Kenyan energy company entices Bitcoin miners with geothermal power

[mikeywith]

I find it a little ironic that the country's main electricity producer is inviting Bitcoin miners to take advantage and purchase its excess power capacity when 30% of the population still doesn't have access to electricity.^[1] Secondly, the producer is offering excess power which is generated from free underground heat and yet Kenya has expensive electricity cost. I don't know, I somehow find this invitation a little odd.

Transmission and distribution of electricity are very complex and very, very costly, just because you have excessive power at point A -- doesn't mean you can't be lacking the necessary power at point B, you can solve this problem if you throw enough money at it, but then transferring power will come at a great cost of money + a good amount of it will be lost in the transmission process, the person/s receiving it need to be able to afford all that extra cost added, or else, it doesn't make any sense to invest billions of dollars to send that power to the other side of the country.

Kengen isn't 100% owned by the government, so the shareholders will probably care more about how much money they can make than supplying the poor with electricity (the government too probably doesn't care), so it really makes no difference if 30% of the people have no electricity or even 70% of them, miners can bring their containers right next to the power source which means no Step-Up/Down transformers, no expensive transmission towers, which means saving billions of dollars.

Of course, I am not arguing if it's moral to sell electricity to foreign bitcoin miners while 30% of your own people are in the dark, freezing to death in winter and melting in the summer heat, of course, it's inhuman at best, but it seems like those 30% are poor and live somewhere in the countryside, so even if the company would transfer the power there, they will either not afford to pay for it, or not use even half of it, which gives the shareholders of the company the incentive to find other clients, it's pretty damn sad to see that some people in 2022 still don't have electricity at home, but it's what it is.

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[worle1bm]

I find it a little ironic that the country's main electricity producer is inviting Bitcoin miners to take advantage and purchase its excess power capacity when 30% of the population still doesn't have access to electricity.^[1] Secondly, the producer is offering excess power which is generated from free underground heat and yet Kenya has expensive electricity cost. I don't know, I somehow find this invitation a little odd.

[1] https://tradingeconomics.com/kenya/access-to-electricity-percent-of-population-wb-data.html

From this it seems like they are only interested in making profits out of the miners by imposing taxes on them and earn through them with providing them electricity that they should be providing to the normal residents of the country.They are inviting miners which is good but this should not happen at the cost of people's need there as they are suffering without electricity.So they should focus on these matters also while adjusting mining capabilities.

[TheNineClub]

https://cointelegraph.com/news/kenyan-energy-company-entices-bitcoin-miners-with-geothermal-power

The country’s main electricity producer has issued a general invite for Bitcoin miners looking to take advantage of its renewable energy facility near the capital, Nairobi.

Kenyan energy company KenGen has put out a call to Bitcoin miners to move nearby and buy its excess renewable power capacity.

KenGen claims 86% of its energy is generated from renewable sources, mostly geothermal from pockets of ground source heat in the Great Rift Valley. Local news outlet The Standard reported that KenGen has space at its new industrial park in Olkaria, near its flagship geothermal power station, which could be rented to Bitcoin (BTC) miners.

The Acting Director of geothermal development at KenGen Peketsa Mwangi said that his company was willing and eager to have the miners call Kenya home.

Bitcoin is going more green, see a country electricity producer calling out for crypto miners to come to their country for crypto mining to mine with green energy, the electricity producer in Kenya, KenGen said 86% of their electricity generation are generated from renewable source. Bitcoin mining is becoming a business in the world that some organizations in a country see that they can make profit from. This will favour Kenya government in earning from bitcoin mining.

Energy consumption is something that BTC must solve in order to evolve to the next level that is much more widespread adoption. While this does not solve the energy consumption issue per se, it's definitely a better option in the long run and it could prompt companies that deal in renewables, to invest more in crypto and in turn push the green energy narrative onto governments who, in turn, could subsidize those same companies more and encourage new companies to put their stamp on the whole issue.

