Mara Holdings Inc.

01/16/2025 | Press release | Distributed by Public on 01/16/2025 18:39

Bitcoin Mining & The Environment: The Positive Externalities

Dive into the second post of our 'Common Bitcoin Myths Debunked' series to learn how Bitcoin mining fosters environmental benefits-like monetizing renewables, stabilizing grids, cutting methane, and recycling heat.

This is the second article in the Common Bitcoin Myths and Misconceptions Debunked series. If you missed our first article, you can check it out here.

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Early research has mischaracterized Bitcoin mining as being environmentally harmful. Much of this research has since been peer-reviewed, revealing flawed methodologies. While Bitcoin mining requires energy, it draws primarily from sustainable sources (56.75% as of 2023)-and this energy use is not wasteful. As this article will demonstrate, Bitcoin mining has several positive externalities for the environment and energy sector, transforming growing challenges into opportunities to create a more sustainable future.

How Bitcoin Mining Advances Environmental Sustainability

Bitcoin mining provides comprehensive solutions to critical environmental and energy challenges through its unique ability to:

  • Monetize & Optimize Renewable & Stranded Energy Assets
  • Stabilize Power Grids
  • Mitigate Methane Emissions
  • Recycle Heat from Operations
  • Develop & Adopt Sustainable Technologies

Monetize & Optimize Renewable & Stranded Energy Assets

Building the infrastructure to transport electricity from its source to customers isn't easy, especially when the source is located far from where it's needed. This issue is particularly acute for renewable energy projects, which are often located in remote, resource-rich areas far from population centers. While these locations are ideal for energy generation, they pose major obstacles for efficient transmission.

Building new transmission lines involves lengthy and complex engineering, planning, and permitting processes-all of which must be completed before construction can even begin. According to a study by the Harvard Kennedy School, new transmission projects take over 10 years to complete on average, with even short projects spanning 10 miles experiencing delays of up to 16 years. It is even common for renewable energy projects with established grid connections to lack sufficient transmission infrastructure to transport all the energy they can produce during peak generation periods.

These barriers leave energy stranded at the source, creating local oversupply and even driving electricity prices negative-a market signal that supply has overwhelmed the grid. As a result, producers are forced to curtail, intentionally reducing electricity generation. Curtailment rates have already reached 10% in several countries and, for certain solar and wind farms, rates have climbed as high as 40%, leaving energy assets underutilized and raising concerns about the economic viability of many renewable energy projects.

Photo of MARA's wind farm in Hansford County, TX

Bitcoin mining offers a scalable solution for optimizing renewable and stranded energy projects by consuming excess power onsite, thereby improving their economics. In Texas, where renewable energy deployment has outpaced grid infrastructure upgrades, MARA's Bitcoin mining data centers play a crucial role in reducing renewable curtailment. By operating at the source of generation, the company monetizes energy that would otherwise be curtailed due to insufficient transmission or demand.

In Hansford County, Texas, MARA recently acquired a 114 MW wind farm that was facing rising curtailment rates. The wind farm features 108 turbines, or enough to power an estimated 114,000 homes. The company expects its on-site operations to revitalize the wind farm by ensuring greater energy utilization and grid stability. A recent peer-reviewed study published in Heliyon found that a solar power plant alongside a Bitcoin mining operation could achieve ROI in approximately 3.5 years-less than half the time of the 8.1 years required without Bitcoin mining. This proven strategy of building power demand locally provides a reliable outlet for surplus renewable energy, reducing curtailment and encouraging renewable energy development.

Stabilize Power Grids

The power grid consists of an intricate network of transmission lines, substations, distribution lines, and transformers-each serving a specific purpose with distinct limitations. Independent System Operators (ISOs) manage these grids, working to maintain a balance between energy supply and demand. Without proper management, grids can quickly become unstable, potentially damaging critical infrastructure and preventing electricity from reaching its intended destination.

Traditional power sources like coal, natural gas, and nuclear plants have historically provided steady, predictable output that ISOs can easily manage to meet consumer demand and maintain a balanced grid. However, over the past decade, there has been an accelerated shift toward renewable energy and away from these conventional sources. In fact, renewable energy sources are expected to account for up to half of the global power supply by 2030. This transition presents a challenge: unlike traditional power plants, renewable energy generation depends on fluctuating and often unpredictable factors like wind and sunlight, making it more difficult for ISOs to manage effectively. This variable generation pattern is the exact reason why renewable energy sources often need to curtail production, as explained in the previous section.

