The energy mix of Bitcoin (BTC) has changed dramatically in recent years, with nuclear power and natural gas becoming the fastest growing energy sources powering Bitcoin mining, according to new data.
The Cambridge Center for Alternative Finance (CCAF) released a major update to its dedicated Bitcoin mining data source, the Cambridge Bitcoin Electricity Consumption Index (CBECI), on Tuesday.
According to data from Cambridge, fossil fuels such as coal and natural gas made up nearly two-thirds of Bitcoin’s total energy mix in January 2022, accounting for more than 62%. Thus, the share of sustainable energy sources in the BTC energy mix amounted to 38%.
The new study suggests that coal alone accounts for nearly 37% of Bitcoin’s total electricity consumption by early 2022, making it the largest source of energy for BTC mining. Among the sustainable energy sources, hydropower is the largest resource, with a share of approximately 15%.
Even though Bitcoin mining relies heavily on coal and hydropower, the share of these energy sources in the total BTC energy mix has been declining in recent years. In 2020, coal power was powering 40% of global BTC mining. The share of hydropower has more than halved between 2020 and 2021, from 34% to 15%.
Instead, the role of natural gas and nuclear power in Bitcoin mining has grown remarkably in the last two years. The percentage of gas in the BTC energy mix has skyrocketed from around 13% in 2020 to 23% in 2021, while the percentage of nuclear power has risen from 4% in 2021 to nearly 9% in 2022.
According to Cambridge analysts, Chinese miner relocations were one of the main reasons for the sharp fluctuations in Bitcoin’s energy mix in 2020 and 2021. China’s crackdown on cryptocurrencies in 2021 and the associated miner migration gave This has led to a significant drop in the share of hydropower in the BTC energy mix. As previously reported, Chinese authorities have shut down a number of hydroelectricity-powered cryptocurrency mining farms in 2021.
“The Chinese government’s ban on cryptocurrency mining and the consequent displacement of Bitcoin mining activity to other countries had a negative impact on Bitcoin’s environmental footprint,” the study suggests.
Analysts also highlighted that the energy mix of BTC varies greatly by region. Countries like Kazakhstan remain heavily dependent on fossil fuels, while in countries like Sweden, the share of sustainable energy sources in electricity generation is about 98%.
The increased use of nuclear power and gas in Bitcoin’s energy mix reportedly reflects the “shift of mining power to the United States,” the analysts claimed. According to the US Energy Information Administration, most of the country’s electricity was generated by natural gas, which accounted for more than 38% of the country’s total electricity production. Coal and nuclear power accounted for 22% and 19%, respectively.
Among other data related to the latest CBECI update, the study also revealed that greenhouse gas (GHG) emissions associated with BTC mining represented 48 million metric tons of carbon dioxide equivalent (MtCO2e) as of 21 December. September 2022. This figure is 14% lower than the estimated GHG emissions for 2021. According to the study’s estimates, the current levels of GHG emissions related to Bitcoin represent approximately 0.1% of global GHG emissions.
Combining all the findings mentioned above, the index estimates that as of mid-September, around 199.6 MtCO2e can be attributed to the Bitcoin network since its inception. Analysts highlighted that around 92% of all emissions have occurred since 2018.
As previously reported, CCAF has been working on the CBECI as part of its multi-year investigative initiative known as the Cambridge Digital Assets Program (CDAP). CDAP’s institutional partners include financial institutions such as British International Investment, Dubai International Financial Centre, Accenture, EY, Fidelity, Mastercard and Visa, among others.
Related: Bitcoin could become a zero-emission network: Report
The new CDAP findings differ markedly from data from the Bitcoin Mining Council (BMC), which in July estimated the share of sustainable sources in Bitcoin’s energy mix to be nearly 60%.
“It does not include nuclear power or fossil fuels, so you can deduce that around 30%-40% of the industry is fossil fuel dependent,” Bitfarms director of mining Ben Gagnon told Cointelegraph in August.
According to CBECI project manager Alexander Neumueller, the CDAP’s approach is different from that of the Bitcoin Mining Council when it comes to estimating Bitcoin’s energy mix.
“We use the information from our mining map to see where Bitcoin miners are located, and then we look at the energy mix of the country, state, or province. As I understand it, the Bitcoin Mining Council asks its members to self-report these data in a survey,” Neumueller said. Still, he mentioned that there are still some nuances related to the lack of data in the study.
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