[KingsDen]

<snip>

just like someone mentioned above, corruption may deter some foreign investors to invest in this country. if they can't attract foreign miners or investors, they can always get the local support. it may improve the economic status of its people. kenya is still in the third world category, so if their people will find a way how to elevate their economic status, then why not focus first in helping their own people?

Very apt, Kenya is still a third world category. They have traces of corruption, I thought they would have gotten it right when their son became the president of America. They had a better international image then.
Still my concern that people (foreigners) will be reluctant to invest in an economy that isn't trustworthy.
Darker45 mentioned above how the country cannot satisfy the electricity need of her people let alone having excess. Everything is no looking straight though.

[justdimin]

Bitcoin is going more green, see a country electricity producer calling out for crypto miners to come to their country for crypto mining to mine with green energy, the electricity producer in Kenya, KenGen said 86% of their electricity generation are generated from renewable source. Bitcoin mining is becoming a business in the world that some organizations in a country see that they can make profit from. This will favour Kenya government in earning from bitcoin mining.

I understand that renewable energy is a big deal in the world right now because not only it is great for the climate, but also because it will make sure that a nation would be energy self sufficient and that is why most nations look at it.

Nobody really cares about the climate change, the whole world will become more and more inhabitable, we are looking at the summers as fire times, last year the place I was living burned to ground, it got 1km close to where I supposed to be, thankfully I ran away before it even started, and went back home, but the place I was as a holiday basically got fires all around it, with absolutely no way to get out. These are all because of climate change, and yet self sufficient energy resource is better for every nation.

[Lucius]

Yeah, speaking from experience too, it's the second coldest African country I've lived in (Ethiopia's frigging cold in winter). Compared to rest of Africa is much cooler in Kenya due to elevated land (for me, relatively anyway, from Southeast Asia, Kenya or at least Nairobi areas, it's really chilly. Right now actually 15 degrees Celcius, which is cooler than most air-conditioned places in SE Asia). Also it seems to be getting weirdly cold there -- 2 years ago massive hailstones destroying crops all around, snow occasionally since mid-2000s. So maybe it's less of an issue there (possibly even slightly more advantageous than in other parts of low-land Africa).

15 degrees sounds really good from the perspective of someone currently baking at 30+ and is thousands of miles away from Kenya. Generally people think that the whole African continent is one big hellish kitchen with a few exceptions, but the southern part of the continent seems to be quite colder than the north and the central part.

The more difficult issue to deal with would be the humidity, mining in a humid place is a lot worse than mining in a hot dry place, which many people seem to overlook, moisture is worse than heat, especially if you live in coastal areas, saltwater will do more damage to your gears than temps, humidity is also a lot harder to manage than heat.

Good information that many certainly didn't know about, and it definitely makes sense when you explain it that way. This would mean that some areas in Africa actually have the potential for crypto mining, despite having high temperatures in certain parts of the year. I looked at the situation with hydropower in Africa, and in the last 2 years the capacity was 38 GW, which is about 16 percent of total consumption, and by the end of 2040 that share could be about 25%.

Source

[kryptqnick]

It's truly great when there are examples like this, showing that crypto mining can be eco-friendly. Using geothermal power for mining is something, I believe, El Salvador was looking into, and it seems that Kenya is already doing it. And if the power is cheaper than hydroelectric, as Hydrogen suggested in the thread, that's also a good sign. But what are the laws regulating mining and crypto operations in Kenya? Are there taxes, are they reasonable? How hard is it to mine legally, and how dangerous is it to do so without legal registration?
And Darker45 raised an important point about inviting miners when a third of the population lives without electricity.

[_act_]

I find it a little ironic that the country's main electricity producer is inviting Bitcoin miners to take advantage and purchase its excess power capacity when 30% of the population still doesn't have access to electricity.^[1] Secondly, the producer is offering excess power which is generated from free underground heat and yet Kenya has expensive electricity cost. I don't know, I somehow find this invitation a little odd.

