Crypto mining is an energy intensive business and is increasingly becoming an environmental issue. Mining operations in China are often powered by fossil fuels. But can crypto help kickstart a green energy revolution. One company believes so and have an ambitious plan to generate green energy to mine crypto in one of the windiest and inhospitable environments on earth.
Soluna has acquired a 37,000 acre wind farm site in Morocco that has the potential to generate up to 900 MW of power at any one time. Recent estimates suggest that the total Bitcoin network uses at least 2.55 gigawatts. So, this array would meet around a third of the networks current electrical needs. The site has been purchased from a previous company that started to develop the site, but progress had stalled. Soluna along with German wind power company ALTUS AG wants to install at least 36 megawatts of generating capacity by 2020 and expand the array to the maximum capacity of 900 megawatts within 5 years. Soluna aims to deliver the project in five years at a cost ranging between $1.4 and $2.5 billion U.S dollars, as it promised the Moroccan government. The firm is planning to invest $100 million dollars in the first stage.
“Soluna’s mission is to power the crypto-economy with clean, low-cost renewable energy. To do this, we are building a blockchain infrastructure and cryptocurrency mining company that owns its own renewable energy resources,” it says in the companies brochure.
The plan is to use the proceeds of crypto-mining by the small array to fund construction of the larger array. There is also the opportunity to sell the spare capacity to the Moroccan grid although Morocco already produces 102% of its own electricity requirements. It is anticipated that there will be a connection to the Moroccan grid by May next year. Soluna will not just participate in crypto mining they will lend their spare computational capacity to whatever is the most profitable usage of its hardware.
“Soluna will provide computing power for whatever is most beneficial for its business, whether that’s cryptocurrency mining, distributed graphics rendering, file storage, machine learning, AI or other services of the decentralised cloud of blockchain technologies that have yet to be invented,” says Soluna. “We are prepared to foster this future innovation. Green, renewable, low-cost power will serve as a key component.”
Blockchain based solutions often suffer from energy-based problems. Blockchains that rely upon Proof-of-Work consensus such as Bitcoin can burn a huge amount of energy. The Bitcoin network is only 10 years old and already consumes as much energy as Ireland. This will increase to Austrian levels before the years end.
Where energy is cheap you will often find bitcoin miners. Due to Iceland’s abundant geothermal energy supplies the country produces more energy for crypto-mining than it actually does for consumers. China is also home to some of the world’s largest mining rigs. Electricity there is cheap but is often generated at coal fired power stations.
Electricity is the largest variable cost for mining operations. They are profitable as long as the value of the cryptocurrency produced is larger than the electricity expended. Coal fired power in China can cost as little as $0.03 per KWH. The average price of electricity in the USA is approximately $0.13 per KWH.
Previous projects within Morocco have drawn international praise but have caused issues within the disputed territory. Their Tarfaya complex stretches over more than 100 square kilometres of the Saharan desert. It was built in only two years and was launched in 2015 and currently holds the record as Africa’s largest wind farm. It has 131 wind turbines grinding out enough electricity to power a city the size of Marrakech every day.
However, the renewable energy project is also controversial with some of the Sahrawi people– those who live in the west of the Sahara desert – who have complained that it will further exasperate the occupation of their land.
The Western Sahara dispute can be traced back to November 1975, when Morocco oversaw a 350,000-strong “green march” from Tarfaya across the region. This occurred as Spain was beginning a disorderly decolonisation. Subsequently there was a mass flight of Sahrawi refugees and decades of armed conflict, as the UN proclaimed the region a “non-self-governing territory”.
The Tarfaya wind farms 131 wind turbines can at max capacity generate 2.5 Megawatts of power each. There is a total installed capacity of 301 MW. It was listed in the top ten “Most Outstanding African Projects in 2015”, a ranking by Jeune Afrique magazine. It received an Investment of 5 billion dirhams ($530 million US Dollars). Its constructor and operator is Tarec, which sells the power generated to the National Electricity Office.
As you can see the proposed project is much more ambitious than the existing largest project. If Soluna is able to pull this off, it will truly be an amazing mega project putting Africa at the forefront of wind energy generation. It will be in the top 20 largest wind farms currently in the world and the largest wind farm outside of China, India and the USA, the world’s three most populous countries.