Usage of non-renewable energy in Bitcoin mining increased by 13% in 2021 Usage of non-renewable energy in Bitcoin mining increased by 13% in 2021

Usage of non-renewable energy in Bitcoin mining increased by 13% in 2021

Renewable energy sources in BTC mining fell to 28.48% in 2021 from over 40% in 2020, causing greenhouse gas emissions to increase by 63%.

Usage of non-renewable energy in Bitcoin mining increased by 13% in 2021

Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.

The Cambridge Centre for Alternative Finance (CCAF), which tracks the electricity consumption of Bitcoin (BTC) mining, added the sources of energy in a major update on Sept. 27. According to the data, the sustainable electricity mix in bitcoin mining declined by 13% in 2021, compared to 2020.

Electricity from natural gas and nuclear energy saw the highest increase last year. Usage of electricity from natural gas nearly doubled from 12.83% in 2020 to 22.92% last year. On the other hand, the share of nuclear energy in the Bitcoin mining electricity mix more than doubled from 4.02% in 2020 to 8.85% in 2021.

Electricity produced from oil increased marginally to 1.47% from 1.21% the year before. Coal remained the largest source of Bitcoin mining electricity, despite its share falling to 38.23% from 40.37% in 2020.

As a result of the increasing use of fossil fuels, non-renewable energy sources accounted for 71.47% of the electricity consumed by Bitcoin mining in 2021, the data indicates.

The use of hydroelectricity saw the sharpest decline, dropping from 33.67% in 2020 to 18.5% last year. However, hydropower remained the largest source of renewable energy for Bitcoin mining.

Solar and wind energy use increased marginally from 1.83% and 5.19% in 2020 to 2.73% and 6.02% in 2021, respectively. The data shows that the share of other non-renewable energy sources grew to 1.23% from 0.46% in 2020.

Overall, the share of renewable energy sources in the Bitcoin mining electricity mix declined from 41.15% in 2020 to 28.48% in 2021, according to the CCAF data.

The decrease in renewable energy usage, in turn, pushed greenhouse gas emissions from Bitcoin mining to an all-time high of 56.29 million tonnes of carbon dioxide equivalent (MtCO2e) in 2021. It indicated an increase of over 63% from the 34.37 MtCO2e emitted in 2020.

Why the sustainability mix of bitcoin mining power deteriorated

According to Cambridge analysts, China’s ban on Bitcoin mining imposed in June 2021 played a role in the sustainability mix of BTC mining power. In a report, the analysts noted that before the mining ban, miners in China seasonally migrated within the country.

During the rainy season, when water levels rose, miners moved to regions with abundant cheap hydropower. During the dry seasons, miners moved to thermal power plants when the water levels fell. The report noted:

“…the Chinese government’s ban on cryptocurrency mining and the resulting shift in Bitcoin mining activity to other countries negatively impacted Bitcoin’s environmental footprint.”

But the impact of China’s mining ban was limited since China’s share of mining power fell to zero, irrespective of the brief spike in September 2021.

However, as the miners relocated to other countries after the Chinese mining ban, the relocation region impacted the sustainability mix of Bitcoin mining electricity.

For instance, in countries like Kazakhstan, where several Chinese miners relocated, electricity is primarily produced from fossil fuels. Sustainable energy sources only account for 11% of the electricity mix in the country.

But in Sweden, which only accounts for a minuscule share of Bitcoin mining, 98% of electricity is generated from renewable resources. Therefore, the environmental footprint of Bitcoin mining depends on the mining hashrate in each country.