The electricity mix of Bitcoin (BTC) has radically transformed over the past few years, as the nuclear energy and natural gas becoming the fastest growing energy sources powering Bitcoin mining, according to new data.
The Cambridge Centre for Alternative Finance (CCAF) on Tuesday announced an important update to its Bitcoin mining-dedicated data source, the Cambridge Bitcoin Electricity Consumption Index (CBECI).
According to Cambridge data, fossil fuels, such as coal and natural gas, represented more than 62%of the total electrical mixture of Bitcoin in January 2022. Thus, the proportion of renewable energy sources in BTC’s energy mix was 38%.
The new study advises that coal alone described for nearly 37% of Bitcoin’s total electricity consumption as of early 2022, becoming the largest single energy source for BTC mining. Among workable energy sources, hydropower was found to be the largest resource, with a share of roughly 15%.
Bitcoin mining relies heavily on coal and hydropower, but the proportion of these energy sources in the total BTC energy mix has declined in recent years. In 2020, coal-fired power supplied 40% of global BTC production. The share of hydropower has more than halved from 34% to 15% in 2020-2021.
In contrast, the role of natural gas and nuclear energy in Bitcoin mining has been notably growing over the past two years. The share of gas in the BTC electricity mix surged 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.
According to Cambridge analysts, Chinese miner replacements were a major reason behind sharp fluctuations in Bitcoin’s energy mix in 2020 and 2021. China’s crackdown on crypto in 2021 and the associated miner migration resulted in a major drop in the share of hydroelectric power in the BTC energy mix. As formerly reported, Chinese authorities shut down a number of crypto mining farms powered by hydroelectricity in 2021.
The surge of nuclear and gas energy in Bitcoin’s electricity mix allegedly reflects the “shift of mining power towards the United States,” according to an analyst.
Among other insights related to the latest CBECI update, the study also found that greenhouse gas (GHG) emissions associated with BTC mining accounted for 48 million tons of carbon dioxide equivalent (MTCO2e) as of Sept. 21, 2022. That is 14% lower than the estimated GHG emissions in 2021. According to the study’s estimates, the current GHG emissions levels related to Bitcoin represent roughly 0.1% of global GHG emissions.
Combining all the previously mentioned findings, the index estimates that by mid-September, about 199.6 MtCO2e can be attributed to the Bitcoin network since its inception. The analysts stressed that about 92% of all emissions have occurred since 2018.
The CDAP’s (Cambridge Digital Assets Programme) institutional collaborators include financial institutions like British International Investment, the Dubai International Finance Centre, Accenture, EY, Fidelity, Mastercard, Visa and others.
According to CBECI project lead Alexander Neumueller, the CDAP’s approach is different from the Bitcoin Mining Council when it comes to assessing Bitcoin’s electricity mix.
“We use information from our mining map to see where Bitcoin miners are located, and then examine the country, state, or province’s electricity mix. As I understand it, the Bitcoin Mining Council asks its members to self-report this data in a survey,” Neumueller stated. He still mentioned that there are still a few nuances related to lack of data in the study.
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