[1] https://tradingeconomics.com/kenya/access-to-electricity-percent-of-population-wb-data.html

From this it seems like they are only interested in making profits out of the miners by imposing taxes on them and earn through them with providing them electricity that they should be providing to the normal residents of the country.They are inviting miners which is good but this should not happen at the cost of people's need there as they are suffering without electricity.So they should focus on these matters also while adjusting mining capabilities.

Some people that do not access electricity in Kenya will be people that are villagers, Kenya is one of the countries in Africa with good electricity, when the largest electricity producer in Kenya knows that it will be profitable for them and profitable for miners, they came up with the good idea. United States has one of the most expensive electricity in the world and have the largest bitcoin miners, the PPP in US is higher than in Kenya, I think this will be good idea.

https://www.statista.com/statistics/263492/electricity-prices-in-selected-countries/

[KennyR]

Kenya have made a good decision in power generation and requesting investors invest on cryptocurrency mining out of the geothermal energy. There are discussion of transmitting the excess power generated, so that it'll bring revenue. But the real-time difficulty is big through the massive transmission loss. During the previous year Kenya have marked the highest power loss during the domestic transmission and distribution. It roughly account to 23% of the electricity produced during the year. This is why investors are asked for making use of the excess energy generated.

[Leviathan.007]

Whenever we talk about green and non-fossil energies I think about the cost of the devices for this kind of energy source because some people may think they green energy is always free and available so it's very much profitable for the miners to start using and consuming the green energies instead of the fossil energies buy if you consider the cost of devices required to provide these kinda energies even green energy won't guarantee anything but considering the current situation of the environment using green energies can be a good and wise option for the people and organizations who care about the environment.

[stompix]

Some people that do not access electricity in Kenya will be people that are villagers, Kenya is one of the countries in Africa with good electricity, when the largest electricity producer in Kenya knows that it will be profitable for them and profitable for miners, they came up with the good idea. United States has one of the most expensive electricity in the world and have the largest bitcoin miners, the PPP in US is higher than in Kenya, I think this will be good idea.

https://www.statista.com/statistics/263492/electricity-prices-in-selected-countries/

Stop looking at average rates, nobody mines at national average prices!
Do you think I would still mine at around 30 cents per kwh?

Large farms in the US manage to get 2.5-5 cents deals, nobody will set up those huge MW datacenters with 16 cents/kwh , just pick any mining calculator and you'll see nobody makes money at those tariffs. What's interesting is that Kenya is even higher there at 22 cents per kwh which really picked my curiosity..

https://www.the-star.co.ke/business/kenya/2021-10-27-kenyas-electricity-cost-fourth-highest-in-africa-study-shows/
https://www.kbc.co.ke/kenya-power-needs-radical-surgery-as-first-step-to-cheaper-electricity/

And this might be the nail in the coffin for the mining deal
I don't see how the people will accept a state-owned company selling cheap electricity to miners while they are taxed 4 or 5 times more.
Behind the curtain deals, maybe, opened offers for everyone, now way!

Kengen isn't 100% owned by the government, so the shareholders will probably care more about how much money they can make than supplying the poor with electricity (the government too probably doesn't care), so it really makes no difference if 30% of the people have no electricity or even 70% of them, miners can bring their containers right next to the power source which means no Step-Up/Down transformers, no expensive transmission towers, which means saving billions of dollars.

70% means it's still government-owned, what the government wants they will do.
I've seen enough of those energy companies turning from highly profitable to a money pit because they wanted to sell stuff cheap to rank in votes for elections, of course, you're scenario is perfectly fine and I don't doubt it might happen as it did in Georgia but it's still poor planning. When you already have spare capacity the next thing is to try to invest in the infrastructure so you can deliver this, not build more and have more energy you can't sell.

I wonder what's the "fee" for an introductory meeting there.

