finbold.com
Gridless, a platform that supports distributed, rural, hydro Bitcoin (BTC) mining, has suggested that Kenyan villages can reduce energy costs significantly by plugging mining into local mini-grids.
According to Gridless, Bitcoin mining can play a crucial role in opening up the electricity market in Kenya and African rural communities with the existing abundant energy potential, the platform said in a blog post published on September 26.
Gridless notes that rural Kenya has significant resources for general renewable electricity, but it is more expensive for locals to maintain connections. In this line, Gridless notes that Bitcoin mining is among the ideal means of attaining energy production scale.
“Bitcoin mining provides a productive use of the excess energy that is always available as a responsive baseload (a flexible buyer of last resort). Mining operations effectively provide a price floor for standalone electricity grids, making it easier for grid operators to plan, which ultimately increases operational and market efficiency. <…> Standalone grids can be operated at sufficient scale to ensure financial sustainability while providing electricity services to communities,” Gridless said.
Reducing costs by 90%
At the same, Nick Hasen, the CEO of Bitcoin mining firm Luxor Mining noted that incorporating mining into the mini-grids will cut costs by 90%.
“So they’re (villagers) paying for 100 kW but only using 10 kW, which makes their power pricing very expensive. Plugging in a few bitcoin miners to offtake the excess power will effectively reduce their power prices by up to 90%,” Hasen said.
If the model is adopted, it has been viewed to have the ability to distribute the Bitcoin hash rate in Africa, which Gridless pointed out is “woefully underrepresented.”
With most rural areas receiving significant rainfall, Gridless recommends that Bitcoin mining can also drive energy producers to efficiently build additional capacity to make electricity available to broader communities.
The regulatory question
Notably, the idea is backed by the changing Kenyan regulatory landscape on power production, with the government making it easier to set up projects under 1MW. Therefore, Kenya has generally recorded an increase in new mini-grid energy projects leveraging solar, wind, geothermal, and hydro.
It is worth noting that despite Kenya having a flexible regulatory landscape for setting power-generating projects, the case is not for Bitcoin mining. Currently, no laws exist regarding managing mining activities and the general crypto space.
However, Finbold previously reported that the country’s leading power generating company KenGen was open to attracting Bitcoin mining operators. Under the plan, KenGen intends to supply miners with surplus geothermal power following increased operator demand.
Meanwhile, Kenya’s central bank governor Patrick Njoroge admitted pressure to convert the country’s reserves into Bitcoin in late September, although, according to Njoroge, the notion was ‘craziness,’ noting that converting the reserves into Bitcoin would be a risk considering the digital asset’s volatility.