Could Wind Curtailment Be the Next Big Opportunity for Bitcoin Mining?

[pgrach]

Hey everyone,

These holidays I’ve been working on a tool https://curtailcoin.com/, which tracks wind curtailment across Great Britain. For those unfamiliar, curtailment happens when wind farms produce more energy than the grid can handle or/and there is no demand. What is even more crazy here in the UK is that consumers pay wind farms for that wasted energy!

This got me make this conversion of curtailment into Bitcoin.

Here’s an example from today:

• Wind farms in Scotland are idle due to low wind speeds.
• In England, wind farms are close to 100% output, making up 58% of grid power.
• Gas generation was dialed back, and there’s no curtailment today because the grid wasn’t congested.

But most of the days with excess wind in Scotland, the curtailment numbers are huge. Bitcoin mining could soak up surplus electricity, support grid stability, and even help renewable projects generate extra revenue.

My questions to the community:

Do you think miners could work more closely with renewable energy providers / generators?
What would it take to make wind-curtailed energy accessible for mining operations?
How to fix incentives for wind generators to motivate them to look at BTC as thier curtailment solution?
Are there existing examples where this is already being done?
I know the idea is not new, I’m still early in exploring it and would love to hear your thoughts, experiences, or critiques. If you’re curious, you can check out the tool here: curtailcoin.com.

Looking forward to the discussion.

[NotFuzzyWarm]

That is EXACTLY what is being done in Texas and a couple other states in the US where the grid is currently unable to carry excess power from wind/solar farms to the rest of the country. Power producers in those areas use mining to provide a variable base-load to soak up excess power and when needed, miners are paid a stipend to cut back their operations so more power goes to the grid.

It is a win-win for everybody: producers have incentive to build more wind/solar farms and miners get low-cost power.

[pgrach]

Right, I still need to read up on how exactly they arranged it in the US. But I though mining in ERCOT zone was more tuned to peak demand, i.e. miners are connected to the grid just like any other consumer but they have that special arrangement to ramp down responding to the signal when grid is overloaded => so they switch off less frequently (mining uptime higher).

The model I am speculating about is more rigidly bound to the intermittency profile of each local wind farm: up to the point that a mining container is not even connected to the grid - but to the farm directly => mining uptime is smaller (depending on how often the given farm is curtailed).

That is why I placed this post in "speculation" subtopic    

[MaxMueller]

In germany we have no differenciation between renewable energy, often it is a combination of yields from wind and solar wich leads to negative prices at electricity exchange.

BUT: even with dynamic electricity tariff you may have to pay at least 0,15€ (even with spot price =0,00€) due to network charges, therefore it would be necessary to cooperate directly with electricity producer

AND: you have to keep in mind the acquisition costs per operating hour. If your full utilization is only 10-20% you may not even reach profits with miners 2-3 years old.

[mikeywith]

The model I am speculating about is more rigidly bound to the intermittency profile of each local wind farm: up to the point that a mining container is not even connected to the grid - but to the farm directly => mining uptime is smaller (depending on how often the given farm is curtailed). 

This is a completely different approach than what NFW explained, you are talking about a completely off-grid, isolated mining operation, similar to flare gas mining farms that sit on oil fields. it's a very good model with two big "or rather huge" IFs.

1- How much uptime are we talking?
2- How much does it cost for both aspects, A- power rate B- infrastructure.

For flare gas, uptime is guaranteed until the well is done (usually a decade or more), and you move your generator and container to the next well. it's also super cheap to operate and probably even free because you can sell carbon credits. The generator cost is maybe $1-2M per MW (just a quick Google search so the numbers could be OFF by a lot)

With your setup, we are talking about unstable energy, which then needs some sort of inverter, gearbox, or synchronous generator to get you stable AC power and is not guaranteed to be available all the time.

I would suppose if we are atling about 10-20% down time and the overall power rate is below 5 cents, with infrastructure that doesn't cost a lot more than the traditional mining setup, your idea "may" work.

[NotFuzzyWarm]

The model I am speculating about is more rigidly bound to the intermittency profile of each local wind farm: up to the point that a mining container is not even connected to the grid - but to the farm directly => mining uptime is smaller (depending on how often the given farm is curtailed).  

Um not connected to the grid? That then raises the question of why was the wind farm built?

Unless built on a remote island, wind (and solar) farms are not built as stand alone operations - they are connected to the electric grids to aid in supplying power to at least the local areas supplanting what can be bought in through the grids or other types of local generation. It is far too expensive to build a farm to just power miners. Since the farms are connected to the grid then so are the miners. The whole point of miners being in the equation is to allow the wind/solar farms to always run at full capacity vs the farms throttling back (and losing money) when demand for power is low and the amount of power available is too high.

It does have to be mentioned that the local excess power problem that miners address will not last forever as the US has several major transmission line upgrades & new construction underway to take power from states like Iowa, Montana and, Nebraska that have major wind/solar installations and move it to the rest of the country. Those should be done in about 10 years so it will be interesting how mines in those states cope with that once the 'excess power problem' goes away as it is a sure bet that they will be losing their current subsidies once the power can be sold elsewhere.

Even Texas which once was pretty much stand-alone with only 3 ties (and fairly low power ones at that) to the National Grid has at least 2 new major connection points under construction to provide power to surrounding states. The new connections of course work both ways so when needed Texas can import power if miner curtailment is not enough to satisfy demand.