[suzanne5223]

Firstly seeing more countries coming up with the creation of green electricity energy and inviting cryptocurrency miners to come to their country is totally a good sign that there will be no problem for crypto miners in the future even though some people choose to accuse the crypto mining sector of harming the atmosphere whereas the CO2 released by miners is not up to the CO2 released every day by the industrial company.

This is a good one from an African country I hope others can learn from Kenya in other to boost the economy especially now that a lot of countries are struggling.

[RealMalatesta]

just like someone mentioned above, corruption may deter some foreign investors to invest in this country. if they can't attract foreign miners or investors, they can always get the local support. it may improve the economic status of its people. kenya is still in the third world category, so if their people will find a way how to elevate their economic status, then why not focus first in helping their own people?

Very apt, Kenya is still a third world category. They have traces of corruption, I thought they would have gotten it right when their son became the president of America. They had a better international image then.
Still my concern that people (foreigners) will be reluctant to invest in an economy that isn't trustworthy.
Darker45 mentioned above how the country cannot satisfy the electricity need of her people let alone having excess. Everything is no looking straight though.

Companies do not care about corruption, even if the place is a corrupted one, then making a profit would not be that much of a difficulty and they could easily end up with something that bribery would fix and they would be able to profit from it. I mean think about it, you will be able to profit from paying bribery towards corrupted politicians and make a lot more money that you paid for, why wouldn't you want to do that?

I am sure that they would be willing to do that very easily. Hence all of the problems you may think about Kenya, is gone when we are talking about companies liberal/capitalist enough, because it might be bad, but they are willing to do bad things for profit.

[Darker45]

I find it a little ironic that the country's main electricity producer is inviting Bitcoin miners to take advantage and purchase its excess power capacity when 30% of the population still doesn't have access to electricity.^[1] Secondly, the producer is offering excess power which is generated from free underground heat and yet Kenya has expensive electricity cost. I don't know, I somehow find this invitation a little odd.

[1] https://tradingeconomics.com/kenya/access-to-electricity-percent-of-population-wb-data.html

From this it seems like they are only interested in making profits out of the miners by imposing taxes on them and earn through them with providing them electricity that they should be providing to the normal residents of the country.They are inviting miners which is good but this should not happen at the cost of people's need there as they are suffering without electricity.So they should focus on these matters also while adjusting mining capabilities.

Some people that do not access electricity in Kenya will be people that are villagers, Kenya is one of the countries in Africa with good electricity, when the largest electricity producer in Kenya knows that it will be profitable for them and profitable for miners, they came up with the good idea. United States has one of the most expensive electricity in the world and have the largest bitcoin miners, the PPP in US is higher than in Kenya, I think this will be good idea.

https://www.statista.com/statistics/263492/electricity-prices-in-selected-countries/

I suppose good electricity and good access to electricity are two different bananas. And while the US has indeed quite a high electricity cost in average, Kenya has higher. And despite the high electricity cost, the US has a hundred percent access to it while Kenya has only 70%. Moreover, the impact of the electricity rate of a country will highly depend on the economic capacity of its population. In which case, Kenyans are definitely burdened a lot more than the US people.

Anyway, I'm not discrediting the profitability of the idea of the electricity producer. However, there must be a whole lot of other conditions which matter so much in the overall success or failure of this idea. The overall business environment of the country is going to be a big factor as well.

[franky1]

I find it a little ironic that the country's main electricity producer is inviting Bitcoin miners to take advantage and purchase its excess power capacity when 30% of the population still doesn't have access to electricity.^[1] Secondly, the producer is offering excess power which is generated from free underground heat and yet Kenya has expensive electricity cost. I don't know, I somehow find this invitation a little odd.

