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Australia’s energy problem is a paradox we have too much power. As a country blessed with an abundance of solar resources, we generate more power than our grid can handle during peak production times. Yet, despite this remarkable capacity, our infrastructure struggles to distribute and balance these loads efficiently, leaving untapped opportunities and wasted potential.
I’ve experienced this issue firsthand as a solar power generator. I installed a 10kW solar system on my property, excited about the possibilities of generating clean energy and even earning some revenue by feeding excess power back into the grid. However, I quickly learned that being on a single-phase connection means I can only feed 5kW (30kW 3 Phase) back into the grid at any given time. This limitation caps the potential impact of my system and, more frustratingly, limits the revenue I could generate.
These limits exist because our grid infrastructure was designed for centralised power generation rather than decentralised renewable inputs. Feeding too much power back into the grid can destabilise the system, leading to potential overloads and inefficiencies. This technical bottleneck highlights the need for more adaptive solutions.
Then there’s the conversation about batteries. Yes, batteries could store the excess power I can’t feed into the grid. But at an average cost of S10,000, investing in a battery feels economically unviable for many households. Once you’ve eliminated your electricity bill by generating your own power, the marginal benefit of storing energy you’re unlikely to use is minimal. And with feed-in tariffs sitting at 10 cents per kilowatt-hour or less, there’s little financial incentive to supply energy back to the grid.
To understand the potential for Bitcoin mining in grid balancing, it’s essential to unpack how the power market works. Australia’s electricity market operates on a dynamic pricing system, where power generators bid to supply energy to the grid. Prices fluctuate based on demand and supply, and during periods of excess renewable generation—like midday when solar output peaks—prices can even go negative. This happens because it’s often cheaper for generators to pay to stay online than to shut down and restart later.
Here’s where the problem lies. When feed-in tariffs are low or even negative, there’s little incentive for renewable energy producers to keep their systems running. This leads to curtailment, where solar farms or rooftop systems are forced to reduce output to maintain grid stability. This isn’t just a waste of potential energy; it undermines the economics of renewables.
A solution? Introducing a flat-rate “commercial” term for power during unfavourable periods, tailored specifically for Bitcoin miners to balance the grid. Instead of penalising renewable generators with negative pricing, a Bitcoin balancing market could offer a fixed, predictable rate for excess power. Bitcoin miners, with their capacity for scalable and flexible energy consumption, would become an essential part of this ecosystem. By consuming excess power during peak supply periods, miners ensure renewable generators stay online and provide stability to the grid. This model would also create an additional revenue stream for generators, making long-term investments in renewable infrastructure more viable.
Recent announcements from the United States about exploring the creation of a strategic Bitcoin reserve and promoting US made Bitcoin mining with renewable energy highlight a visionary approach to leveraging excess power. Bitcoin mining’s ability to act as a flexible load balancer offers a compelling solution to managing renewable energy surpluses. Unlike traditional loads, Bitcoin miners can scale their power consumption up or down in real time, matching grid needs without compromising operational efficiency.
Since 2018, I’ve been trying to bring this idea to the forefront. Australia should use Bitcoin mining as a grid-balancing tool. Here’s how it could work.
With the U.S. leading the charge in renewable-powered Bitcoin mining and global interest in sustainable mining solutions surging, the time is ripe for Australia to act. Our vast solar capacity and underutilised energy resources position us uniquely to become a global leader in this space. By integrating Bitcoin mining into our energy strategy, we can solve grid imbalances, reduce wasted energy, and generate new streams of revenue—all while reinforcing our commitment to sustainability.
Australia’s power surplus is a challenge begging for innovative solutions. Bitcoin mining presents an elegant answer, turning excess renewable energy into a strategic asset. Coupled with a reformed pricing model that rewards renewable energy generators, we can transform our energy system, lead the world in sustainable technology, and unlock a new era of economic and environmental progress.