The mining of cryptocurrency, or bitcoin, is an energy-intensive process, and entrepreneurs are looking at several technologies—including innovative geothermal energy techniques—to power their operations.
Among the latest is a service from a California-based renewable energy group, RenewaBit, which has joined with CeraPhi Energy, a Houston, Texas-based company, to produce geothermal energy with integrated crypto mining offtake. The groups’ GreenFlash service retrofits oil and gas wells, providing sustainable energy and an incentive for well owners to make wells more profitable at any stage of operation.
The strategy aligns with RenewaBit’s focus on helping renewable energy assets commercialize merchant or curtailed energy with cryptocurrency mining facilities. Their technology, in addition to powering bitcoin mining, could be used to provide electricity to remote locations and communities, along with extending the life—and profitability—of oil and gas wells, particularly attractive to well operators with prices for those commodities rising.
Clean Energy for Bitcoin Mining
RenewaBit executives told POWER that by connecting utility-scale crypto mining to green energy generation assets, the company will not only bring clean energy to the cryptocurrency network, it also can make renewable energy more profitable—and reduce the environmental issues around the global use of cryptocurrency.
GreenFlash leverages the proprietary CeraPhiWell closed-loop geothermal technology, which allows operating wells to continue producing oil and natural gas while at the same time generating geothermal energy. RenewaBit executives told POWER the company’s crypto mining data centers “represent a fully scalable offtake solution that commercializes produced geothermal energy at high variable yields, and require small land and electrical infrastructure requirements,” noting the system uses about 400 square feet of space per MW produced.
“We are focused directly on supporting green energy growth” said Ian Hartley, RenewaBit’s CEO, in an interview with POWER. “There are lot of bitcoin miners in the market, who want to get projects deployed and increase their computing power, regardless of their energy source. We’re focused specifically on working on green energy. It might have been easier for us to simply build hyperscale bitcoin mining data centers, but we know that bitcoin needs to have a reckoning with its energy use and its environmental footprint. You can look at us as an enabler for a green bitcoin network, and as a market facilitator for green energy growth.”
“Because many wells are in remote locations with limited local power demand or electrical infrastructure, RenewaBit’s scalable data centers make it possible for us to commercialize vastly more wells than otherwise possible,” said Lafayette Herring, VP of North America for CeraPhi, in a news release. Herring said, “The GreenFlash solution now makes the majority of wells a suitable option for retrofitting due to the scalable high yields that can be created by RenewaBit in any location.”
Support for Geothermal Technology
Kathleen Sifer, a managing director at Grant Thornton and a public sector loan and grant programs told POWER, “Proof that there is viability to geothermal potential is evidenced by the U.S. Dept. of Energy [DOE] Geothermal Technology Office’s Wells of Opportunity program, which earlier this year committed $8.4 million to four projects to establish new geothermal energy and heat production from abandoned oil and gas wells. Sifer said the DOE’s program follows other programs in the same vein funded last year, designed to “help support research and development and reduce the costs and risks associated with geothermal development.”
Cryptocurrency mining is the process by which new crypto “coins” are entered into circulation. Production of the currency requires highly sophisticated computers, often housed in a data center, to solve complex computational math problems. These data centers require large amounts of electricity, generating power onsite supports a reliable and resilient energy source.
Energy production at oil and gas wells is a growing trend when it comes to powering bitcoin mining. Capstone Green Energy Corp. on Feb. 22 announced that its southern U.S. distributor, Lone Star Power Solutions, has contracted with a remote data center in Louisiana on the use of a Capstone C1000S microturbine system, the second such system at that site. The customer was not named, but Capstone said the system is located on an oil and gas well and handles large-volume blockchain and cryptocurrency mining. The microturbine uses well-produced gas, or waste gas, that might otherwise be flared.
“We are now seeing multiple customers in this relatively new industry taking progressive steps to address their energy use, and using an existing waste stream as a fuel source is brilliant in my opinion,” said Darren Jamison, president and CEO of Capstone Green Energy. “Doing so not only dramatically reduces emissions but also provides the customer with essential operating benefits like added power security and reduced maintenance costs.”
Focus on Renewable Energy and the Environment
The RenewaBit and CeraPhi system is designed to be more environmentally friendly, using renewable geothermal energy as a power source rather than burning waste natural gas.
“CeraPhi is a great partner for working with the oil and gas industry, as they are in touch with major firms with [drilling] rigs in many locations around the U.S.” said Hartley. “We’re extremely excited about what this means for the oil and gas industry. With GreenFlash, we can turn around these wells, make them net-negative carbon, and generate a high-yield returns profile that oil and gas companies are used to. We see GreenFlash as a convenient way to help the oil and gas industry solve major end-of-life well challenges while drastically increasing asset cash flow, and serendipitously creating a green energy strategy along the way.”
Hartley said that while other companies are developing geothermal technologies to support oil and gas wells, including in enhanced oil recovery and energy storage, “GreenFlash is, to our knowledge, the only realistic way to enable oil and gas firms to reach ‘net zero’ while increasing their profitability.”
Hartley and Eric Finch, CDO at RenewaBit, told POWER the GreenFlash service includes the geothermal well retrofitting and data center deployment in a process that can reach commercial operation in less than six months. As part of that process, RenewaBit and CeraPhi arrange and conduct engineering, procurement, and construction services, along with operations and maintenance for the wells and data centers. RenewaBit utilizes the company’s automated service to convert cryptocurrency into the client’s chosen currency, and deposit proceeds into a client account on a real-time basis.
Oil and Gas Sector Eyes Technology
Finch told POWER there are “major companies in the oil and gas space” evaluating the GreenFlash system, with an eye toward deployments within the next several months. “We really act as an enabler for oil and gas companies, to transition end-of-life wells into an extremely profitable green asset.”
“Our core business is evaluating pilot sites that we are evaluating in California, and we anticipate we will move toward a pilot site deployment in Q2,” said Hartley, adding that the company also is looking at a wide variety of solar, wind, and other projects across the US, some of which could be up and running no later than this fall. “This solution is suitable for many states,” he said.
Hartley noted some companies are working specifically on geothermal designs more closely aligned with extending “end-of-life” oil and gas wells, though the GreenFlash system “is suitable even for operating oil and gas wells,” while acknowledging it could be used to extend a well’s life. Hartley also noted how some companies are powering cryptocurrency mining with flared gas from their own wells—such as the Louisiana project mentioned earlier—and said the GreenFlash system is more economic. “Flare gas is doing a lot more work for the same amount of [power],” he said.
“The reason we are leading with bitcoin mining today is, it’s really a best-use of energy. It’s the most flexible … it’s the ideal solution to solve merchant energy issues. We can facilitate powering of a data farm,” said Hartley. He also said the system could be purposed for remote locations, calling it “an offtake solution that can be integrated anywhere.”
Said Finch, “It’s really a win-win for both parties involved,” referring to the well operator and the group using the energy. “With a geothermal system, we’re producing 100% clean energy, and it can be built in remote regions. We’re basically carbon-negative by capping these wells. As these remote regions become populated, it can power those communities.”
—Darrell Proctor is a senior associate editor for POWER (@POWERmagazine).