Nuclear and Gas Fastest Growing Power Sources for Bitcoin Mining: Data

The electricity mix of Bitcoin (BTC) has changed significantly in the past few years, with nuclear energy and natural gas rapidly growing energy sources, according to new information on Bitcoin mining.

The Cambridge Center for Alternative Finance (CCAF) on Tuesday released a major update to the Cambridge Bitcoin Electricity Consumption Index (CBECI), a data source based on Bitcoin mining.

According to data from Cambridge, fossil fuels such as coal and natural gas accounted for two-thirds of Bitcoin’s electricity mix in January 2022, more than 62%. Thus, the share of sustainable energy sources in BTC’s energy mix reached 38%.

The new study suggests that coal alone will account for 37 percent of Bitcoin’s total electricity consumption as of early 2022, making it the largest single energy source for BTC mining. Among the renewable energy sources, hydropower is found to be the largest resource, accounting for approximately 15%.

Although Bitcoin mining relies on coal and hydropower, the share of these energy sources in the total BTC energy mix has been declining over the past several years. In the year By 2020, coal will power 40% of global BTC mining. Hydropower’s share has more than halved from 2020 to 2021, from 34 percent to 15 percent.

Bitcoin mining electricity mix from 2019 to 2022. Source: CCAF

In contrast, the role of natural gas and nuclear energy in Bitcoin mining has grown, especially in the last two years. The share of gas in the BTC electricity mix increased from about 13% in 2020 to 23% in 2021, while the percentage of nuclear energy increased from 4% in 2021 to about 9% in 2022.

According to Cambridge analysts, Chinese miners were the main reason behind the major fluctuations in Bitcoin’s energy mix in 2020 and 2021. mix. As previously reported, Chinese authorities have shut down several crypto mining farms powered by hydroelectric power in 2021.

“The Chinese government’s ban on cryptocurrency mining and the shift of Bitcoin mining activity to other countries have negatively impacted Bitcoin’s environmental footprint,” the study noted.

The analysts also emphasized that BTC’s electricity mix varies significantly by region. Countries like Kazakhstan are still dependent on fossil fuels, in countries like Sweden, the share of sustainable energy sources in electricity is about 98%.

The addition of nuclear and gas power in Bitcoin’s electricity mix “reflects the shift of mining power to the United States,” the analysts said. According to the US Energy Information Administration, most of the nation’s electricity is generated by natural gas, which accounts for more than 38 percent of the nation’s total electricity production. Coal and nuclear energy are 22% and 19% respectively.

In other insights related to the CBECI update as of September 21, 2022, the study also found that greenhouse gas (GHG) emissions associated with BTC mining accounted for 48 million tonnes of carbon dioxide equivalent (MTCO2e) as of September 21, 2022. This is 14 percent less. In the year from the projected GHG emissions in 2021. According to the study’s estimates, the current rate of GHG emissions associated with Bitcoin is about 0.1% of global GHG emissions.

Combining all the previously mentioned findings, the indicator estimates that in mid-September, 199.6 MtCO2e can be attributed to the Bitcoin network since its inception. The analysts noted that 92% of emissions have occurred since 2018.

Total greenhouse emissions associated with Bitcoin as of mid-September 2022. Source: CCAF

As previously reported, CCAF is working on CBECI as part of a multi-year research initiative known as the Cambridge Digital Assets Program (CDAP). CDAP’s institutional partners include British International Investment, Dubai International Finance Centre, Accenture, EY, Fidelity, Mastercard, Visa and other financial institutions.

Related: Bitcoin Could Be A Zero Emission Network: Report

The new CDAP findings differ from the data of the Bitcoin Mining Council (BMC), which in July estimated sustainable sources in the Bitcoin electricity mix at about 60%.

“It doesn’t include nuclear or fossil fuels, so it could indicate that 30-40% of the industry is powered by fossil fuels,” Bitfarms Chief Mining Officer Ben Gagnon told Cointelegraph in August.

According to Alexander Nummüller, project leader at CBCI, CDAP’s approach is different from that of the Bitcoin Mining Council when it comes to estimating the Bitcoin electricity mix.

“We use our mining map data to see where bitcoin miners are located, and we analyze the electricity mix of the country, state or territory. As I understand it, the Bitcoin Mining Council requires its members to self-report this information in a survey,” said Nummuller. Still, he noted that there were a few discrepancies in the study related to lack of data.