The International Energy Agency (IEA) acknowledges the growing imbalances that grids face due to the rising use of renewables. Demand response-the practice of consumers adjusting electricity consumption based on grid conditions-plays a crucial role in maintaining stability. When the grid is stressed, participants in demand response programs reduce their power usage in order to prevent grid stress. The IEA emphasizes that this capacity must increase tenfold by 2030 to meet the climate goals outlined in the Paris Agreement.

Photo of MARA's grid-connected mining facility in Hood County, Texas, which helps stabilize the local grid.

Bitcoin miners are natural tools for demand response due to their unique ability to act as large, flexible energy users. They can quickly reduce their power use during periods of grid stress and ramp up consumption when energy is abundant. What makes this especially effective is that miners regulate their power usage voluntarily in response to energy prices. Within minutes, they can adjust their operations to help balance the grid with no disruption to Bitcoin's decentralized network. Unlike Bitcoin miners, traditional data centers often cannot power down without affecting their clients, and heavy industries, like aluminum manufacturing, respond slowly to grid events and potentially risk disrupting supply chains.

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The United Arab Emirates experiences significant seasonal shifts in energy consumption, resulting in large amounts of excess energy for half the year. After evaluating various grid-balancing technologies, the UAE selected Bitcoin mining as the optimal solution and MARA as its strategic partner. Partnering with Zero Two, MARA launched the region's first large-scale, immersion-cooled grid-balancing data centers. These operations help balance the grid by utilizing this excess energy generated in the winter, helping ensure year-round grid stability and profitable energy generation.

During winter storm Elliott in December 2022, Bitcoin miners in Texas demonstrated their ability to support grid stability. Collectively, miners returned up to 1,500 MW of energy to the grid, enough to heat over 1.5 million homes or power 300 large hospitals. Texas' Independent System Operator, ERCOT, has acknowledged how Bitcoin mining can effectively balance the grid. Miners reduce excess grid capacity when energy consumption is low and can help prevent overloading the grid by shutting down when the grid is overwhelmed with demand. The result? Lower price volatility and fewer power shortages and disruptions.

Source: MARA, ERCOT (LFLTF Collaboration Deck)
The cars are a metaphor, illustrating how unpredictable demand strains the grid like driving on a steep road, while stabilizing technologies create a smoother "road" that is easier for the grid to manage.

Mitigate Methane Emissions

Methane is responsible for approximately 30% of today's current rise in global temperature, and it's estimated to be over 80 times more potent than carbon dioxide over a 20-year period. One area where methane emissions can be mitigated is the oil and gas sector.

During crude oil extraction, producers often produce natural gas that contains high concentrations of methane. Known as "associated gas," this resource frequently goes underutilized due to the logistical and economic challenges of establishing pipelines to transport it. As a result, producers often resort to flaring the gas, a process used to reduce emissions by converting methane into less potent carbon dioxide. However, flaring is only 92% efficient, allowing 8% of methane to escape into the atmosphere. Globally, approximately 140 billion cubic meters of natural gas are flared annually.

Photo of MARA and NGON Bitcoin mining site on a wellhead in Hearne, TX

Bitcoin mining offers a scalable and economical solution to methane emissions by bringing the market directly to the source of energy. By converting methane into electricity and utilizing it on site, Bitcoin mining eliminates the need for costly infrastructure, making projects more cost-efficient and environmentally sustainable.

MARA has partnered with NGON to deploy a 25-megawatt Bitcoin mining operation at oil and gas wellheads across Texas and North Dakota. By capturing excess gas that would typically be flared and converting it into electricity for Bitcoin mining, these operations achieve up to 99% methane mitigation efficiency.

Similar applications can extend to other methane-emitting industries, such as landfills and agriculture, offering a sustainable model for emission reductions and energy utilization across sectors.

Recycle Heat from Operations

Heat plays a vital role in our daily lives, from warming our homes and water to powering essential industrial processes. Heating accounts for about 50% of the world's total energy consumption, with 75% of this heat derived from fossil fuels. The ongoing shifts in the global energy landscape can help reduce our reliance on burning fossil fuels. In 2023, renewables accounted for 86% of capacity additions worldwide. As the grid becomes cleaner, transitioning to electric heating systems can significantly reduce global emissions.

Electrification, primarily of heating, is the key strategy for decarbonizing heating and cooling. -IRENA

Data centers are expected to account for up to 9% of the world's energy demand by 2050. These energy-intensive facilities generate significant amounts of heat, creating a unique opportunity for strategic partnerships with those who need heat. However, transporting heat efficiently can be even more difficult than transporting electricity. Heat dissipates quickly as surroundings absorb it, which is why most heat recycling is only viable for data centers located close to heat demand.

