Thread by @ShaunEnergy

1/n

A thread on the energy transition, batteries and flexible #bitcoin mining loads …

Achieving net zero emissions means electrifying everything and adding new wind & solar that is clean - but unreliable

This creates a challenge to meet demand when wind & solar are low

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2/n

In IEA’s Net Zero Emissions by 2050 scenario, both Demand Response (DR) & Batteries will have an oversized role in providing flexibility to power systems comprised of mostly of intermittent wind and solar

3/n

Both DR and Batteries are BOTH essential to decarbonizing power grids

That said, there are some use cases where a battery is superior (such as on-site back-up power) and some where a controllable load is superior

Here is one of those examples …

4/n

Imagine your in West Texas on a windy and sunny day where all the power lines that could move power from West Texas to the major load centers are full - resulting in wind curtailments and negative power prices in West Texas

5/n

Let’s assume there is 1,000MWs of wind being curtailed every hour & the wind is expected to be equally strong for next 5 days

w/out batteries or controllable loads, 1000MWs of wind/solar would be curtailed/wasted every hour of the day, for 5 days straight (120,000MWhs)

6/n

In this hypothetical scenario, West Texas lacks power system flexibility to absorb excess renewables & improve price economics

Generation flexibility in power systems is based on:
1) absolute power output range (MW)
2) ramp rate (MW/min) &
3) energy level continuity (MWh)

7/n

First up is the battery

Let’s assume that this is worlds first and largest 1000MW, 4 hour battery (can store 4,000MWh’s)

On day 1, hour 1, the battery will charge at 1000MWs for 4 straight hours - resulting in 4000MWhs of total charge

8/n

The batteries increase in demand causes electricity prices to be less negative

At the start of hour 5, the battery is fully charged which reduces grid demand and causes prices to go further negative

9/n

With the battery full, available options are 1) discharge energy - which increases supply & causes prices to go deeper negative or 2) do nothing & wait for an opportunity to discharge when the wind output is lower and prices are higher - which could be 5 or 6 days from now

10/n

Next up is DR

Let’s assume this is a 1,000MW controllable bitcoin mining load

On day 1, hour 1, the CLR will begin consuming 1000MWs of power & will continue consuming 1000MWhs of power each hour, every hour until power prices go above the miners $200/MWh breakeven cost

11/n

Battery Results

Over the course of the 5 day period, the battery consumed a total of 4,000MWhs over a 4 hour period on day 1 and helped improve renewables economics for 4 of the 120 hours

12/n

DR/CLR Results
Over the the 5 day period, the CLR consumed a total of 120,000MWhs (30X more energy compared to the battery) over a 120 hour period and helped improve renewables economics for all 120 hours …

13/n

DR/CLR Results

Instead of wind being curtailed with prices being deeply negative, an additional 120,000MWhs of wind gen was consumed - which raised the hourly power price paid to West Texas generation & creates a price signal to buildout more wind & solar

Winner - CLR

14/

#Bitcoin Mining as flexible load could be best described as “Valley Filing”

The valley represents approximately 95% of the total load area with the peak being 5%

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15/n

Over past 5 years in W.Texas,95% of all hours were under $100,w/5% priced negative

#Bitcoin miners can help with “valley filling” to improve renewables economics by shifting left tail into the middle

Btw, over past 3 years, the breakeven for S9 miner averaged $95/Mwh

End+Punchline

The energy transition is in motion & picking up speed

Decarbonizing power systems while doubling load growth requires 4X more flexibility

Both batteries and DR/CLR will have an oversized role in providing flexibility

#Bitcoin mining is the ultimate flexible load