Solar-powered Crypto Mining Becomes Legal in Uzbekistan

Companies in Uzbekistan can start mining cryptocurrencies using solar energy; a presidential decree released this week stated. - 2022-05-04T182532.821.jpg

The decree has also exempted all crypto operations by domestic and foreign firms from income tax.

According to Reuters, the Tashkent government wants miners to generate power for their farms by installing their own solar panels.

The decree also stated that mining companies can connect to the main power grid for double the regular price. However, during peak consumption period extra surcharges can be levied.

It further added that companies do not require a mining license, but they must be registered by a newly formed Uzbek National Agency for Perspective Projects.

Crypto mining involves computers solving complex puzzles to “mine” or generate cryptocurrencies. These computers usually require large amounts of electricity.

Cryptocurrency trading in Uzbekistan became legal in 2018, but trades could only be conducted through a domestic crypto exchange.

Meanwhile, neighbouring Kazakhstan has cracked down on crypto mining after such operations strained its power grid dominated by ageing coal power plants.

Image source: Shutterstock


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Is Solar Power A Good Fit For Bitcoin Mining?

There are two energy revolutions currently underway that complement one another: the revolution in human energy use, as greener or more sustainable options become a priority in the light of climate change, and the Bitcoin revolution that is driving a whole new frontier in how energy is used to create value.

Solar power in particular seems like the cutting edge for renewable Bitcoin mining. Bitcoin industry stalwarts Blockstream and Square are constructing a multi-million-dollar solar-powered mining facility, for instance.

But it’s hard to know what percentage of the Bitcoin network’s overall hash rate is generated by solar power, though anecdotal evidence from solar developer Blake King of RES Holdings indicates that there are new solar projects “everywhere” in the U.S.

In a recent Compass Mining podcast, King noted that there really isn’t data available to determine exactly how much solar energy is available, but he’s hearing that power grid generation queues are full of new solar companies trying to get in.

“It’s huge,” he said. “There’s gigawatts of solar coming in everywhere.”

The latest Cambridge Centre For Alternative Finance energy data indicates that “a growing share of total electricity consumption originates from renewable energy sources such as hydro, solar, or wind power,” though, the center notes, that “the exact energy mix of the Bitcoin mining industry remains unknown… estimates diverge considerably, ranging from approximately 20% to 30% of the total energy mix to more than 70%”

The Potential For Solar-Powered Bitcoin Mining

As the share of solar-powered hash rate seems likely to grow, many see the potential for renewable energy use in Bitcoin mining as a virtuous cycle — one in which the unique incentives in Bitcoin mining, which propel operations to leverage the cheapest power possible, will encourage more operations worldwide to convert to renewable energy sources, like solar.

And as governments agree to reduce levels of carbon emissions and introduce additional incentives like investment tax credits, it’s possible that the share of mining operations using solar power will increase even more.

As Dan Frumkin, head of research and content for Braiins and Slush Pool, wrote recently, there’s the “the possibility for bitcoin to [incentivize] renewable energy development around the world by providing a means to monetize surplus energy which would otherwise be wasted.”

Where Is Solar-Powered Bitcoin Mining Happening?

In an interview with Bitcoin Magazine, Frumkin said that there is no reliable data on where solar farms are located, but there are some likely homes.

“I think the whole Southwest is optimal for solar,” he said. “My home state of New Mexico gets about 300 days of sunshine per year and has plenty of barren desert landscapes. It also has lots of oil and gas production, so I think it would be a great place to try a solar and waste-gas hybrid operations to ensure uptime even when the sun isn’t shining.”

Blockstream and Square’s forthcoming joint venture will be located in the state of Georgia.

Meanwhile, the Solar Energies Industry Association has listed the top ten states for solar power based on the cumulative amount of solar capacity installed in Q1 2021.

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Anecdotally, we also know that West Texas is a solar and wind powerhouse and a new favorite mecca for companies hoping to mine bitcoin.

The Downsides Of Solar-Powered Mining

In his written analysis, Frumkin noted that solar power may be considered green and renewable, but also that there are significant problems with solar, including the limits of sunlight hours. The below chart demonstrates the availability of solar compared to other energy sources:



In the recent Compass Mining podcast, Frumkin and Blake explained that there are a number of ways to fill in the hours without sunlight (also, those when it’s cloudy or there are dust storms) to make solar power use economical.

Some companies use a natural gas generator to fill in those gaps, leveraging an energy source that is relatively inexpensive but not renewable. Other miners have contracts or “power purchase agreements” (PPAs) with their local energy grids to purchase off-peak, inexpensive power through the night, often for as low as two cents per kilowatt hour. This may be power that would otherwise go unused.

The below chart shows the estimated relative price of different energy sources, per the International Renewable Energy Agency:



Most solar power companies use batteries to capture and store excess solar rays, and that works especially well for small operations. But it is not a solution for larger operations.

