Nuclear and gas fastest growing energy sources for Bitcoin mining: Data


Bitcoin’s (BTC) electricity mix has changed dramatically over the past few years, with nuclear power and natural gas becoming the fastest-growing energy sources powering Bitcoin mining, according to new data.

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

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

The new study suggests that coal alone accounted for nearly 37% of Bitcoin’s total electricity consumption by early 2022, becoming the largest single energy source for BTC mining. Among sustainable energy sources, hydropower was found to be the largest resource, with a share of around 15%.

Despite Bitcoin mining being significantly dependent on coal and hydropower, the shares of these energy sources in the overall BTC energy mix have declined over the past several years. In 2020, coal power powered 40% of global BTC mining. The share of hydropower more than halved from 2020 to 2021, falling from 34% to 15%.

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

In contrast, the role of natural gas and nuclear power in Bitcoin mining has particularly grown over the past two years. The share of gas in BTC’s electricity mix increased from around 13% in 2020 to 23% in 2021, while the percentage of nuclear power increased from 4% in 2021 to almost 9% in 2022.

According to Cambridge analysts, Chinese miner relocations were a main reason behind sharp fluctuations in Bitcoin’s energy mix in 2020 and 2021. The removal of China against crypto in 2021 and the related miner migration resulted in a significant drop in the share of hydroelectric power in the BTC energy to mix As previously reported, Chinese authorities have shut down some crypto mining farms powered by hydroelectricity in 2021.

“The Chinese government’s ban on cryptocurrency mining and the resulting shift in Bitcoin mining activity to other countries has negatively impacted Bitcoin’s environmental footprint,” the study suggested.

The analysts also emphasized that BTC’s electricity mix varies greatly depending on the region. Countries like Kazakhstan continue to rely heavily on fossil fuels, while in countries like Sweden, the share of sustainable energy sources in electricity production is approximately 98%.

The increase in nuclear and gas power in Bitcoin’s power mix is ​​thought to reflect the “shift of mining power to the United States,” the analysts stated. According to the US Energy Information Administration, most of the nation’s electricity was generated by natural gas, which accounted for more than 38% of the country’s total electricity production. Coal and nuclear energy accounted for 22% and 19% respectively.

Among other insights related to CBECI’s latest update, 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. That is 14% lower. than the estimated GHG emissions in 2021. According to the study’s estimates, the current GHG emissions levels related to Bitcoin represent approximately 0.1% of global GHG emissions.

Combining all the aforementioned findings, the index estimates that as of mid-September, around 199.6 MtCO2e can be attributed to the Bitcoin network since its inception. The analysts highlighted that around 92% of all emissions have taken place since 2018.

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Total greenhouse emissions related to Bitcoin as of mid-September 2022. Source: CCAF

As previously reported, the CCAF has been working on CBECI as part of its multi-year research initiative known as the Cambridge Digital Assets Program (CDAP). The institutional collaborators of the CDAP include financial institutions such as British International Investment, the Dubai International Finance Centre, Accenture, EY, Fidelity, Mastercard, Visa and others.

Related: Bitcoin could become a zero-emission network: Report

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

“It doesn’t include nuclear or fossil fuels, so from that you can imply that about 30-40% of the industry is powered by fossil fuels,” Bitfarms chief miner Ben Gagnon told Cointelegraph in August.

According to CBECI project manager Alexander Neumueller, the CDAP’s approach differs from the Bitcoin Mining Council when it comes to evaluating Bitcoin’s electricity mix.

“We use information from our mining map to see where Bitcoin miners are located, and then examine the electricity mix of the country, state or province. As I understand it, the Bitcoin Mining Council asks its members to self-report this data in a survey,” Neumueller stated. He also mentioned that there are still some nuances related to the lack of data in the study.