According to new data, the electricity mix for Bitcoin (BTC), has dramatically changed in the last few years. New data shows that nuclear energy and natural gas have become the fastest-growing energy sources for Bitcoin mining.
Tuesday’s major update by the Cambridge Centre for Alternative Finance (CCAF), to its Bitcoin-dedicated data source, The Cambridge Bitcoin Electricity Consumption Indice (CBECI), was released by the Cambridge Centre for Alternative Finance.
Cambridge data shows that fossil fuels such as coal and natural gas accounted for almost two-thirds (or more than 62%) of Bitcoin’s electricity mix in January 2022. The BTC energy mix had 38% of its energy from sustainable sources.
According to the new study, coal was responsible for almost 37% of Bitcoin’s electricity consumption in early 2022. This makes it the largest energy source for BTC mining. Hydropower, which accounts for roughly 15% of all sustainable energy sources was the most abundant.
Although Bitcoin mining heavily relies on hydropower and coal, their shares in the total BTC energy mix has been declining over the last several years. Global Bitcoin mining was 40% powered by coal power in 2020. Hydropower’s share dropped from 34% to 15% between 2020 and 2021.
Mixture of Bitcoin mining electricity from 2019 to 2022 Source: CCAF
The role of natural gas, and nuclear energy in Bitcoin mining have been steadily increasing over the last two years. The BTC electricity mix has seen a rise in gas usage from 13% to 23% in 2020 and nearly 9% to 9% in 2022.
According to Cambridge analysts, sharp fluctuations in Bitcoin’s energy mix in 2020-2021 were caused by Chinese miner relocations. China’s crackdown against crypto in 2021, and associated miner migration, resulted in a significant drop in hydroelectric power in BTC’s energy mix. According to previous reports, Chinese authorities closed down several crypto mining farms that were powered by hydroelectricity in 2020.
The study concluded that the ban by the Chinese government on cryptocurrency mining and the subsequent shift in Bitcoin mining activity towards other countries had a negative impact on Bitcoin’s environment footprint.
Analysts also stressed that the mix of BTC electricity varies greatly depending on where it is generated. While countries such as Kazakhstan still heavily rely on fossil fuels for electricity generation, Sweden has a 98% share of renewable energy sources.
Analysts stated that the surge in nuclear and natural gas energy in Bitcoin’s electricity mix is a result of the “shift of miner power towards the United States.” The U.S. Energy Information Administration stated that the majority of electricity generated in the country was produced by natural gas. This accounted for over 38% of total electricity production. The remaining 22% and 19% were made up of coal and nuclear energy, respectively.
The latest CBECI update also revealed that BTC mining was responsible for 48 million tonnes of carbon dioxide equivalent (MTCO2e). This is 14% less than the 2021 GHG emissions. The study estimates that Bitcoin’s current GHG emissions amounts are approximately 0.1% of global GHG emission levels.
All the above-mentioned findings combined, the index estimates that the Bitcoin network has accounted for approximately 199.6 million tonnes CO2e since its inception. Analysts stressed that 92% of all emissions occurred between 2018 and 2018.
As of mid-September 2022, total greenhouse emissions from Bitcoin. Source: CCAF
As previously reported, CBECI has been a focus of the CCAF’s multi-year research project known as the Cambridge Digital assets Programme (CDAP). British International Investment, Dubai International Finance Centre, Accenture and EY are some of the institutions that have collaborated with the CDAP, along with financial institutions such as Visa, Mastercard, Visa, Fidelity, Mastercard and Visa.
Related: Bitcoin could be a zero-emissions network: Report
The CDAP results are noticeably different from the data provided by the Bitcoin Mining Council, (BMC) which in July estimated that the Bitcoin electricity mix was almost 60% sustainable sources.
“It doesn’t include fossil fuels so that can be interpreted as implying that around 30%-40% of the industry is powered from fossil fuels,” Bitfarms chief mine officer Ben Gagnon stated to Cointelegraph in August.
Alexander Neumueller (CBECI project leader) said that the CDAP approach to estimating Bitcoins electricity mix is different than the Bitcoin Mining Council.
“We use information from the mining map to locate Bitcoin miners, then we examine the electricity mix in each country, state or province. Neumueller explained that the Bitcoin Mining Council requires its members to report this information in a survey. He mentioned that there were still some nuances to the lack of data in this study.
Eileen Wilson –Technology and Energy
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