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Bitcoin Mining With Renewable Energy Sources – A World Beyond Wind and Solar | AIM Summit Dubai 2022

November 25, 2022

In this presentation, the CEO and chairman of Marathon Digital Holdings, a NASDAQ-traded Bitcoin miner, discusses the evolution of Bitcoin mining with renewable energy sources beyond traditional solar and wind. The historical reliance on cheap energy sources for mining has shifted due to China's mining ban, prompting many companies to adopt renewable energy in North America, particularly in the U.S. This transition has led to a more sustainable approach, with the sustainable energy mix rising from 36% in Q1 2021 to 56% post the China migration. The speaker highlights the potential of harnessing untapped renewable sources such as nuclear, geothermal, tidal, and bio waste to power Bitcoin mining operations, emphasizing economic viability and positive environmental impact.

00:01 Marathon Digital Holdings Introduction

00:44 Mining: From Cheap Fuel to Migration to US

01:40 Transition from Fossil to Renewable

02:50 The Duck Curve & Energy Use

04:35 Excess Energy & Bitcoin Mining Opportunity

06:41 Other Renewable Energy: Nuclear, Geothermal, Tidal

07:48 Bio Waste as Energy Source

09:56 Electrification & New Microgrid Needs

Transcripts are autogenerated. May contain typos.


foreign teal I'm the CEO and chairman of the board of marathon digital Holdings we're a NASDAQ traded um Bitcoin miner with operations predominantly in the U.S we're a proud sponsor of this event and would like to send our appreciation to Raha and Dalma capital for inviting us here we appreciate being part of the event so I'm going to talk a little bit about Bitcoin mining with renewable energy sources and the world Beyond just solar and wind um many of you may be familiar with the fact that historically Bitcoin mining operated


using just the cheapest least expensive fuel sources around then with the prohibition of Bitcoin mining in China there was The Great Migration to North America and in that phase of Great Migration many companies um as they moved to the U.S immediately went from being coal burning miners to renewable energy miners because a lot of the energy in the U.


S being built out today is renewable a lot of that energy is stranded and therefore is very inexpensive and is perfect for Bitcoin mining so I'm going to talk a little bit about renewable energy different Alternatives that exist and then also talk about what we believe is a very promising fuel source for the future Safe Harbor statement all public companies have to put this up there so no need to read it um unless you're planning on trading in the stock immediately afterwards so Bitcoin money as I said is becoming increasingly more sustainable uh if you


go back to uh q1 of 21 before the transition from China most of the energy mix was fossil fuel high carbon producing so roughly the renewable mix was only about or their sustainable mix was about 36 percent that then quickly jumped to 56 percent and as you can see quarter by quarter will continue to increase the sustainable mix of energy very few Industries can convert from heavy fossil fuel heavy polluting at fuel sources to sustainable sources as quickly as the Bitcoin mining industry and this is something I'm very proud to


say Marathon has been very proactive in when we initially were mining uh we were mining at a facility that was coal powered by a coal-fired plant albeit a very clean one but it was still a coal-fired plant today we have no mining operations at any fossil fuel plants and all our operations are behind the meter at wind farms predominantly in West Texas today so Bitcoin miners have focused on solar and wind and those of you who are familiar with this concept called the duck curve it has to do with how energy is used during the day imagine a


silhouette of a duck the tail over here then this Belly of the duck and then the big the um nib if you would and neck renewable energy is available in the form of solar typically from 9am to 3 P.M wind energy is more typically available in the afternoons Peak energy consumption is between 4 pm and 9 pm which means that solar energy does very little to contribute to the energy available for Peak energy load but you also have to look at how energy is used on the grid at the bottom is nuclear nuclear is not a very variable fuel source you turn it


on and has to run so it's what's called base load above nuclear comes cold typically because it has a similar characteristic you can't turn coal on and off very easily then you add natural gas natural gas can be turned on and off and it's a great variable load source and so you think about the base of the energy pyramid is nuclear then coal than natural gas only then do you get solar and wind energy which are interruptible meaning this is the energy that the grid turns off first and foremost when they don't need it


again remember Peak energy is 4 pm to 9 pm middle of the day low energy need in the morning a little bit of energy need so what ends up happening is there is a ton of solar energy that gets curtailed in the U.S for example which means shut down because it's not needed there are even times in Texas where energy pricing can be negative meaning there are energy providers who will pay you to take energy so this is very different than the model in Europe where you have an energy shortage going on in the US you have


