Power Markets

Many Shades of Green

Power Markets for Bitcoin Miners, 01/08/24

David Bellman

Key Takeaway #1

There are many ways to become “green.”

Key Takeaway #2

Direct connection to a renewable resource is the most obvious, but establishing this structure could sacrifice utilization or size.

Key Takeaway #3

Renewable credits support renewable generation development.

Key Takeaway #4

Hash soared, reaching a record weekly value of 538 EJ/s and causing a decline in mining economics even as BTC is up

Being green comes in degrees. In our view, unless you are connected only to renewable sources, you cannot claim to be 100% green. Grid power contains a plethora of resources, with much of the generation still fossil fuel. Natural gas is the number one generation source for 2023 by a significant margin. Renewables have made great strides, bypassing coal and nuclear. Wind is the dominant renewable resource, with solar also ramping up.

Solar is known as an unreliable power source (obviously, there is no solar generation at night). Wind’s best capacity factor onshore has been around 50-60% for the year. However, it goes without saying that there are still times when there is no wind blowing.

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Being green comes in degrees. In our view, unless you are connected only to renewable sources, you cannot claim to be 100% green. Grid power contains a plethora of resources, with much of the generation still fossil fuel. Natural gas is the number one generation source for 2023 by a significant margin. Renewables have made great strides, bypassing coal and nuclear. Wind is the dominant renewable resource, with solar also ramping up.

Solar is known as an unreliable power source (obviously, there is no solar generation at night). Wind’s best capacity factor onshore has been around 50-60% for the year. However, it goes without saying that there are still times when there is no wind blowing.

If wind or solar resources (without batteries) are directly connected to your mining operation, the potential for running at high utilization is reduced, unless the wind facility is large and you are committed to receiving the first MW from that facility. You can get hourly profiles from any location worldwide online. We randomly selected a West Texas location (Lat 31.4356, Lon -102.3242) and chose a GE wind turbine, which produced a 44% capacity factor for the year. Pulling the hourly data and creating a histogram, it shows that from a 100MW facility, a 10MW load could run 91% for the year without any grid generation. However, in order to facilitate this, you would need to work with the wind project owners to ensure you consistently receive the first 10 MW regardless of market conditions.

Green/renewable/carbon credits are another way to become green. Some may criticize this approach as not pursuing green status directly, but purchasing credits makes it more likely that the renewable project will be developed. The more renewable projects developed, the more penetration renewables will achieve.

‍

At BitOoda, we can help you develop a power strategy that can be green and cost effective. A blend of direct initiatives and credits typically creates the best portfolio, while a diversification of energy resources creates a more sustainable outcome due to weather risk

Disclosures

Purpose This research is only for the clients of BitOoda. This research is not intended to constitute an offer, solicitation, or invitation for any securities and may not be distributed into jurisdictions where it is unlawful to do so. For additional disclosures and information, please contact a BitOoda representative at info@bitooda .io. Analyst Certification 11 David Bellman, the research analyst denoted by an “AC” on the cover of this report, hereby certifies that all of the views expressed in this report accurately reflect his personal views, which have not been influenced by considerations of the firm’s business or client relationships. Conflicts of Interest This research contains the views, opinions, and recommendations of BitOoda. This report is intended for research and educational purposes only. We are not compensated in any way based upon any specific view or recommendation. January 8, 2024 General Disclosures Any information (“Information”) provided by BitOoda Holdings, Inc., BitOoda Digital, LLC, BitOoda Technologies, LLC or Ooda Commodities, LLC and its affiliated or related companies (collectively, “BitOoda”), either in this publication or document, in any other communication, or through http on or ://www.bitooda.io/, including any information regarding proposed transactions or trading strategies, is for informational purposes only and is provided without charge. BitOoda is not and does not act as a fiduciary or adviser, or in any similar capacity, in providing the Information, and the Information may not be relied upon as investment, financial, legal, tax, regulatory, or any other type of advice. The Information is being distributed as part of BitOoda’s sales and marketing efforts as an introducing broker and is incidental to its business as such. BitOoda seeks to earn execution fees when its clients execute transactions using its brokerage services. BitOoda makes no representations or warranties (express or implied) regarding, nor shall it have any responsibility or liability for the accuracy, adequacy, timeliness or completeness of, the Information, and no representation is made or is to be implied that the Information will remain unchanged. BitOoda undertakes no duty to amend, correct, update, or otherwise supplement the Information. The Information has not been prepared or tailored to address, and may not be suitable or appropriate for the particular financial needs, circumstances or requirements of any person, and it should not be the basis for making any investment or transaction decision. The Information is not a recommendation to engage in any transaction. The digital asset industry is subject to a range of inherent risks, including but not limited to: price volatility, limited liquidity, limited and incomplete information regarding certain instruments, products, or digital assets, and a still emerging and evolving regulatory environment. The past performance of any instruments, products or digital assets addressed in the Information is not a guide to future performance, nor is it a reliable indicator of future results or performance. All derivatives brokerage is conducted by Ooda Commodities, LLC a member of NFA and subject to NFA’s regulatory oversight and examinations. However, you should be aware that NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets. BitOoda Technologies, LLC is a member of FINRA. “BitOoda”, “BitOoda Difficulty”, “BitOoda Hash”, “BitOoda Compute”, and the BitOoda logo are trademarks of BitOoda Holdings, Inc. Copyright 2024 BitOoda Holdings, Inc. All rights reserved. No part of this material may be reprinted, redistributed, or sold without prior written consent of BitOoda

