Take-or-pay busbar power purchase agreements with electric utilities are all well and good, but they’re starting to look a bit old-fashioned. Bitcoin batteries and green hydrogen are where it’s at these days.
Many readers of Power Finance & Risk will be old enough to remember when the main point of generating electricity was to keep the lights on. What a quaint idea that seems today.
In the future, most generation will be used to mine Bitcoin instead, while some will be turned into green hydrogen – at least that’s what the kids tell me.
Bitcoin mining already uses more than 75 TWh per year and the higher the price of the cryptocurrency, the greater the demand for energy to mine it, according to a primer prepared by Digital Power-Optimization, a power-to-Bitcoin start-up that recently wrapped seed funding (PFR, 9/29).
“If the price of Bitcoin reaches some predictions of $100,000 or $500,000 or $1,000,000 per coin, the amount of energy required…green energy by regulatory mandate…will be immense,” reads the document.
DPO’s plan is to help existing generators to use excess power to mine Bitcoin, which could be an appealing solution to owners of wind farms struggling with curtailment in West Texas.
Meanwhile, Layer1 Technologies – which is backed by venture capital firms Digital Currency Group and Shasta Ventures as well as PayPal co-founder Peter Thiel – has combined energy storage technology, demand-response software and Bitcoin mining computers in containers called Bitcoin batteries to provide grid-stabilization services while also making money out of cryptocurrency.
Not a fan of cryptocurrency? No problem. Why not turn your excess power into the molecule of the moment, green hydrogen? That seems to be the plan of Apex Clean Energy, which recently signed a deal with hydrogen fuel-cell supplier Plug Power to develop a network of green hydrogen plants around its wind and solar development pipeline (PFR, 9/29).
Throw in electric vehicle charging infrastructure, and demand for renewable energy looks set to go from strength to strength.
Of course, there will have to be innovation on the financing side, too.
How long can it be before renewable energy project finance bankers are being asked to evaluate future Bitcoin revenues? Sharpen your pencils…