Japanese grid operator uses sustainable surplus energy for Bitcoin mining

The frequency of natural disasters in Japan necessitates the development of decentralized data centers that together form a huge computer network - so-called "distributed computing". These distributed data centers enable new technologies such as artificial intelligence (AI), the metaverse, automated driving, 5G telecommunications and cryptocurrencies, which, however, have different energy consumption patterns.

At the same time, there is growing interest in environmental and energy issues that entail measures to optimize energy consumption and power grids as well as to reduce costs and emissions. The effective use of renewable energies, which are intermittent in nature, is becoming increasingly important.

Electricity grid operators that use renewable energies are often forced to restrict or completely shut down the operation of intermittent green electricity producers in their supply area in order to avoid an oversupply of electricity and thus destabilization of the electricity grid. Particularly during peak times of solar power generation, the electricity supply should be in balance with demand.

This practice of limiting output was introduced in Japan by the Kyushu Electric Power Company and has so far been adopted by nine other regional energy suppliers. As a result, valuable power generation capacity and therefore large amounts of energy remain unused and are wasted.

One of the largest newspapers in Japan, The Asahi Shimbun, reported that by 2023, "a total of 1,920 gigawatt hours of electricity will be subject to power control across Japan, equivalent to the annual electricity consumption of 450,000 households". Further estimates suggest that Japan could generate up to twice as much electricity from renewables as it currently does.

The Tokyo Electric Power Company (TEPCO) in the greater Tokyo area has not adopted the power restriction. Agile Energy X, a subsidiary of TEPCO, has dedicated itself to counteracting such energy waste with the help of Bitcoin miners and promoting the widespread use of renewable energy.

In 2018, Kenji Tateiwa, the president of Agile Energy X, looked at both the power constraints of Japanese utilities and the high energy consumption of Bitcoin and realized that these two aspects could be combined to avoid wasting unused energy. To substantiate his findings in practice and share the knowledge with other energy suppliers, Tateiwa decided to found Agile Energy X in 2022. In November of that year, the company launched a pilot project in cooperation with TEPCO and the semiconductor developer TRIPLE-1.

The focus was on the effective and flexible use of excess electricity generated from renewable energy sources across the country and TEPCO's infrastructure with the help of TRIPLE-1's state-of-the-art energy-saving semiconductors. Instead of wasting electricity, Agile Energy X creates new demand for the data centers through Bitcoin mining.

The result was that the plant can operate normally and promote the decarbonization of the electricity grid. At the same time, renewable energy providers could generate more profits through mining, thereby launching more green energy projects and stimulating the economy.

The success of our concept would lead to more green energy being introduced.
_{Kenji Tateiwa, President of Agile Energy X, in an interview}

At present, the profitability of Bitcoin mining is still limited due to power constraints, but with the expansion of renewable energy infrastructure in Japan, the practice of using unused energy for Bitcoin mining would also become more important, explains Tateiwa. According to the Agile Energy X experiment, if the Japanese government aims to generate at least 50 percent of the total electricity supply from green energy by 2050, 240,000 gigawatt hours of electricity would be wasted. This amount of excess electricity is too large to be stored in batteries, so Bitcoin mining would be a viable solution to this waste of energy. According to estimates by Agile Energy X, Bitcoin worth 360 billion yen (2.5 billion US dollars) could be mined annually with just 10 percent of this electricity. With this new source of income, green energy producers would be able to further expand the renewable energy infrastructure. This would also make more surplus energy available for mining, making such projects increasingly profitable.

In Japan, the media is therefore reporting on how Bitcoin can be integrated into the country's energy strategy, while other countries are still looking for the negative aspects of Bitcoin.