Bitcoin Miner Makes 700% Profits Selling Power to Grid – Yahoo Canada Finance


(Bloomberg) – On a sweltering summer afternoon in West Texas, a cryptocurrency miner backed by billionaire Peter Thiel shut down his data centers for about 30 minutes. During this short period of time, the company made money not from Bitcoin, but from selling electricity.

On hot windless days, the company, Layer1, can resell its contracted power supplies into the grid for a profit. Recently, when electricity prices in Texas exceeded $ 200 per megawatt hour, Layer1 reaped returns of over 700%, according to its founder and CEO, Alexander Liegl. At night, when electricity prices drop to zero or fall due to excess wind power supply, it can slow operations down as much as circuit boards can handle.

When this happens, “we get paid to produce Bitcoin,” Liegl said. The strategy is part of a trend that is revolutionizing the way large users of electricity interact with the grid. Instead of just passively consuming, tech giants and others are adjusting their operations hour by hour to access the cheapest and, in some cases, the cleanest energy. This decision is not only profitable – it is essential to use more renewable energy. Currently, grids depend on natural gas and other fossil fuels to expand when demand peaks. When heavy users adjust their consumption, wind and solar can handle more of the load.

“Flexible loads and devices are the key to surpassing 50% renewable energy,” said Brian Janous, general manager of energy and sustainability at Microsoft, which works to scale up and scale down data centers by depending on the amount of wind and solar power on the grid to “It’s a necessity. To achieve 70%, 80%, or 100% penetration, you have to orchestrate whatever is attached to the grid.”

Barriers remain. They include utility monopolies that restrict how consumers get their energy in order to protect their own income. And in states that have opened up utilities to competition – primarily the Northeast, California, and Texas – customer usage and network data that could help develop new markets is tightly regulated.

But batteries, smart meters, and artificial intelligence software that help businesses respond to real-time market price signals are all helping accelerate the trend toward renewables. Autonomous microgrids – once an expensive way to keep lights on during power outages for college campuses and hospitals – can now make money by feeding power grids when they need it most.

Regulators have taken note and are cautiously changing the way they value these services for the network.

Google, which buys electricity directly from wind and solar farms near its operations, is now looking for ways to time its use to soak up excess supplies and release power when production stops, Michael said. Terrell, head of energy market strategy at Google. is a very important part of the equation, ”Terrell said. “We moved the tasks to different times of the day. Our plan is to move loads between locations and times. We are now adapting the machines to be ready for this. We are still in the early stages. ”

Bitcoin mining is not a naturally green business. It requires large amounts of electricity, often from fossil fuels. Layer1 has mitigated this, to some extent, by installing itself on a power grid that has more wind power than anywhere else in the U.S. The company is essentially able to act like a powerhouse – increasing and decreasing as depending on network needs. This means that energy intensive companies like her could theoretically eliminate the need for back-up gas production in some areas. Placing data centers near wind farms would also allow them to supplement or take advantage of this source of energy.

Layer 1 in August became one of the first companies to qualify as what the Electric Reliability Council of Texas calls a “controllable load resource,” which means they are paid to reduce their use when they are damaged. need. Texas hasn’t seen wild price spikes this year like it did last summer. But in a grid program, the flexibility of Layer1 still saves him money. The company, which has a long-term contract in place to purchase power, estimates it will save up to $ 6.7 million on its annual electricity bill by cutting output by half an hour during each of the hottest days of June, July and August. By this spring, it plans to install 50 cryptocurrency mining containers at its 30-acre campus west of Midland, Texas, which will consume up to 100 megawatts of electricity. At this rate, he says they can produce around 27 Bitcoins per day, worth around $ 310,000 at recent prices. When he’s not making money with it, at least there’s an electricity market to trade.

“The more capacity, the bigger the size, the more money,” Liegl said.

(Correct timing, details in the 13th paragraph.)

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