Crypto enthusiasts like Jack Dorsey have claimed bitcoin mining can spur a renewable energy revolution despite nearly all evidence to the contrary. But a new collaboration aims to help the industry kick its dirty reputation using tools and techniques that could apply to other polluting industries eventually.
On Monday, Energy Web, which builds operating systems for energy grids, and RMI, a nonprofit researching how to accelerate the energy transition, launched a new approach to evaluating purchases of what are known as renewable energy credits, or RECs. The groups will be focusing on the bitcoin mining industry, which is burning through an increasingly large share of the world's electricity.
While all efforts to switch to zero-carbon energy are generally good, some are better than others. Yet to this point, there has never been a way to measure the precise impact RECs have in creating a more sustainable grid. The new approach, dubbed Green Proofs for BTC, would create a certification process for energy-intensive industries on the path to decarbonizing.
It weighs several factors in determining if a bitcoin mine is actually helping clean up the grid, including the amount of renewables purchased, location and impact on the local grid and the specific renewables operations in determining a credit’s value. The groups point out that an REC from an existing clean energy power plant in California, where the grid is already well on its way to decarbonizing, is less valuable than one investing in clean energy generation in Poland, where coal is still in heavy rotation.
“With this approach, we can create an environment where more impactful renewable energy purchases are recognized,” Jesse Morris, CEO of Energy Web, told Protocol.
“We can do better,” Morris added. “By rewarding purchases of more impactful renewables, we can drive more money to renewable energy projects creating the most impact.”
While the approach is theoretically applicable to any electricity-hungry sector where REC purchases are widespread, the groups are using bitcoin mining as a case study. Mining the cryptocurrency has come under intense scrutiny from both the public and regulators given its ballooning carbon footprint. Energy Web and RMI have created the Crypto Climate Accord, which aims to get crypto miners in line with the Paris Agreement targets, and the groups say the new monitoring approach for RECs will "complement" that and other efforts to clean up the industry.
Eventually, the groups plan to create a certification program to credential renewable mining and hosting operations, which will assess a mine’s actual emissions and the emissions that its REC purchases mitigate. Assuming all goes smoothly, both the approach and the certification process can be essentially copy-and-pasted for other industries, with some tweaks of baseline electricity consumption.
Morris said the cryptocurrency sector is well-suited as a trial run because of the need for speed. The field is new enough that companies are willing to change on a dime and take some risks, whereas legacy electricity or data companies can be sluggish, and in many cases have taken decades to figure out how to reduce their emissions. A number of bitcoin miners advised Energy Web and RMI in developing the approach.
“The crypto industry, and Bitcoin in particular, is under immense pressure to go 100% renewable,” said Morris. “If crypto can be at the bleeding edge of innovation in decarbonizing the grid, it will go a long way towards eliminating the black eye the industry has gotten on the carbon-footprint front.”
RMI and Energy Web are currently soliciting stakeholder input until June 10.