Being green comes in degrees. In our view, unless you are connected only to renewable sources, you cannot claim to be 100% green. Grid power contains a plethora of resources, with much of the generation still fossil fuel. Natural gas is the number one generation source for 2023 by a significant margin. Renewables have made great strides, bypassing coal and nuclear. Wind is the dominant renewable resource, with solar also ramping up.

Solar is known as an unreliable power source (obviously, there is no solar generation at night). Wind’s best capacity factor onshore has been around 50-60% for the year. However, it goes without saying that there are still times when there is no wind blowing.

If wind or solar resources (without batteries) are directly connected to your mining operation, the potential for running at high utilization is reduced, unless the wind facility is large and you are committed to receiving the first MW from that facility. You can get hourly profiles from any location worldwide online. We randomly selected a West Texas location (Lat 31.4356, Lon -102.3242) and chose a GE wind turbine, which produced a 44% capacity factor for the year. Pulling the hourly data and creating a histogram, it shows that from a 100MW facility, a 10MW load could run 91% for the year without any grid generation. However, in order to facilitate this, you would need to work with the wind project owners to ensure you consistently receive the first 10 MW regardless of market conditions.

Green/renewable/carbon credits are another way to become green. Some may criticize this approach as not pursuing green status directly, but purchasing credits makes it more likely that the renewable project will be developed. The more renewable projects developed, the more penetration renewables will achieve.

‍

At BitOoda, we can help you develop a power strategy that can be green and cost effective. A blend of direct initiatives and credits typically creates the best portfolio, while a diversification of energy resources creates a more sustainable outcome due to weather risk

Disclosures

Purpose This research is only for the clients of BitOoda. This research is not intended to constitute an offer, solicitation, or invitation for any securities and may not be distributed into jurisdictions where it is unlawful to do so. For additional disclosures and information, please contact a BitOoda representative at info@bitooda .io. Analyst Certification 11 David Bellman, the research analyst denoted by an “AC” on the cover of this report, hereby certifies that all of the views expressed in this report accurately reflect his personal views, which have not been influenced by considerations of the firm’s business or client relationships. Conflicts of Interest This research contains the views, opinions, and recommendations of BitOoda. This report is intended for research and educational purposes only. We are not compensated in any way based upon any specific view or recommendation. January 8, 2024 General Disclosures Any information (“Information”) provided by BitOoda Holdings, Inc., BitOoda Digital, LLC, BitOoda Technologies, LLC or Ooda Commodities, LLC and its affiliated or related companies (collectively, “BitOoda”), either in this publication or document, in any other communication, or through http on or ://www.bitooda.io/, including any information regarding proposed transactions or trading strategies, is for informational purposes only and is provided without charge. BitOoda is not and does not act as a fiduciary or adviser, or in any similar capacity, in providing the Information, and the Information may not be relied upon as investment, financial, legal, tax, regulatory, or any other type of advice. The Information is being distributed as part of BitOoda’s sales and marketing efforts as an introducing broker and is incidental to its business as such. BitOoda seeks to earn execution fees when its clients execute transactions using its brokerage services. BitOoda makes no representations or warranties (express or implied) regarding, nor shall it have any responsibility or liability for the accuracy, adequacy, timeliness or completeness of, the Information, and no representation is made or is to be implied that the Information will remain unchanged. BitOoda undertakes no duty to amend, correct, update, or otherwise supplement the Information. The Information has not been prepared or tailored to address, and may not be suitable or appropriate for the particular financial needs, circumstances or requirements of any person, and it should not be the basis for making any investment or transaction decision. The Information is not a recommendation to engage in any transaction. The digital asset industry is subject to a range of inherent risks, including but not limited to: price volatility, limited liquidity, limited and incomplete information regarding certain instruments, products, or digital assets, and a still emerging and evolving regulatory environment. The past performance of any instruments, products or digital assets addressed in the Information is not a guide to future performance, nor is it a reliable indicator of future results or performance. All derivatives brokerage is conducted by Ooda Commodities, LLC a member of NFA and subject to NFA’s regulatory oversight and examinations. However, you should be aware that NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets. BitOoda Technologies, LLC is a member of FINRA. “BitOoda”, “BitOoda Difficulty”, “BitOoda Hash”, “BitOoda Compute”, and the BitOoda logo are trademarks of BitOoda Holdings, Inc. Copyright 2024 BitOoda Holdings, Inc. All rights reserved. No part of this material may be reprinted, redistributed, or sold without prior written consent of BitOoda

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Many Shades of Green

Power Markets for Bitcoin Miners, 01/08/24

Key Takeaway #1

Key Takeaway #2

Key Takeaway #3

Key Takeaway #4

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