Bitcoin mining data centers can be much more compact and energy dense than traditional, air-cooled data centers, meaning these systems are able to provide large quantities of heat at sufficient temperatures right where it's needed. This ability to co-locate with heat demand means:

  • Low-cost, rapid deployment: By eliminating the need for heat pipelines between distant data centers and facilities (like district heaters or greenhouses), this approach reduces labor, infrastructure, and transport costs.
  • Greater efficiency: On-site heat generation helps avoid the thermal energy losses that occur when transporting heat from remote data centers.
Photo from inside of one of the district heating facilities MARA serves, with cabinets housing mining equipment.

The incidental heat generated by Bitcoin miners can be harnessed for:

  • District Heating: District heating, which is crucial for meeting urban heat demand, has historically relied on carbon-emitting fuels. In Finland, MARA has established purpose-built data centers that operate within district heating facilities, recycling heat from Bitcoin mining to warm nearly 80,000 residents. The project leverages Finland's clean electricity mix to reduce the industry's reliance on burning biomass-a practice that contributes to deforestation and carbon emissions.
  • Agricultural Processes: As populations expand, it becomes necessary to maximize agricultural potential in areas that may not be suitable for growing year-round. Farmers in Nordic communities are harnessing the heat from Bitcoin mining to grow vegetables in greenhouses. This strategy can integrate economically into agricultural operations, boosting local food production in challenging climates.

Through innovative approaches to recycle heat, Bitcoin mining can help reduce both emissions, energy use, and costs. This process creates a dual benefit: the same energy that generates valuable digital assets also produces useful heat that would otherwise require separate energy consumption. This efficient dual-use model creates a win-win situation-miners lower their operating costs while heat users gain access to affordable, sustainable heating solutions.

Developing & Adopting Sustainable Technologies

Bitcoin's hashrate-a metric indicating the network's competitiveness-rose by 104% in 2023 and another 50% in 2024. This surge in competition, combined with the recent block reward halving, requires miners to become significantly more efficient to remain competitive-primarily by reducing their largest operating cost: electricity. While each of the strategies detailed in this article demonstrate how miners optimize energy costs through creative solutions, significant technological advancements in mining hardware (ASICs) and infrastructure have also emerged to meet these efficiency demands.

Gains in Bitcoin Mining Hardware Efficiency: Since Bitcoin's inception in 2009, mining equipment has become 73,000 times more efficient, meaning today's miners can perform 73,000 calculations using the same amount of energy that first-generation miners needed for a single calculation. Advancements in silicon technology have delivered these major efficiency improvements. Among today's most advanced ASIC manufacturers is Auradine, a U.S.-based company that produced the world's first 4-nanometer silicon chip for Bitcoin mining and, shortly after, announced the development of a 3nm Bitcoin mining chip.

Source: MARA, HashrateIndex, Bitcoin Mining Council

Breakthroughs in Cooling Infrastructure: Many Bitcoin miners have been adopting immersion cooling to enhance the efficiency of their operations. This method involves submerging mining hardware into tanks filled with nonconductive fluid, which dissipates heat more effectively than air cooling.

Leveraging its expertise from operating over a gigawatt of Bitcoin mining infrastructure, MARA has developed, tested, and refined some of the most efficient cooling technologies in the world. The company's 2PIC (Two-Phase Immersion Cooling) technology takes immersion cooling a step further by introducing a phase change. This method uses a specialized liquid coolant that absorbs heat, vaporizes, and then condenses back into liquid within a closed-loop system. MARA's process reduces cooling overhead by up to 65%, space requirements by up to 75%, and-because it is a closed loop-eliminates water use entirely. With 2PIC, performing the same tasks requires less water, energy, and land.

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Photo showing Bitcoin mining ASICS operating inside a 2PIC cooling system.

The Bottom Line: Bitcoin Mining Is a Net Positive for the Environment

Bitcoin mining is more than just a tool for generating cryptocurrency-it's a transformative technology that addresses critical energy challenges. The technology's characteristics uniquely position it to tackle numerous challenges like renewable energy curtailment, grid instability, methane emissions, and resource consumption (i.e., heat, energy, etc.). As a leader in the Bitcoin mining industry, MARA is committed to leveraging Bitcoin mining to create a more sustainable and inclusive future.

Learn more about how Bitcoin mining can drive sustainability by visiting MARA's educational resources.

Research on Bitcoin Mining's Environmental Impact

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