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Crypto Mining's Growing Influence on Power Markets
By Sarp Ozkan November 16, 2022
The rapid expansion of cryptocurrency mining has led to its increasing dominance in the United States, where more than one-third of global miners are now concentrated. Notably, for Bitcoin alone, dly network power demand is estimated at around 10-15 gigawatts, roughly equivalent to 0.4-0.9 of annual global electricity usage. Miners are strategically locating operations in areas that offer access to low-cost power sources to maximize profitability.
The United States emerges as an attractive destination for miners due to the avlability of renewable energy generation, providing them with options for inexpensive electric supply. Moreover, crypto mining offers a reliable load during times when traditional network demands may be less prevalent, balancing out the intermittency of renewable energy sources.
In our recent webinar titled Crypto Mining's Growing Role in Power Markets, we explored several key aspects:
Basics of Crypto: We discussed the concept of hash rate, network power demand, and electricity consumption to provide a foundational understanding of how crypto mining operates.
Profitability Correlation with Electricity Prices: The direct relationship between miner profitability and fluctuating electricity costs was highlighted as crucial for strategic decision-making.
Identifying Regions with High Negative Hours: We delved into the specifics of how regions are being evaluated based on their average generation output, dly LMP values, and specific characteristics such as curtlment impacts and price drivers during peak times.
Addressing Constrnts in Electricity Pricing: Understanding causes behind power prices is essential. We discussed how factors like congestion due to excess power demand, distribution challenges across various locations, and areas with a surplus of negative hours can significantly influence pricing dynamics.
A recording of the webinar can be accessed hereWebinar Replay Link.
Sarp Ozkan VP of Commercial Product at Enverus
With over 10 years of experience in research and modeling for upstream, downstream, and power markets from his tenure with Ponderosa Advisors post-acquisition by Enverus, Sarp has proven himself a valuable resource for the energy sector. Not only is he a media expert on matters related to energy and has provided guidance to state regulatory bodies across the U.S., but he also leads projects in areas such as mergers acquisitions MA strategy inquiries.
His academic background includes publications in peer-reviewed journals and presentations at conferences worldwide, further solidifying his reputation as an authority within the industry. Sarp holds a Master of Science in Mineral and Energy Economics from the Colorado School of Mines, another in Petroleum Economics and Management from IFP School, and a Bachelor of Arts degree in Economics from the University of Chicago.
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