[1] https://tradingeconomics.com/kenya/access-to-electricity-percent-of-population-wb-data.html

30% do not have it due to distance.

here in the UK i like 20 miles from a power station. where by from the power station to my location there are 500,000 homes. meaning the cabling cost from my location to the power station is 500,000th of the price of the cable as we all pay a little bit in our bills to cover the costs of cabling, mainenance and upgrading.

however a tribal village of 30 people(10 homes) 120 miles from a power station automatically has a cost (if they managed to convince a company to cable it to them) of many times more than my costs.. which most power companies see no benefit/profit in investing in expensive cabling for such small communities especially when there are so many small communities. spread soo widely.
the costs to supply them all would never yield any ROI

and now you been schooled in why 30% are not supplied. and why those not close but within reach of a power plant are not cheap..

however if you are located right next to a power plant that also happens to have a city nearby to share the local supply cost.. then you can get it alot cheaper.
the more people sharing the cost. the more the over all cost comes down

Anyway, I'm not discrediting the profitability of the idea of the electricity producer. However, there must be a whole lot of other conditions which matter so much in the overall success or failure of this idea. The overall business environment of the country is going to be a big factor as well.

the business idea is simple.
power plants never build to only have capacity to supply its local population of that year. they plan 60 years ahead meaning 3 generations of population growth. (3x+ current demand)

instead of waiting 20 years for an increase in demand(residential growth). meaning only working at 33% capacity in first 20 years. 66% in 20-40 then near 100% in 60+ years.. they want to be able to work at 65-95% capacity right now from day one. so that they can make more money right from day one.
this requires either convincing residents to sell their property far away and move closer, or entice businesses/industry with large energy requirements to come closer, on a more temporal contract(no 50-100year leases).

bitcoin mining is actually a good business to entice, as they can haul their asics in trucks and set up in weeks. and in a few years if the demand is too much, be told to stop and those asics can be moved out of the area very easily. (compared to other industries)

and so while waiting 20 years for residential demand that power plant can offer that capacity to bitcoin miners on 5-20 year contracts. and if residential demand does pick up, then cut off the mining contract to divert the capacity back to residential. easily and cheaply without affecting local economy

..
think of it like this.
1 asic farm requiring 3kwh per asic. with 10,000 asics in one building, employing 20 people

that 'supply contract' is the equivalent of 60,000 residents (20,000 homes)
that 'supply contract' is the equivalent of 20 product distribution warehouses (2000 employee's)

so if residential demand was to grow and the power plant had to cut the mining contract. legally speaking and local economically speaking..  it only affects 1 company and 20 employees. so its an easy decision

alot easier then trying to convince 20 warehouses/companies to move in with a risk of their lease expiring in 5-20 years. and then making 2000 local population unemployed

convincing 1 asic company or 20 product manufacturers. is an easy job to convince one asic company.
plus in 20 years, it wont affect the local economy much to make only 20 people unemployed compared to 2000+ people, where the latter would be bad for the area

[buwaytress]

Yeah, speaking from experience too, it's the second coldest African country I've lived in (Ethiopia's frigging cold in winter). Compared to rest of Africa is much cooler in Kenya due to elevated land (for me, relatively anyway, from Southeast Asia, Kenya or at least Nairobi areas, it's really chilly. Right now actually 15 degrees Celcius, which is cooler than most air-conditioned places in SE Asia). Also it seems to be getting weirdly cold there -- 2 years ago massive hailstones destroying crops all around, snow occasionally since mid-2000s. So maybe it's less of an issue there (possibly even slightly more advantageous than in other parts of low-land Africa).

15 degrees sounds really good from the perspective of someone currently baking at 30+ and is thousands of miles away from Kenya. Generally people think that the whole African continent is one big hellish kitchen with a few exceptions, but the southern part of the continent seems to be quite colder than the north and the central part.

Yeah, have to be honest I didn't know much about the world outside until I actually learnt on my own. Geography lessons sort of only served to emphasise film stereotypes. I actually found many parts of Africa cooler and more comfortable to live in than where I come from. I've come to find that temperature is one problem, but also cover (shrubbery, etc.), wind, dust and humidity can sometimes be far more important for comfort and durability of machinery.

