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The explosive growth of artificial intelligence, cloud computing, and digital finance has transformed electric industry operations.\u00a0 Forward-thinking miners and utilities can leverage these technological shifts to build generation capacity and create more resilient electrical grids.<\/p>\n
Data centers locate where speed of energization, connectivity, and operational costs align favorably, but speed of energization remains a significant challenge.\u00a0 North American data center leasing vacancy rates are below 2% in 2024, down from over 10% in 2018. End-users now pre-lease capacity years in advance as new generation is slow to energize.<\/p>\n
Unlike traditional load growth that materializes gradually over years, data centers demand immediate energy solutions.\u00a0 This creates a difficult position for some electric utilities with typical new generation planning\u2014build when demand is reliably certain to arrive.<\/p>\n
New electricity generation projects can require 2-7 years development time, while major data center deployment has compressed requirements of 18-24 months.\u00a0 Some utilities fund new generation ahead of need, but that typically leads to subsidizing projects until new load arrives, increasing costs for existing customers.<\/p>\n
Many are already aware of bitcoin mining\u2019s value proposition of demand management, excess energy conversion (flared gas, etc.) and remote energy resource access.<\/p>\n
Demand Management<\/strong>: Mining operations can be curtailed during peak demand periods more easily than traditional loads, serving as valuable demand response resources necessary for grid balancing, particularly useful when variable generation resources are connected to the grid.<\/p>\n Wasted Energy Conversion<\/strong>:\u00a0 Companies take energy that would have otherwise been wasted\u2014such as flared gas at oil production facilities\u2014and convert it to electricity for bitcoin mining operations.<\/p>\n Stranded Asset Utilization<\/strong>: Similar to wasted energy conversion, mining operations can monetize remote generation resources that would otherwise be underutilized due to transmission constraints, internet connectivity, or economic conditions.<\/p>\n What I am writing about is an overlooked opportunity:\u00a0 Bitcoin mining\u2019s unique load profile provides value through the ability to build new resources ahead of need, avoiding subsidization by existing customers, and allowing distributed transmission construction compatible with data center growth.<\/p>\n Strategic deployment of bitcoin mining as partners in new generation construction transforms build-ahead economics\u2014mining operations create load from facility energization.\u00a0 When public utilities build new generation and partner with mining operations, they can create new revenue upon energization.\u00a0 This has multiple benefits:<\/p>\n Utilities that plan for new generation today can factor in partnerships with bitcoin mining companies, even if other loads are not on the horizon, and can scale mining operations to fit new generation size.\u00a0 Miners take bitcoin price and mining difficulty risk in exchange for long-term beneficial electricity rates.\u00a0 This provides the utility with sufficient load certainty to fund construction projects that would have otherwise not been available, and gives miners access to long-term funding for business expansion.\u00a0\u00a0<\/p>\n More new generation when energy production growth is a national competitive interest benefits everyone.<\/p>\n Additionally, by building generation for just-in-time miner loads, subsidization of new generation by existing utility customers becomes a thing of the past.\u00a0 As power purchase agreements end and new load arrives to the region, energy transitions to other long-term off-takers.<\/p>\n Additionally, as new load arrives, transmission infrastructure is built to suit, again, not requiring subsidization of arriving loads by existing ratepayers.\u00a0 Infrastructure can be built as needed, where needed, resulting in more geographically dispersed load points and reducing grid congestion.<\/p>\n A partnership between electric utilities and bitcoin mining companies opens value within utility service territories with abundant small to medium untapped generation resources by energizing resources now, at a time when tapping new resources is dearly needed.<\/p>\n New generation projects that partner with mining companies provide revenue at energization, tapping unused resources, leading to lower system-wide rates and ensuring local ratepayers benefit directly from local resources, creating jobs and new business opportunities.<\/p>\n Electricity\u2019s value far exceeds its cost per kilowatt-hour, and partnerships forged between bitcoin mining companies and electric utilities provide an amazing chance to build power plant capacity that will fuel local business, strengthen communities and power entire nations.<\/p>\nBUILD-AHEAD TO OVERCOME TIMING MISMATCHES<\/h2>\n
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THE PARTNERSHIP ADVANTAGE<\/h2>\n