TLDR:
TEPCO subsidiary Agile Energy X is exploring Bitcoin mining using surplus renewable energy in Japan
The project aims to prevent wasted energy from curtailment practices and promote more green energy use
Simulations show significant potential for utilizing excess renewable power for profitable Bitcoin mining
Similar initiatives are already underway in the US, particularly in Texas
The project could provide new revenue streams for renewable energy producers
Tokyo Electric Power Company (TEPCO) subsidiary Agile Energy X is venturing into Bitcoin mining as a means to harness excess renewable energy that would otherwise go to waste.
This innovative approach aims to promote the widespread use of green energy in Japan while potentially creating a new revenue stream for power producers.
Kenji Tateiwa, president of Agile Energy X, explained that the project was inspired by Japan’s “output control” practices, where renewable energy production is sometimes curtailed to balance supply and demand or manage transmission constraints.
In 2023, these practices resulted in 1,920 gigawatt-hours of wasted power across Japan, equivalent to the annual consumption of 450,000 households.
To address this issue, Agile Energy X has installed Bitcoin mining machines near solar farms in Gunma and Tochigi prefectures, close to Tokyo. These installations are designed to capture and utilize energy that might otherwise be wasted during periods of oversupply.
The potential for this approach is significant. Agile Energy X’s simulations suggest that if renewable energy were to account for 50% of Japan’s power supply, up to 240,000 gigawatt-hours could be wasted annually through curtailment.
The company estimates that using just 10% of this surplus power for Bitcoin mining could generate approximately 360 billion yen ($2.5 billion) in Bitcoin each year.
Tateiwa believes that the success of this framework could encourage the introduction of more renewable energy into Japan’s power grid. “If Bitcoin mining were to produce profits that could be fed into corporate earnings, that would stabilize corporate management, prompting more green energy to be introduced,” he stated.
The concept is not entirely new. Similar initiatives are already underway in the United States, particularly in Texas, where renewable energy is being used for grid balancing and Bitcoin mining.
These projects have contributed to the United States becoming a world leader in Bitcoin mining.
However, the current scale of output control in Japan is not yet sufficient to make Bitcoin mining with surplus power consistently profitable. Tateiwa anticipates that as more green energy is introduced and more surplus power becomes available, the practice will become economically viable.
The project also addresses criticisms of Bitcoin mining’s energy consumption. By utilizing excess renewable energy that would otherwise be wasted, this approach could help mitigate concerns about the cryptocurrency’s environmental impact.
For renewable energy producers, Bitcoin mining could provide a new source of income, potentially encouraging further investment in green energy projects. “Green energy producers have to operate their businesses on the assumption that part of the power they generate is wasted,” Tateiwa explained. “If bitcoins were to provide a new source of income for similar power producers, who are being exposed to overinvestments, that would prompt more green energy to be introduced.”
As Japan works towards its goal of achieving carbon neutrality by 2050, with green energy expected to account for 50-60% of the country’s total power supply, innovative solutions like this could play a crucial role in managing the intermittent nature of renewable energy sources.
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