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On Monday, Energy Web, which builds operating systems for energy networks, and RMI, a nonprofit that seeks to accelerate the energy transition, launched a new approach to assess purchases of what are known as Renewable Energy Credits, or RECs. The groups will focus on the bitcoin mining industry, which consumes an increasingly large share of the world’s electricity.
While all efforts to switch to carbon-free energy are generally good, some are better than others. Yet, at this stage, there has never been a way to measure the precise impact of RECs in creating a more sustainable network. The new approach, dubbed Green Proofs for BTC, would create a certification process for energy-intensive industries on the path to decarbonization.
It weighs several factors to determine if a bitcoin mine actually helps clean up the grid, including the amount of renewable energy purchased, location and impact on the local grid, and specific renewable energy operations to determine the credit value. The groups point out that an REC from an existing clean-energy power plant in California, where the grid is already well on its way to decarbonization, is worth less than an investment in clean-energy generation in Poland, where coal is still in high rotation.
“With this approach, we can create an environment where more impactful renewable energy purchases are recognized,” Jesse Morris, CEO of Energy Web, told Protocol.
“We can do better,” Morris added. “By rewarding more impactful renewable energy purchases, we can generate more money for renewable energy projects with the most impact.”
While the approach is theoretically applicable to any power-hungry sector where REC purchases are prevalent, the groups use bitcoin mining as a case study. Cryptocurrency mining has come under intense scrutiny from the public and regulators given its burgeoning carbon footprint. Energy Web and RMI created the Crypto Climate Accord, which aims to bring crypto miners in line with the goals of the Paris Agreement, and the groups say the new approach to monitoring RECs will “complement” that and other efforts to clean up the industry.
Eventually, the groups plan to create a certification program to certify renewable mining and hosting operations, which will assess a mine’s actual emissions and the emissions that its REC purchases mitigate. Assuming all goes well, the certification approach and process can essentially be copied and pasted for other industries, with some basic electricity consumption adjustments.
Morris said the cryptocurrency industry is well suited as a trial because of the need for speed. The field is new enough that companies are ready to change on short notice and take risks, whereas older power or data companies can be slow and in many cases have taken decades to figure out how to reduce their emissions. A number of bitcoin miners advised Energy Web and RMI in developing the approach.
“The crypto industry, and Bitcoin in particular, is under immense pressure to become 100% renewable,” Morris said. “If crypto can be at the forefront of innovation in decarbonizing the network, it will go a long way to eliminating the black eye the industry has had on the carbon footprint front.”
RMI and Energy Web are currently seeking stakeholder feedback until June 10.