You’ve got a generating station - perhaps it’s renewable (such as wind or solar) or perhaps it’s a battery bank - but, you have a constrained network connection meaning you can’t always export everything that you generate. This is a fairly common technical challenge faced by many sites, often solved through the use of a ‘dump load’ in the form of a high power resistor, which emits the energy as heat either into the atmosphere or to an immersion tank for sites where hot water can be used. However, this is very wasteful and often means a reduction in income streams through a lack of export price and potentially renewable incentives.
An alternative to dumping this load could be battery storage; however, the current capital costs of such systems are high. Pumped hydro could be another solution to the problem, but the site would need to be located near an elevated point (a hill or a tank for example) that water could be pumped to in order to be made use of at a later time. One particularly forward thinking company has come up with a solution to make use of this wasted electricity for an altogether different kind of income stream.
Envion wants to locate their cryptocurrency bitcoin mining rigs (which are essentially banks of computer processors) on sites where cheap (or even free) electricity is available. By now, you will have probably heard of cryptocurrencies and, in particular, the media hype surrounding Bitcoin (currently worth over £9,500 per bitcoin). Whether interest in cryptocurrencies is purely speculative, or whether these types of currency have a genuine future is a whole other question and one that can’t be answered in a single blog post (many people like the rise of cryptocurrencies to the early days of the internet), but one thing is for sure, there is a lot of money currently being invested in it.
Using bitcoin as an example of a cryptocurrency, any transaction of bitcoin between two people is validated by a network of ‘bitcoin miners’ (more on that later) and then logged alongside a number of other transactions within a ‘block’, in order to avoid duplication and thereby fraud. Many of these blocks are linked and secured using cryptography to form the ‘blockchain’, which is effectively a distributed ledger of all transactions that have previously occurred. Bitcoin miners use computer processing power to validate transactions across the network, pack them into blocks and add these new blocks to the blockchain - as a reward for doing this, new Bitcoins are created. Because the rate of creation of new bitcoins is kept at a constant, the more powerful the network of miners is, the more the difficulty of validating transactions is increased (through the use of more complex cryptography).
Many miners run their mining rigs from grid electricity, which, depending on where you are in the world, can be quite expensive so the return on investment on the hardware and the running costs can be decreased as a result. A generator that is unable to export some of its electricity to the grid is an ideal match for this type of application.
We have come a long way from mining coal for power - if there is something in cryptocurrencies (and that’s a very big if!), then cryptocurrency mining rigs may be making more of an appearance next to renewable generators in the near future…