To power their mining operations, Bitcoin miners purchase electricity from conventional and renewable energy sources or develop and run their own renewable energy facilities, turning them into energy consumers.
Miners often buy electricity from energy providers, such as utility companies or independent power producers, to mine BTC. They then use that electricity to power their mining equipment. This can include both traditional energy sources, such as coal or natural gas, as well as renewable energy sources, such as solar or wind power.
Hydro-Quebec, a Canadian utility that sells electricity to Bitcoin miners, is a real example of how Bitcoin miners act as buyers of power. To take advantage of low electricity prices in the province, the company has been actively courting Bitcoin miners to set up operations there and use excess hydroelectric power to mine BTC.
In some circumstances, miners may also enter into long-term agreements with energy providers, which could give them access to a more reliable and consistent source of electricity. Large-scale miners can benefit the most from this as it allows them to plan and budget for their power needs in advance.
By establishing and managing their own renewable energy facilities, such as solar or wind farms, Bitcoin miners can also take on the role of energy users and function as energy buyers. By doing this, they support the shift to sustainable energy sources and secure power for their mining activities.
For example, a Bitcoin miner called Genesis Mining has set up operations in Iceland and is running them using geothermal and hydroelectric power. This allows the miner to benefit from Iceland’s abundant renewable energy resources and lessen their environmental impact. Additionally, one of the world’s largest Bitcoin mining facilities, KnCMiner, is powered by a wind farm the company developed on its own land in Sweden.
To make use of additional energy that would otherwise go to waste, miners may also choose to locate their mining operations next to existing renewable energy facilities, such as hydroelectric dams or geothermal plants. For example, Bitcoin miner Greenidge Generation in upstate New York, USA, generates electricity for its mining operations using extra natural gas from a local power plant. The company also built a 7-megawatt solar farm to help meet its energy needs.
