Predicting future developments in energy has been a difficult task for experts. Recent predictions for the year 2050 have shown that some experts were wrong in their predictions. One of the most notable examples is the lack of attention paid to demand response crypto mining.
Demand response refers to the ability of customers to adjust their electricity consumption in response to changes in the price of electricity or to incentives offered by utilities or other third parties. The goal of a demand response program is to reduce the need for electricity during periods of peak demand, which can help reduce the load on the electricity grid and lower overall electricity costs.
The need to reduce energy costs
A quiet revolution is happening right now in the field of demand response. Initial data shows that demand response has been a resounding success with a seven-figure number, far exceeding the predicted tens of thousands. This is a significant shift from ten years ago, when demand response was not as popular as a domestic format in the US.
In the UK, demand response has recently made dramatic inroads into the public consciousness. The concept has even entered the lexicon of new words. Last month, Reuters reported that Flexers are the one million electricity consumers who have signed up for the newly launched demand flexibility service. This requires them to use less than their normal energy consumption at pre-notified time intervals.
Energy companies have not fully understood the psychology of ordinary consumers, because they are ready to sacrifice turning on devices on demand in order to save money on high bills. Peter King, head of global energy and utilities at Capgemini Invent, attributes the success of demand response to an overhaul of inflexible software platforms that previously prevented energy companies from engaging in demand response offerings. Additionally, the rise of smart meters has also played a role in the success of demand response.
Crypto mining to the rescue
Another innovation seen in the energy industry is the use of crypto mining, the process of using computing power to verify and record transactions on the blockchain, in response to demand.
In 2021, Marathon Digital Holdings, a Texas-based Bitcoin mining company listed on the NASDAQ stock exchange, came up with an interesting idea. The company located a wind farm in Texas with a generating capacity of 280 MW, but the transmission system could not bring all the output power into the system.
Being an intermittent and steady base load, the crypto mine could draw power from the wind farm and prevent the need to curtail when the wind was at full tilt. This not only stabilizes the output of the wind farm, but also helps to avoid congestion and grid balancing problems during different external loads.
This innovation shows how the energy crisis has brought a more practical and creative approach to energy. This is especially true in Texas, where the market is unregulated and entrepreneurs have an incentive to find new solutions.
Chairman and CEO, Fred Thiel, recognizes the irony of Bitcoin, a technology with a large carbon footprint, being used to save carbon and avoid curtailing renewable energy. However, Thiel remains optimistic about the venture and points to the entrepreneurial spirit that exists in Texas.
MARA saw its share price drop on Friday, January 27th. Shares fell 7.4% to $8.10 after trading as low as $8.09 during mid-day trading. Several research firms have recently weighed in on the stock. Jefferies Financial Group cut the stock from a “buy” rating to a “hold” rating and dropped their target price from $12.50 to $4.00.
Uncharted territory
Crypto mining can have several advantages for power grids. One advantage is that crypto mining can be used as a demand response tool, allowing energy companies to draw power from renewable sources when the grid is at full capacity. This helps to stabilize the production of renewable energy sources and avoid grid congestion.
Another advantage is that crypto mining can help reduce costs for energy companies. By using excess energy to mine cryptocurrencies, energy companies can turn otherwise wasted energy into a source of income.
In addition, crypto mining also has the potential to be a more sustainable source of energy than traditional fossil fuels. This is because it produces no emissions and can be powered by renewable energy sources, which help reduce the carbon footprint of energy production.
Despite the advantages, crypto mining is known to have a high energy consumption. Still, the industry is working to become more sustainable by using renewable energy sources and developing more energy-efficient hardware.
Waiver
BeInCrypto has reached out to the company or individual involved in the story to get an official statement on the recent events, but has yet to hear back.