Thread by @level39

🧵THREAD: As energy grids adopt a greater percentage of intermittent renewables, more power must be absorbed by demand response loads. Prices act as signals help balance the grid, #Bitcoin mining profitability responds like noise cancellation technology. /1

Most people take power grids for granted. You turn on a light switch and it "just works." In order for your local utility to provide reliable power, excess energy always needs to be available. Reliable power grids require redundancies that can be quickly dispatched. /2

Power grids in North America need to maintain a "heartbeat" of 60Hz. This heartbeat can drift when energy supply and demand are mismatched—causing cascading issues and even damage equipment. #Bitcoin can act as a controllable load for (PFR) Primary Frequency Response /3

In the past, grid operators had a relatively easier time balancing the grid when generation was mostly from fossil fuels. As power grids adopt more intermittent renewables, reliable generation becomes more challenging and unpredictable. /4

To deal with the unreliability of intermittent renewable energy, power grids need dispatchable generation—sources of electricity that can be dispatched on demand at the request of power grid operators, according to market needs. Often this means reliable natural gas. /5

Batteries are good deployable dispatchable generation, and we need more of them, however batteries have limitations. Even the largest batteries in the world cannot solve all of the challenges on modern grids. We need other solutions, including Bitcoin. /6

Other forms of reliable power generation, such as hydro and nuclear could be dispatched to backup the grid, however their resources would sit wasted and unused when they were on standby. For example, nuclear reactors are not flexible and can take hours to come online. /7

#Bitcoin mining can turn an inflexible nuclear power plant into dispatchable generation by absorbing the standby power when no one else needs it and instantly turning down when the grid needs the power. No other technology can match this rapid responsiveness. /8

Modern energy supply and demand are constantly fluctuating. Grid operators will increasingly use price signals to make industries and devices "smart" so the they consume power when grid has excess energy and turn down when the grid has too little. /9

While smart devices will become more prevalent, very few industries can be as "smart" or as quick as #Bitcoin mining. For example, a steel plant cannot just shut down its melt shop for more than a few hours. The steel would harden before if can be rolled. /10

#Bitcoin miners buy their energy in advance and use insurance products that allow them hedge price fluctuations. If the cost of energy gets too high, they get paid to turn off their machines. /11

When there is excess power on the grid, prices can go negative—meaning demand is so low that the grid operator is willing to pay customers to take the excess energy. As renewable penetration increases, the frequency of negative prices is increasing. /12

Wild claims in the media of supposed mountains of #Bitcoin e-waste are totally unfounded. The truth is that old machines are desirable in places where renewables are in excess and prices can go negative . /13

#Bitcoin's usefulness, as a technology to monetize energy, merges perfectly with Demand Response on modern smart grids. Price signals from grid operators are instantly sensed by #Bitcoin miners, making them like noise cancelling technology for energy grids. /14

#Bitcoin mining also incentivizes energy innovation. Pilot test plants that are thwarted by economies of scale can be monetized in ways that were not previously possible, unlocking new forms of renewable energy for humanity. /15

An example of this is OTEC. Innovators @NateHawaii and @MichaelHawaii are working to unlock the thermal energy of the oceans—to bring clean base load power to 1 Billion people. This is only possible with #Bitcoin's ability to monetize stranded energy. /16 bitcoinmagazine.com/business/bitco…

#Bitcoin mining is a technology that unlocks new forms of energy and moves elsewhere as humanity learns to use those new sources of energy. Life on Earth itself could not have flourished without "Pioneer Species" that do this for all living things. /17

brandonquittem.com/bitcoin-is-a-p…

Just 175 years ago, crude oil was a curiosity. It was a nuisance for landowners—something that fouled up salt mines near Oil Creek, Pennsylvania. It had no economic usefulness other than as a suboptimal medicinal. /18

Today, it is almost impossible to imagine life without oil. It's used in everything from clothing, plastics, roads, and even manufacturing renewable technology. /19

It was not until oil was drilled and properly studied that innovators figured out it could be refined, stored and put to a wide variety of uses. We are at a similar point in history, with #Bitcoin. We are only just beginning to understand it. /20

It's particularly disappointing so many of #Bitcoin's critics willfully ignore its benefits. Look closer and you will find that many critics are paid to spread misinformation about Bitcoin and thwart open payment rails /21 bitcoinmagazine.com/business/quest…

Politicians who claim to be progressive are spending their time creating moral panic over an industry that is too tiny to have any meaningful impact on the climate, while ignoring the necessity of the technology to supporting modern energy grids. /22

#Bitcoin's open payment rails are the only viable chance humanity has for preserving cash-like payments in a digital world that can support minority user rights in a global and neutral manner. /23

Time and time again, naysayers have wrongly dismissed nascent technology to their own peril. It's important to learn about #Bitcoin mining with an open mind and to consider its ability to work in harmony with modern uses of energy. /24

#Bitcoin will humble those who dismiss it. Take the time to learn, to ask questions, to better understanding this complex technology. We are still early in #Bitcoin's moment of discovery. Now, more than ever, is the time to explore it. /25

hope.com/en/resources

To learn more about #Bitcoin’s usefulness on modern energy grids, listen to this episode with @ShaunEnergy. /26

Learn how Duke Energy—one of the largest energy holding companies in the United States—is studying #Bitcoin for demand response, to balance their grid. /27

Addendum: Miners are compensated to turn down, and balance the grid, through financial instruments. They are not paid by the utility to turn down.

Addendum: Negative prices occur in locations that have 1) deregulated wholesale markets with locational prices, 2) excess wind and solar and 3) limited transmission with not enough demand across the entire region. /29

A conversation has emerged on Reddit, about this thread, on why #Bitcoin makes dispatchable renewable generation economical, in a future where batteries are more prevalent. /30

reddit.com/r/Bitcoin/comm…