Green Bitcoin Mining: A game changer for mini-grids in Africa?
The crypto industry has received significant backlash in recent years for the combination of its high power requirements, and fossil fuel consumption.
Achieving universal energy access is a mammoth task which requires continuous innovation by mini-grid companies regarding technology and business models. The largest challenge to be addressed by innovation is the demand risk. Electricity demand development over time depends substantially on factors like “level of entrepreneurship” and “access to capital from family and friends”, which can simply not be assessed prior to electrification. This is the main reason why renewable energy mini-grids are usually over-sized with a capacity that covers any demand potentially developing over time. In addition, e.g. solar-battery mini-grids are designed to cover the demand during rainy seasons resulting in over-capacity during dry season. Mini-grids usually have surplus energy of 20% to 80% of the energy generation capacity.
It is in line with the above that SustainSolar and Earth Wind and Power, a Norwegian company and leading innovator in creating a sustainable bridge between excess energy and the exponentially growing demand for green computing power, signed a Letter of Intent in September 2021 to conduct a pilot study with the aim of improving energy utilisation by turning excess energy from SustainSolar’s off-grid solar installations into green computing power.
Soon thereafter, INENSUS GmbH, a German consulting and engineering firm with a focus on rural electrification joined the team which embarked on the task of demonstrating the viability of bitcoin mining with excess renewable energy in mini-grids. The pilot aims to prove that Bitcoin mining from unused renewable electricity in rural Africa can generate additional revenue for mini-grid and off-grid C&I solar operators across the continent, mitigating the demand risk.
INENSUS is currently piloting its KeyMaker Model in Uganda through its joint venture company Volt-Terra Farm and Energy Solutions Limited, to demonstrate the successful integration of the electricity generation from a mini-grid with local processing and development of local value chains like vanilla and bird’s eye chili (BEC). This pilot is located in Nsambya village, Kayunga district in Uganda and will benefit 174 households, local businesses, primary school, church and mosque through supply of clean energy.
In a first of its kind project, SustainSolar designed, engineered, and delivered the containerised SUSTAIN EXTENDEDTM solar plant, equipped with 60 kWp PV array and 148 kWh of lithium-ion battery storage to the Kayunga district. The system will generate electricity to process high value agricultural crops such as vanilla and BEC in rural Uganda; and yield much socio-economic benefits for the surrounding farming community.
The system’s capacity can handle higher demand than the current expected loads as the uptake from the community is still expected to grow, SustainSolar, Earth Wind and Power and INENSUS saw the opportunity to use what would have been otherwise wasted energy to support crypto mining and in the process generate an additional stream of revenue in form of the leading digital currency – bitcoin. Bitcoin mining only requires the correct hardware, electricity, as well as a stable internet connection. For this pilot project, three second-life ASIC (Application-Specific Integrated Circuit) computers, also known as “miners”, were used, lowering capex for the system while recycling otherwise soon-to-be electronic waste. The pilot was supported with hardware, technical expertise and financing by Earth Wind and Power, who support the initiative to generate positive impact with second-hand data processing hardware.
The crypto industry has received significant backlash in recent years for the combination of its high power requirements, and fossil fuel consumption. This pilot was the perfect opportunity to demonstrate that crypto currency mining can be sustainable and create economic value for mini-grids across the continent.
By design, SustainSolar’s rugged containerised off-grid solar systems are ideally suited to house additional technology solutions like data processors. For this pilot application, Earth Wind and Power’s technical expertise enabled a container to be modified with a separate ventilated compartment, for safe keeping of the miner and to provide optimised airflow in order to dissipate the heat build-up from the data processing operation. Additionally, the same 3G internet connection that provides communication for remote monitoring of the solar and battery management system (BMS), also provides the miners’ connectivity with a bitcoin mining pool.
The pilot, led by SustainSolar, Earth Wind and Power and INENSUS, has been running successfully for several months now and will enter the next phase soon. During the first phase, crypto mining in a remote Africa village with a tropical climate and weak internet connectivity through the mobile network could be verified. In the currently ongoing second stage, the power consumption capacity of the miners is increased to a level where the miners can consume all electricity generated in the mini-grid if running 24/7. This means that the mining power needs to be controlled to prevent power outages for the primary loads. This is accomplished through an Artificial Intelligence (AI) and deterministic optimization-based controller developed by INENSUS. The controller projects demand and supply for the coming 48 hours and regulates the miners up and down accordingly. Example: If the controller knows that the next day there will be more solar power available than the projected consumption from the primary loads and if the batteries are sufficiently charged, the AI controller allows the miners to run through the night off the battery storage, which will then be charged again after sunrise. In case the controller knows that the next day will be cloudy and primary loads will be high, it switches the miners off to conserve energy in the battery for primary load supply. For more information about the controller watch this video: https://inensus.com/what-we-do/#digitalisation
After this successful proof of concept demonstration, the Parties are now moving towards commercialization of their development into the mini-grid market. Based on the pilot’s analysis and long-term bitcoin market data, revenues from bitcoin mining for mini-grid companies range from 0.08 to 0.25 USD/kWh of excess electricity fed into the miners over 5 years. This already includes the depreciation of mining hardware.
The next phase of the pilot will focus on design optimisation (i.e., cooling of the miners to optimise lifespan), maintenance free mining through immersion cooling, selection of miner models (i.e. newer and more efficient miners), business model (i.e. revenue sharing with developers, maximum electricity tariffs, ownership of bitcoin, etc.) and refining the AI controller for various use cases and scenarios.
AUTHORS: SustainSolar, Earth Wind and Power, and INENSUS GmbH