and wasted energy.”
The mining executive added that Marathon Digital optimally monetized its energy through Bitcoin mining. Marathon is one of the leading publicly listed mining companies and recently acquired Bitcoin using proceeds from convertible notes. Meanwhile, VanEck of digital assets research Matthew Sigel also criticized what he termed a “waste of power,” noting that all the excess energy could be used to mine Bitcoin.
Bitcoin mining gains adoption for managing grid capacity
Despite UK energy providers’ failure to consider Bitcoin mining for managing grid congestion, many other entities are exploring it for that purpose. In Switzerland, the Bern region recently approved a proposal to evaluate how Bitcoin mining can stabilize the power grid by utilizing surplus energy.
The Grand Council of Bern, the region’s parliament, voted 85 – 46 on the proposal, confirming the broad support for the idea within the region. With the approval, the government will now assess whether to integrate Bitcoin mining into its energy strategy.
Meanwhile, Deutsche Telekom is also piloting a Bitcoin mining scheme in Germany focused on using surplus renewable energy to power Bitcoin mining operations. The pilot program intends to lay the groundwork for the large-scale implementation of Bitcoin mining for load balancing within the energy grid.
With more entities exploring the use of Bitcoin mining for managing renewable energy fluctuations, the industry might have found a new use case for countries pursuing renewable energy alternatives for power generation.
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