Fastest Growing Nuclear and Gas Power Sources for Bitcoin Mining: Data

The power mix of Bitcoin (BTC) has changed dramatically over the past few years, with nuclear power and natural gas becoming the fastest growing energy sources powering Bitcoin mining, according to new data.

The Cambridge Center for Alternative Finance (CCAF) on Tuesday released a major update to its data source dedicated to Bitcoin mining, the Cambridge Bitcoin Electricity Consumption Index (CBECI).

According to Cambridge data, fossil fuels like coal and natural gas accounted for nearly two-thirds of Bitcoin’s total power mix in January 2022, or more than 62%. Thus, the share of renewable energies in BTC’s energy mix amounts to 38%.

The new study suggests that coal alone accounted for almost 37% of Bitcoin’s total electricity consumption at the start of 2022, becoming the largest single energy source for BTC mining. Among the sustainable energy sources, hydroelectricity was found to be the most important resource, with a share of around 15%.

Although Bitcoin mining relies significantly on coal and hydropower, the share of these energy sources in BTC’s total energy mix has declined over the past few years. In 2020, coal power powered 40% of global BTC mining. The share of hydroelectricity has more than halved between 2020 and 2021, from 34% to 15%.

Electric mix of Bitcoin mining from 2019 to 2022. Source: CCAF

In contrast, the role of natural gas and nuclear power in Bitcoin mining has grown significantly over the past couple of years. The share of gas in BTC’s electricity mix has increased from around 13% in 2020 to 23% in 2021, while the share of nuclear has increased from 4% in 2021 to almost 9% in 2022.

According to Cambridge analysts, relocations of Chinese miners were a major reason for the sharp fluctuations in Bitcoin’s energy mix in 2020 and 2021. China’s crackdown on crypto in 2021 and associated miner migration led to a decline significant share of hydropower in BTC energy. to mix together. As previously reported, Chinese authorities shut down a number of hydropower-powered crypto-mining farms in 2021.

“The Chinese government’s ban on cryptocurrency mining and the resulting shift of Bitcoin mining activity to other countries has had a negative impact on Bitcoin’s environmental footprint,” suggests the study.

Analysts have also pointed out that BTC’s power mix varies wildly by region. Countries like Kazakhstan are still heavily dependent on fossil fuels, while in countries like Sweden the share of sustainable energy sources in electricity generation is around 98%.

The rise of nuclear and gas power in Bitcoin’s power mix would reflect the “shift of mining power to the United States”, the analysts said. According to the United States Energy Information Administration, most of the country’s electricity was generated by natural gas, which accounted for more than 38% of the country’s total electricity production. Coal and nuclear power accounted for 22% and 19% respectively.

Among other information related to the latest CBECI update, the study also revealed that greenhouse gas (GHG) emissions associated with BTC mining amounted to 48 million tonnes of carbon dioxide equivalent. emissions (MTCO2e) as of September 21, 2022. This is 14% lower than estimated GHG emissions in 2021. According to the study’s estimates, current levels of Bitcoin-related GHG emissions represent approximately 0.1% of global GHG emissions.

Combining all the previously mentioned results, the index estimates that as of mid-September, approximately 199.6 MtCO2e can be attributed to the Bitcoin network since its inception. Analysts pointed out that around 92% of all shows have happened since 2018.

Total Bitcoin-related greenhouse gas emissions as of mid-September 2022. Source: CCAF

As previously reported, CCAF has been working on CBECI as part of its multi-year research initiative known as the Cambridge Digital Assets Program (CDAP). CDAP’s institutional collaborators include financial institutions such as British International Investment, Dubai International Financial Centre, Accenture, EY, Fidelity, Mastercard, Visa and others.

Related: Bitcoin could become a zero-emission network: Report

The new CDAP findings differ significantly from data from the Bitcoin Mining Council (BMC), which in July estimated the share of sustainable sources in Bitcoin’s power mix at almost 60%.

“That doesn’t include nuclear or fossil fuels, so you can deduce that around 30-40% of the industry is powered by fossil fuels,” Ben Gagnon, mining director at Bitfarms, told Reuters. Cointelegraph in August.

According to CBECI project manager Alexander Neumueller, CDAP’s approach is different from that of the Bitcoin Mining Council when it comes to estimating Bitcoin’s power mix.

“We use information from our mining map to see where Bitcoin miners are located, then look at the power mix of the country, state or province. As I understand it, the Bitcoin Mining Council asks its members to self-report this data in a survey,” Neumueller said. However, he mentioned that there are still some nuances related to the lack of data in the study.

Comments are closed.