Imagine if you will, a seller of items that only worked under certain weather conditions. A car that only drives when it's sunny. A heater that only works when it's windy. Would you ever buy them? I don't think you would. Because it's illogical. Why would you want anything that worked on probability-based weather conditions?
Sure they're predictable to an extent, but have you ever noticed how much the forecast can change from hour to hour? There's an entire mathematical concept that was discovered when a meteorologist rounded a number in his weather prediction model. The outcome; a completely different prediction. Chaos theory was born.
Probability-Based Electricity: A New Framework For Wind And Solar
I think it's time to rebrand these intermittent electrical generation techniques. I'd like to introduce a new name which I think better captures their shortcomings: probability-based electricity.
Intermittent already implies that they are guaranteed not to work at least some of the time.
The intermittent nature of these sources necessitates the overbuilding of probability-based capacity. This is because the systems are based on weather conditions, the predictions of which are based on models - probabilistic models.
With wind generation specifically, there is a small window of wind speed where the turbines actually generate electricity. If the wind is too slow, the turbines can spin but will not actually generate electricity. If the wind is too fast, a brake is triggered so the turbines are not damaged. It's like the Goldilocks of electricity production.
Probabilistic weather breeds probabilistic electricity generation. Wind and solar are fundamentally probabilistic systems.
I can't imagine people would buy multiple cars, refrigerators or basically anything simply to mitigate the risk of inoperability during certain weather conditions. Imagine applying for a job and telling the prospective employer that you can only work if the wind blows hard enough or there's less than a certain percentage of cloud cover. When applied to almost anything else, the logic behind wind and solar doesn't make any sense.
Why would you want to waste money buying excess capacity since it's guaranteed not to work at least some of the time?
Can anyone say malinvestment?
Responsive Load Means Paying To Lose Money, Probabilistic Energy Makes It Worse
In a previous article I discussed the difference between baseload and responsive-load energy systems. The short story is that electricity producers maintain a constant load of electricity to cover the baseline demand. They also maintain responsive systems which are ramped up and down to meet the changes in demand through the day and as the seasons change.
What this means to me is that your electric bills not only need to cover the cost of electricity produced, but also the cost of maintaining production capacity that is not used much of the time.
Solar panels can make things worse. In a study conducted by Duke Energy in North Carolina, the excess amounts of solar energy throughout the day forced their gas-powered plants to ramp down the energy and then ramp back to meet demand after sunset. The result was actually more emissions, and more gas usage. It's akin to driving in the city versus on the highway. Reliable energy is not meant to go up and down, but because probability-based sources rely on the weather, that's exactly what they have to do.
Wind is a little simpler of a critique for me. It's not always windy; I rest my case, your honor.
Texas recently ran into trouble during a heat wave when the wind decided not to blow. Wind capacity was producing at as low as 8% of total potential output. To make matters worse, there were also some clouds that threatened solar production, requiring the grid operators to ask people to limit their air conditioner use in 100+ degree temperatures.
Even climate scientist Andrew Dessler admitted on "What Bitcoin Did" that wind and solar can't survive without a reliable baseload like coal or natural gas.
If it can't stand alone, I don't want it. Probability-based energy is not just a waste of money, it's dangerous if you have to rely on it. There's a reason hospitals use diesel generators for their backup power. Because it has to work, or people die.
But What About Batteries?
If you hate bitcoin mining, then man, you're gonna hate how much actual mining goes into producing your "green" batteries.
Here's an article about rare earth metal mining used to make batteries. Looks like the Congolese children are using hammers and chisels instead of heavy equipment. So I guess it fits the criteria for green? As long as they're not using electricity only to allow you to store electricity.
Even the World Economic Forum thinks batteries are bad. Finally something we can agree on. Now, go eat your bugs.
Sarcasm aside, people; if you want more stuff, like batteries, you need more things that make the stuff.
Though exploration is leading to the discovery of additional deposits in places like Idaho, you still gotta mine for that stuff, which if you recall, is not super green. At least in Idaho companies won't be able to rely on child labor. That's a plus.
Bitcoin Fixes This
The proof-of-work algorithm is not a waste of energy. Energy is not scarce, nor should it be. Through the use of bitcoin miners, stakeholders can monetize energy in ways that have never been done before, producing a litany of positive externalities.
In a previous article I discussed a few energy sources that miners were tapping into, essentially turning waste into cash, and helping to mitigate pollutants. I also introduced a concept I came up with: the elimination of variable load or on-demand electricity sources.
Electrical demand is not constant; producers have to instantly adjust the amount they're producing in order to ensure supply and demand so as not to cause blackouts or damage to infrastructure. Every second, however, that a proportion of the production capacity is not being used is essentially a waste of money.
Instead of building out excess capacity that is guaranteed not to work, or not to be used at least some of the time, I would push for more investment in reliable, baseload energy production systems like nuclear and natural gas.
Plants can be built to allow for population or city center growth, with bitcoin miners serving as the constant demand or energy sponge for the system. Power plants will run essentially at or near capacity, only ramping up and down the amount of mining they are performing to adjust the amount of electricity being released to the grid.
Wind and solar are probability-based energy systems. They are not a long-term solution, and worse, they are likely making our grid less resilient and potentially even adding to the emissions that environmentalists love to hate.
I am grateful for fellow authors and Bitcoiners like Level39 who continue to inspire me with their knowledge and creativity. Bitcoin mining can help make energy more abundant and affordable for everyone. It fundamentally changes the math behind new infrastructure investment. Bitcoin is the bridge between development and reality; we just need to walk across it.
- U.S. Senators wrote an open letter to the CEO of Fidelity regarding its bitcoin 401(k) plan.
- Senators condemned the financial institution for offering bitcoin as an optional retirement investment strategy.
- The senators ...