Also the issue of humidity mikeywith brought up, very true and that's something we deal with a lot in Southeast Asia, but air conditioning fixes the heat and humidity problem. Something else Kenya does a bit better too that most other parts of Africa (again, because of elevation).

[franky1]

it's really chilly. Right now actually 15 degrees Celcius,

while UK/US are in a spring summer season.. right now kenya is entering its autumn winter season
so dont compare temperaures day to day. as its an unfair comparison to compare one places summer to another places winter

based on year average
kenya enjoys 17^oc(winter: july-august) to 21^oc(summer: feb-march)

where as say.. texas america is 13^oc to 30^oc

[Darker45]

I find it a little ironic that the country's main electricity producer is inviting Bitcoin miners to take advantage and purchase its excess power capacity when 30% of the population still doesn't have access to electricity.^[1] Secondly, the producer is offering excess power which is generated from free underground heat and yet Kenya has expensive electricity cost. I don't know, I somehow find this invitation a little odd.

[1] https://tradingeconomics.com/kenya/access-to-electricity-percent-of-population-wb-data.html

30% do not have it due to distance.

and now you been schooled in why 30% are not supplied.

I know. It must be the distance. Nobody needs to be schooled about it. My country, and probably a lot of other developing countries as well, actually shares the same problems with Kenya when it comes to challenges in electricity distribution, especially in remote villages and rural areas or what my country classifies as GIDA or Geographically Isolated and Disadvantaged Areas.

However, simply citing this distance challenge is more of an excuse. It is oversimplifying things. It has to be further qualified. And it is not and cannot be acceptable. When a government is confronted with a high number of its population having no access to electricity, challenges have to be broken down into factual and specific details. The president can't just be told by his/her energy secretary, "it's distance, Mr. President," and the discussion immediately stops.

Electricity, after all, is a basic utility, a basic public service. And it means more than just a light bulb inside the house or a light post on the street. It cannot even be reduced to a simple mathematics of investment versus return. In my archipelagic country, a small distant island with a relatively small population and without any industry, cannot just be deprived of electricity. And many of such islands are with electricity.

[Oluwa-btc]

it's really chilly. Right now actually 15 degrees Celcius,

while UK/US are in a spring summer season.. right now kenya is entering its autumn winter season
so dont compare temperaures day to day. as its an unfair comparison to compare one places summer to another places winter

based on year average
kenya enjoys 17^oc(winter: july-august) to 21^oc(summer: feb-march)

where as say.. texas america is 13^oc to 30^oc

Frankly, Franky1 you're very brilliant and intelligent. I must say the limitations of utilization Bitcoin in Africa topic was inspired by you!
Honestly, reading your profile gave me insight to write that topic.
A bit hard to assimilate at times, but, I must say you're good!  I hope you giggle and Chuckle at these, me don't flatter!!

[franky1]

I find it a little ironic that the country's main electricity producer is inviting Bitcoin miners to take advantage and purchase its excess power capacity when 30% of the population still doesn't have access to electricity.^[1] Secondly, the producer is offering excess power which is generated from free underground heat and yet Kenya has expensive electricity cost. I don't know, I somehow find this invitation a little odd.

30% do not have it due to distance.

and now you been schooled in why 30% are not supplied.

I know. It must be the distance. Nobody needs to be schooled about it.
..

However, simply citing this distance challenge is more of an excuse. It is oversimplifying things. It has to be further qualified. And it is not and cannot be acceptable.

its not a "just distance" thing..

if you take what you quoted of my message (single line out of context) then yes as a single line, it does not explain the specifics.. but funny thing is about public forums is that other people can read the whole message i posted where i explained more specific details. of why distance is a factor(with specifics aswell)

lets try going even further, heck maybe you dont like walls of text(funny to have that flaw on a text based forum) ..so lets use an image



hope that helps