A new report from ESG analyst Daniel Batten has found that more than 50% of the energy used in Bitcoin mining comes from renewable energy sources. The report challenges previous literature from Cambridge Centre for Alternative Finance, which postulated that coal was the primary energy source used by the Bitcoin network.
Batten’s report takes into account off-grid mining and finds that hydro represents 23% of all Bitcoin mining, followed by wind at almost 14%. Batten explains that hydropower is the main source of energy for sustainable mining companies like OceanFalls, Hut8, Iris, Sato, Terawulf, Statar/Lake Parime, Gridshare, Blockfusion, and HPG, with some being entirely powered by it while others use it for the majority of their energy needs.
Gas accounts for 21.14% of Bitcoin mining, while coal is used much less than in electric vehicles (EVs), comprising only 22.92% of the network’s energy consumption. This amount is 38% lower than the energy consumption of EVs.
Sustainability Of Bitcoin Network Increasing At 6.2% Annually
The report notes that the sustainability of the Bitcoin network is increasing at a rate of 6.2% per year, which is expected to cause a decline in the relative percentages of coal, gas, and other fossil fuel sources.
The report’s methodology involved using the CCAF model to identify the on-grid portion of BTC mining and Our World in Data statistics to calculate the breakdown of the on-grid portion by energy source.
The BEEST model was then used to assess exclusions not factored into the CCAF model, such as ERCOT data and off-grid mining data. Finally, each mining company’s sustainable and fossil fuel energy sources were assessed and aggregated.
Batten’s report suggests that Bitcoin mining is not 100% tethered to the grid, meaning that the network’s energy source and emissions may vary from the grid mix of that nation. In contrast, EVs are fully electrified technology, and their emissions arise from using electricity generated using in part fossil fuels.
However, the report concludes that if sustainable energy growth continues to trend upward, the relative percentages of coal, gas, and other fossil fuel sources in the Bitcoin network will likely decline.
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