Life cycle assessment of behind-the-meter Bitcoin mining at US power plant

Abstract

Purpose Due to its highly energy-intensive process, Bitcoin has attracted the global attention of climate research and media. At the time of this submission, behind-the-meter Bitcoin mining has gained significant traction; however, not a single environmental impact assessment has been conducted on this type of operation. This study seeks to fill the gap, applying the established Life Cycle Assessment methodology to estimate the environmental footprint of a single case study. Methods A life cycle assessment methodology of a natural gas power plant mining Bitcoin behind-the-meter in the state of New York following the ISO 14040 guidelines was applied. The functional unit (FU) is defined as the attributed generation capacity of 14 MW over the course of a regular full-calendar year in the attributional model. The FU is scaled to 22 MW and 104 MW in the predictive models to represent planned expansion. The TRACI 2.1 method was applied to characterize the environmental impact. The environmental impact categories considered in this study included global warming, acidification, smog formation, and particulate emissions. Results and discussion Located in New York State, Greenidge LLC, a natural gas power plant produces an estimated 88,440 metric tons of CO 2 -eq per year to mine Bitcoin behind-the-meter. Annual emissions would total 656,983 metric tons of CO 2 -eq if the plant devotes 100% of its generation to Bitcoin mining. The primary driver of greenhouse gas emissions is the generation of electricity itself, accounting for ~ 79% of the total emissions. At full capacity, annual emissions are comparable to the annual emissions of 140,000 passenger vehicles or the emissions resulting from the burning of 600 million lb of coal. Further, additional planned cases could produce an estimated 1.9 million tons tCO 2 -eq per annum. Conclusions Behind-the-meter Bitcoin mining makes the power plant a significant contributor to global warming at a time when New York State is attempting to radically reduce its greenhouse gas emissions by 85% by 2050 and to have 100% carbon-free electricity by 2040. The environmental impact of this business model is not limited to individual sites but is spread out over upstream impacts as well. In combination, we see that behind-the-meter Bitcoin mining not only goes against local climate initiatives but also poses a significant danger to national initiatives due to feasible scalability, caused by an availability of existing infrastructure and favorable financials. Supplementary information The online version contains supplementary material available at 10.1007/s11367-022-02025-0.

Renewable Energy Transition Facilitated by Bitcoin

“…In June 2022, the gas-fired Greenidge power plant, at Seneca Lake, N.Y., U.S.A., was denied a permit renewal to operate since the significant fraction (up to 55%) of its power output has been used for behind-the-meter bitcoin mining. 45,46 Naturally, exploitation of fossil fuels to power bitcoin mining is questionable and experiences regulatory pressure. Originally a coal-fired facility, Greenidge was recommissioned in 2017 as a natural gas power plant and since 2020 utilized bitcoin mining to monetize off-peak periods, during which they struggled to sell electricity to the grid at a profit.…”

Can Bitcoin Stop Climate Change? Proof of Work, Energy Consumption and Carbon Footprint (SoK)

“…Note that fossil energy subsidies, which artificially undercut This does not completely exclude forms of decarbonizing regulatory unfriendliness. For instance, Roeck and Drennen [13] argue that miners should be forced to maintain a high renewable content to drive miners into greener areas ("carbon leakage").…”

“…In this regard, the state of the art is limited. Although many have sought to estimate Bitcoin's carbon footprint (see II), only a limited number of papers have put their focus in bitcoin and flexible load response [13], [14]. The work is still in embryonic stages, highly contested and not systematized.…”

“…Cases such as Iran [20], Kazakhstan [11], [16], [21], parts of China, [3], [13], [16], Venezuela [21] and parts of the United States (US) and Canada [11], [16] (where outdated, inefficient natural gas power plants are retrofitted for bitcoin mining [13], although criticism is sometimes also levied when the energy source is green, as it is no longer available for other uses [22]) usually star these concerns.…”

Bitcoin ile Karbon Emisyonu İlişkisi: Doğrusal Olmayan Eşbütünleşme Analizi

“…In this context, Mora et al (2018) mentioned in their study that if the adoption of Bitcoin increases, global warming will create an electricity demand that will cause an increase of 2 °C in the next ten years. Köhler and Pizzol (2019) and Roeck and Drennen (2022) claimed that Bitcoin mining increases energy consumption and consequently threatens climate change mitigation practices. Mohsin et al, (2020) concluded that there is a bidirectional causality relationship between the VECM model and the volume of cryptocurrencies and environmental degradation in the short and long run.…”