“A solar panel and battery system on somebody’s roof will work well to power a few miners with full uptime,” Frumkin told Bitcoin Magazine. “If the solar farm is much larger and meant to be supplying energy to the grid, then there is another source of demand for the power in those batteries and then it becomes complicated. This is the case that I analyzed here, where the battery power was reserved for the grid and the only power that could be used for mining was the surplus produced after meeting grid demand and filling the batteries. In that case, I don’t believe the risk/reward on mining is attractive.”

Is Solar Power Even Truly Green?

Although solar energy itself is considered “green” or renewable, the process of manufacturing solar panels often uses coal and produces toxic waste as a byproduct.

Most solar panels are manufactured in China in the Xinjiang region (which, until recently, was also a bitcoin mining epicenter) where there is abundant available coal energy.

“In my opinion it is legit criticism,” Frumkin said of the environmental drawbacks of solar panel manufacturing. “So much of the world’s solar panel production takes place in Xinjiang and is quite likely involving slave labor of the Uyghur ethnic minority people there, as well as the use of lots of coal power and toxic chemicals in the manufacturing process.”

As a result, the idea that solar power would actually be a “green” alternative for bitcoin mining might be a misconception.

“It’s still not accurate to portray solar as 100% clean either from an environmental or ethical standpoint,” Frumkin said. “Maybe the tradeoffs are worth it with all factors considered, but it’s rare to even see the negative factors mentioned in mainstream media.”




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Greenidge Generation To Repurpose Old Coal Ash Landfill Into A New Solar Farm

Bitcoin miner Greenidge announced today its plans to expedite the closure of an old coal ash landfill and turn it into a solar farm.

Bitcoin mining firm Greenidge Generation announced today its plans to expedite the closure of a forty-year-old coal ash landfill in the Finger Lakes region, New York, and turn it into a new solar farm.

“I am thrilled that the success of our clean bitcoin mining operation is not only creating great high-tech jobs for residents here, and supporting local businesses, but will now also facilitate the development of renewable energy at this old landfill site,” said Dale Irwin, President of Greenidge Generation Holdings Inc.

The company, which in May committed to being carbon neutral by 2021, has since been purchasing carbon offsets from a portfolio of U.S. greenhouse gas reduction projects. The goal was to offset the carbon footprint of its natural gas-powered bitcoin mining plant in Upstate New York by June.

Now, Greenidge will reinvest part of that plant’s profits to repurpose the old Lockwood Hills coal ash landfill into a new solar farm. The company intends to work with the New York State Department of Environmental Conservation to “safely cap and close the landfill and relinquish its existing permit to operate the site,” the announcement said.

Greenidge said it plans to launch a Request for Proposals to evaluate the solar farm project, which it expects to generate up to 5 megawatts of power.

The Lockwood landfill was constructed in 1979 to dispose of coal combustion residuals (CCR) and other wastes produced by the power generation facility prior to Greenidge assuming ownership in 2014.

The landfill remains open and operational today. But according to the announcement, the site will soon stop accepting waste and, once the closure process begins, various steps will be taken to prevent erosion and water infiltration there.

Greenidge Generation Holding Inc. is the parent company of Greenidge Generation LLC, the vertically-integrated bitcoin mining and power generation facility in Upstate New York. The 106-megawatt natural gas plant allows Greenidge to mine bitcoin and meet the power needs of homes and businesses in the Finger Lakes region.

In early July, Greenidge announced its plans to establish a second bitcoin mining operation in South Carolina. A couple of weeks after that, the firm shared it had partnered with Foundry Digital to buy 2,300 bitcoin miners and finance another 6,000. Greenidge also joined the Foundry USA Pool as part of the collaboration.


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Greenidge Generation will use BTC mining profits to build solar farm

Bitcoin mining company Greenidge Generation is planning to increase the number of renewable energy sources available for use in New York.

In a Thursday announcement, Greenidge said it would be using the profits from its Bitcoin (BTC) miners in the Finger Lakes region of New York state to expedite the closure of a nearby coal ash landfill. The company plans to transform the Lockwood Hills site into a solar farm capable of generating 5 megawatts of power.

Greenidge CEO Jeff Kirt said the project was “making more renewable energy a reality by leveraging Bitcoin mining profits to fund the creation of a new solar farm at a landfill site.” According to the firm, it aims to create high-tech jobs for residents and support local businesses with the solar farm.

The new energy source could also seemingly be used to augment the power of the company’s Bitcoin plant operations on Seneca Lake, which aims to dedicate 85 MW to crypto mining by next year. The plant had previously been powered by coal but now reportedly uses ​​natural gas.

Related: Mining firm aims to go public through merger with Nasdaq-listed company

The mining firm said it operates “100% carbon-neutral” BTC mining facilities, with plans to expand to South Carolina as early as this year. Greenidge aims to achieve an operational capacity of at least 500 MW across multiple locations by 2025.

However, critics of Greenidge — including the environmental group Seneca Lake Guardian — have claimed that the mining firm’s operations are not as environmentally friendly as they appear, saying the company is relying on natural gas produced from fracking. Local residents have also accused Greenidge of being responsible for rising temperatures in Seneca Lake by claiming it discharged overheated water.