true excess energy and the only incentive for renewable energy developers to build more renewable energy is if they have customers and to have customers in the traditional model they have to have transmission lines which means they have to have distribution of that energy people will not build transmission lines to new renewable sites unless the transmission lines are connected to Consumers and the problem is there is lots and lots of renewable energy that has been built in the US that is so far from consumers that they


can't sell most of the energy they make and that is a perfect place for Bitcoin miners to operate so why is this a perfect place so let's talk about how solar and wind pose unique challenges so for the first thing wind energy and solar is interruptible so if they can only sell their energy let's say 10 of the day then they have to charge the grid very high prices in order to get a good Roi on their sites on their development projects if they had a base load customer like a Bitcoin miner who sits behind the meter can


consume all the excess energy that lowers the break-even point essentially for that power plant when they sell energy to the grid and so it makes them more economically viable and lets them operate longer Bitcoin miners can consume the stranded energy and can deal with the intermittent nature of that power why because Bitcoin miners can shut down their systems in 10 minutes you can't do that with an aluminum smelter you can't do it with a car manufacturing plant you can't do it with food processing you can only do it with


something like high performance Computing or Bitcoin Miners and then when energy is available again you can turn them right back on and within half an hour they're up and running so the deal between the Bitcoin Miners and the energy companies is I'll soak up that excess energy if you give it to me at a low price and so they're willing to negotiate very attractive prices to bitcoin miners from an ESG perspective the benefit is that this is renewable energy source it's wind it's solar could be geothermal


could be other forms and so that gives miners the ability to truly operate with renewable energy for the operator of the power plant it gives them the opportunity to have improved profits as well but there are other underutilized and untapped opportunities not just solar and wind if you look about the Energy Mix today wind and solar represent only about a quarter of the clean energy generation mix Hydro is 40 percent nuclear is 26 percent wind solar then biomass bioenergy and then you have other forms beyond that


so let's talk about nuclear nuclear is technically sustainable energy people would argue is it green or is it not I'm not going to go into that discussion but nuclear is a form of energy that is sustainable and is broadly available in many markets today the problem is it's hugely expensive to build very hard to get licensed and it's very regulated and at the end of the day all of those things add up to make it very expensive energy actually geothermal energy is available in certain places in the world where you


can drill down essentially tap the heat from the magma layer of Earth and create steam which then fires a steam fired generator problem with geothermal is at scale it's still quite expensive to operate and there's a lot of Maintenance related to it tidal energy this is essentially using wave energy again very costly very hard to have large-scale utility scale plants of this so what about bio waste most people don't think about biowaste as a true fuel source for 30 megawatts 50 megawatts 100 megawatts


but there are huge landfills full of garbage that today are emitting methane just like the flare gas you have in oil fields there's a type of methane that comes out of material that's rotting in the ground you could also think about dairy farms that produce huge amounts of cow manure anything that generates methane can be used as fuel the problem is most of these facilities aren't connected to the grid because the grid doesn't want to connect to them and they've historically been expensive to


use for energy generation because the traditional model has been to use methane from these sites refine it enough so it can be put into an LPG gas line but imagine if you could burn that methane at source without having to enrich it or refine it in any way and that technology is now available and we believe that there's a great opportunity for Bitcoin miners to actually mine at biofuel sites at utility scale with energy that's available 24 7 365.


on the one hand you're taking methane which is 75 times more of a climate disaster than carbon dioxide and converting it to carbon dioxide that's a huge saving for the planet right there the other benefit is you're creating more energy generation so as the electrification of the economies in the U.


S Europe and other places happen you're creating more sources of energy on how many of you may be read recently but Bloomberg said that electrification of long distance transport trucks semi-trailers in the U.S lorries in the UK will require that charging stations have access to 35 to 50 megawatts of power per charging station this is like a small town where are they going to get the energy from people aren't going to build power plants next to recharging stations so we're going to need new types of microgrid energy production like biofuel


like solar like wind Etc which are really going to drive these things so convert bio waste into Bitcoin we think it's an interesting strategy and should be followed the other benefit to electrical generation using biofuel is that you can earn renewable energy credits which when sold can actually subsidize your cost of energy lowering your cost of energy and making that a very attractive Source your off-grid you're not parasitic to the grid and you're in a very symbiotic relationship with the environment


so with that I'll let you stew on this slide just to see how it could transform our industry and I know time's up so I'm going to end this right here thank you very much