On Tuesday, the Cambridge Centre for Alternative Finance (CCAF) released a major update to its Bitcoin mining-dedicated data source, the Cambridge Bitcoin Electricity Consumption Index (CBECI), highlighting that fossil fuels like coal and natural gas made up almost two-thirds of Bitcoin’s total electricity mix as of January 2022, which accounts for more than 62%, while the share of sustainable energy sources amounted to 38% of the Bitcoin energy mix. According to a report on Cointelegraph.com, the new study suggests that coal alone accounted for nearly 37% of Bitcoin’s total electricity consumption as of early 2022, which makes it the largest single energy source for Bitcoin mining, while among sustainable energy sources, hydropower was found to be the largest resource, with a share of 15% roughly.
The way the news outlet explains it, despite Bitcoin mining relying heavily on coal and hydropower, the shares of these energy sources in the total Bitcoin energy mix have been dropping over the past several years, adding that in 2020, coal power powered 40% of global Bitcoin mining, while hydropower’s share has more than halved from 2020 to 2021, tumbling from 34% to 15%, respectively. Meanwhile, in contrast, the role of natural gas and nuclear energy in Bitcoin mining has been growing notably over the past two years, as pointed out by Cointelegraph, with the share of gas in the Bitcoin electricity mix surging from about 13% in 2020 to 23% in 2021, while the percentage of nuclear energy increased from 4% in 2021 to nearly 9% in 2022.
The analysts also emphasized how the Bitcoin electricity mix varies hugely depending on the region, as mentioned by the news outlet, with countries such as Kazakhstan still relying heavily on fossil fuels, while in countries such as Sweden, the share of sustainable energy sources in electricity generation is about 98% at the moment. Cointelegraph goes on to note that the surge of nuclear and gas energy in Bitcoin’s electricity mix allegedly reflects the “shift of mining power towards the United States,” the analysts state, while according to the U.S. Energy Information Administration, most of the nation’s electricity was generated by natural gas, which accounted for over 38% of the country’s total electricity production, with coal and nuclear energy accounting for 22% and 19%, respectively.
As indicated by Cambridge analysts, Chinese miner relocations were a major reason behind sharp fluctuations in Bitcoin’s energy mix in 2020 and 2021, the news outlet shares, with China’s crackdown on crypto in 2021 and the associated miner migration resulting in a major drop in the share of hydroelectric power in the Bitcoin energy mix. Chinese authorities shut down a number of crypto mining farms powered by hydroelectricity in 2021, as previously reported by Cointelegraph, with the study saying, “The Chinese government’s ban on cryptocurrency mining and the resulting shift in Bitcoin mining activity to other countries negatively impacted Bitcoin’s environmental footprint.”
The CCAF has been working on CBECI as part of its multi-year research initiative known as the Cambridge Digital Assets Programme (CDAP), the news outlet adds, with CDAP’s institutional collaborators including financial institutions such as British International Investment, the Dubai International Finance Centre, Accenture, EY, Fidelity, Mastercard, Visa and others. As highlighted by Cointelegraph, among other insights related to the latest CBECI update, the study found that greenhouse gas (GHG) emissions associated with Bitcoin mining accounted for 48 million metric tons of carbon dioxide equivalent (MtCO2e) as of September 2022, which is 14% lower than the estimated GHG emissions of 2021.
- OnTuesdayTheCambridgeCentreForAlternativeFinance(CCAF)ReleasedMajorUpdateToItsBitcoinMiningDedicatedDataSourceTheCambridgeBitcoinElectricityConsumptionIndex(CBECI)HighlightingThatFossilFuelsLikeCoalAndNaturalGasMadeUpAlmostTwoThirdsOfBitcoin'sTotalElectricityMixAsOfJanuary2022whichAccountsForMoreThan62%whileTheShareOfSustainableEnergySourcesAmountedTo38%ofTheBitcoinEnergyMix
- TheStudyShowsCoalAloneAmountedForAbout37%ofBitcoin’sTotalElectricityConsumptionAsOfEarly2022makingItTheLargestSingleEnergySouceForBitcoinMiningWhileAmongSustainableEnergySourcesHydropowerWasTheLargestResourceWithItsShareOfRoughly15%;DespiteBitcoinMiningRelyingHeavilyOnCoal&HydropowerTheSharesOfTheseEnergySourcesInTheTotalBitcoinEnergyMixHaveBeenFallingOverThePastYear
- TheAnalystsReportedlyEmphasizedHowTheBitcoinElectricityMixVariesHugelyDependingOnTheRegionWithCountriesSLikeKazakhstanForExampleStillRelyingHeavilyOnFossilFuelsWhileInCountriesSuchAsSwedenTheShareOfSustainableEnergySourcesInElectricityGenerationIsApproximately98%WithTheSurgeOfNuclearAndGasEnergyInBitcoin’sElectricityMixAllegedlyReflectingTheShiftOfMiningPowerToTheUnitedStates
https://cointelegraph.com/news/nuclear-and-gas-fastest-growing-energy-sources-for-bitcoin-mining-data