According to a recent report, Bitcoin mining could account for as much as 0.5 percent of global electricity demand by the end of 2018. “Mining” is the process by which a global network of computers verify Bitcoin transactions, and running all of those computers uses a lot of energy. As electricity demand for mining Bitcoin and other cryptocurrencies grows, there are concerns that cryptocurrency’s energy consumption will undo the progress society has made in reducing greenhouse gas emissions.

If operated differently, however, crypto-mining could allow for more renewable energy sources like wind and solar to be integrated into our electricity systems. By running off electricity that would otherwise be curtailed because of low demand, crypto-mining could allow more clean energy to be profitably built on the grid.

Favorable policies and rapidly decreasing costs have resulted in more wind and solar being built than any other electricity source in recent years. Despite these gains, the fundamental challenge for variable renewables to replace conventional generation technologies is their intermittency — they only run when the wind is blowing or the sun is shining.

Dealing with intermittency often involves building excess capacity. If you build enough wind turbines, they can still generate a lot of electricity even when the wind isn’t blowing very hard. The downside of excess capacity is that generation has to be curtailed, or “turned-down,” when the wind is blowing full speed and generation exceeds demand. As more turbines are built and the rate of curtailment increases, the economic value of each new wind turbine is less than the one before, making it tough for developers to keep expanding.

Texas has been a leader in implementing two strategies for dealing with intermittency and excess capacity — transmission and energy storage. In 2005, the Public Utility Commission of Texas designated several “competitive renewable electricity zones” (CREZ) where new transmission capacity was built to bring wind energy from wind-rich West Texas to population centers in North and Central Texas. From 2009 to 2014, average wind curtailment in Texas decreased from over 16 percent to less than 2 percent, and the fraction of the state’s electricity generated by wind more than doubled. More recently, companies have invested in grid energy storage in Texas, mostly batteries built on site at wind farms. Texas, already the top state for wind generated electricity, is now also one of the top states for battery storage capacity.

Despite these success stories, there are reasons to be wary of relying on transmission and storage to solve the problem of renewable intermittency on their own. They’re expensive, and transmission projects in particular often face serious opposition from the public. These challenges are not insurmountable, but they warrant considering alternatives.

Another strategy is “flexible demand,” or shifting demand for electricity to times when renewables are over-generating, and there are both technical and economic reasons why crypto-mining may be well-suited to operate as flexible demand. For example, flexible demand processes have to be able to ramp up and down quickly in response to generation, and, unlike many industrial processes, crypto-mining machines can ramp from zero to a hundred percent in a matter of minutes.

Another challenge for flexible demand is capital utilization. For most processes, it isn’t cost-effective to buy new, expensive machines and then only run them when wind or solar are over-generating. Top-of-the-line mining rigs cost thousands of dollars, and, for most crypto-mining operations, the cost of electricity prohibits all but the most advanced machines from being profitable. If electricity is cheap enough, however, then even older, cheaper units can operate profitably on a part-time basis.

One downside of using crypto-mining for flexible demand is time sensitivity. When you want to watch a show on Netflix or make a purchase with your credit card, it’s important that there are computing processes ready to go on demand. Similarly, mining rigs need to be online to verify cryptocurrency transactions. For some uses of cryptocurrency, like sending international remittances, users may be willing to wait several hours for their transaction to be verified. For other applications, like purchasing a cup of coffee, such a time lag is a nonstarter. With enough redundancy and geographic variation in the location of mining rigs, however, there can always be computing resources available somewhere.

In a vacuum, cryptocurrency might appear to many as little more than a curiosity — a libertarian techie fantasy with little real-world import. In light of its potential environmental impact, it’s reasonable that people would view cryptocurrency more critically — as a subversive, speculative boondoggle that threatens to undo any progress we’ve made toward transforming our energy systems to combat climate change. Deploying crypto-mining machines as a form a flexible demand, however, could turn a cause of consternation into a key strategy for integrating more renewables into our electricity systems.

The views expressed in this article are the author's own.