CleanSpark wants to make bitcoin mining sustainable: Renewable energy investments are key to making bitcoin mining 95 percent carbon-free.

• Author: Mumford, Jacqueline

MOTIVATED BY ITS ROOTS IN renewables and energy storage, CleanSpark is making the notoriously energy-consuming process of bitcoin more planet-friendly.

DESIGNING A NEW, RESILIENT MICROGRID

A microgrid is an energy system that uses distributed energy resources. Often, these include renewables like solar or wind, generators, and geothermal energy.

In 2016, CleanSpark Inc., then known as Stratean, began developing a new kind of microgrid for military applications--one that could use software to combine existing renewable energy generation processes with the ability to store unused power.

"We were tasked to provide more resiliency," says Matthew Schultz, co-founder and executive chairman of CleanSpark. "Our patented software and controls enabled the end-user to sell surplus energy back to the utility, meaning that if a facility made an investment in renewable energy, they could realize revenue in addition to having resilient power."

Successful tests produced an award-winning result: resilient microgrid designs that could island from the main grids if the central power experienced disruptions. With the ability to store excess energy in the battery in case of outages, or even sell the energy back to the utility for revenue, the company knew this technology could reach further than military applications.

So on the heels of this success, they acquired CleanSpark, took its name, and turned their full focus to renewable energy.

THE PROBLEM WITH SOLAR POWER

This shift in focus decidedly left out solar power, though. The microgrid developments were instead a "concerted effort by the utilities to devalue solar," Schultz says.

"The recent shift in utilities 'time-of-use' charges devalued existing solar infrastructure," he says. "Microgrid developments enabled the implementation of energy storage to preserve the value of installed renewable energy resources. By shifting the cost of energy based on time, the utilities made traditional electricity more expensive in states like California, Utah, and Nevada after the sun goes down."

In contrast, CleanSpark's microgrid technology is a solution that offsets the user's carbon footprint while also decreasing capital expense.

"We help our clients to be able to buy cheap power during the day and then deploy saved energy--whether in the form of multiple different battery chemistries, kinetic energy, or something else--later in the day and into the evening when it makes more financial sense," Schultz says.

With this slew of benefits, their microgrid designs soon garnered huge amounts of attention from energy-intensive users of all kinds.

THE DECISION TO GO ALL-IN ON BITCOIN

CleanSpark's first foray out of the military space was with cannabis growers.

"When we got into contact with energy developers that handled markets with unusually high energy consumption, we heard a lot from control distribution agriculture companies who were struggling with sustainable power usage," Schultz says.

After entering talks, they decided it wasn't the right fit. Their search for a high-consumption marketplace ended a month later, in January 2018, when they landed a deal to design a microgrid for a bitcoin miner.

"If you're wondering how an energy company fell into the bitcoin space, it's simple: mining bitcoin takes a tremendous amount of power," Schultz says.

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