The US startup Digital Power-Optimization is seeking to secure under-utilised renewable power generation assets.
The growth in Bitcoin and other cryptocurrency mining, with the large power requirements of data centre-scale mining operations, is leading to the emergence of options for more optimal integration into the energy system.
One, in what appears to be a first, is demonstration of cryptocurrency mining in delivery of flexibility into the grid in Sweden.
Another has come in the form of the New York-based startup Digital Power-Optimisation by financial analyst Andrew Webber. The proposal is to offer cryptocurrency mining as a service as a means to smooth out load imbalances in the electricity system, particularly those resulting from the variability of wind and solar generation.
DPO’s offer is to start with analysis of a power generation asset’s performance over the previous 12-month period in order to develop an operational plan to maximise its profitability, based on factors such as operating costs, electricity pricing, excess generation and downtime.
DPO would then deliver, install and operate mining computers on site, which are matched to the power generation profile, ranging from as small as 0.5MW up to 100MW or more. Over time the operations would be fine-tuned, based on real-world experience of power availability and pricing.
“When a power generation asset or related infrastructure is not being used at 100% capacity 24/7, that presents an opportunity for improvement. Via cryptocurrency mining, DPO can provide power producers with a guaranteed always-available power off-taker,” says Webber.
“No longer do generation asset owners and operators need to curtail production or accept a price for their power below $x, because that is the equivalent value that can be captured through cryptocurrency mining at any given time.”
DPO’s offering is attracting interest. In October the company secured its first $100,000 in seed funding with a view to deploying small demonstrations.
Shortly thereafter in November the first mining operation was launched with Sangha Systems, utilising excess transformer and floorspace capacity at the company’s cryptocurrency mine-hosting and energy services facility in Hennepin, IL.
The two companies worked together to right-size a DPO-owned machine deployment powered through Sangha’s on-site substation. According to a statement, DPO’s Hennepin operations immediately became free-cashflow positive while simultaneously increasing Sangha’s revenue and profitability.
Subsequently in January of this year, DPO announced completion of a second round of $440,000 in seed funding, with which the company intends to increase headcount, ramp up marketing and business development efforts and deploy additional mining computers at new pilot locations.
Time will tell of the potential of the venture and its impact on renewables management and uptake.
DPO says it is in discussions with multiple power-generation partners and is seeking to expand operations to several sites around the US and Europe in the near future.
Webber brings previous crypto mining experience having acted as CFO of searCH4power, which focused on the use of flared gas as an energy source.