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Cryptocurrency Mining’s Untold Emissions Story

By Sean Hanley, Pickering Energy Partners
The views expressed by the author are their own and do not represent the views of Energy Workforce & Technology Council.

Without debating the checkered past and overall financial merit of the commodities known as “cryptocurrencies” I wanted to bring awareness to the electricity demand that mining for these digital currencies’ places upon power grids. First, let’s define what cryptocurrency is. A cryptocurrency is a digital currency designed to work as a medium of exchange through a computer network (blockchain) that is not reliant on any central authority, such as a government or bank, to uphold or maintain it.  It is generally viewed as a distinct asset class in practice, but one must question what this market would look like if another 2008 or Black Monday financial crisis were to occur.  Many proponents argue that the de-centralization and lack of oversight are what gives the asset value in times of extreme volatility.  As it applies to the environment, the story remains largely untold to the public.

The EIA states that “crypto miners” represent approximately 0.6 – 2.3% of all Unites States’ 2023 electricity demand.[1] On the low end, they’re consuming as much energy as the entire state of Utah!  “The estimate of U.S. electricity demand supporting cryptocurrency mining would equal annual demand ranging from more than three million homes to more than six million homes.[2]

To put it another way, the Cambridge Centre for Alternative Finance estimates that Bitcoin mining consumes around 120 terrawatt-hours (TWh) annually, which is comparable to the electricity consumption of countries such as Argentina or Norway!  Norway leads the world in EV adoption, with 93.9% of new car sales being electric in 2024.  Other cryptocurrencies can vary widely in how much electricity they consume annually.  Factors affecting electricity consumption include:

  • Mining Difficulty & Hash Rate (Number of guesses/attempts to solve the cryptographic puzzle per second) – The complexity of the mining process and the number of miners on the network drive electricity demand
  • Energy Efficiency of Mining Equipment – Advances in mining hardware, such as the development of more efficient ASIC (application-Specific Integrated Circuit) miners, can impact overall electricity usage, however these advances are offset by the demand for more powerful mining equipment
  • Geographic Distribution of Miners – The location of mining operations can impact electricity consumption patterns due to the variation between renewable vs. fossil fuels used in different regions

Cryptocurrency mining is draining power grids during peak periods of demand, generally driving electricity prices higher for consumers, and the overall carbon dioxide (CO₂) emissions profile is poor.  As we know, the primary source of electricity generation are fossil fuels (approx. 70-80%), and thus, if crypto mining continues to increase, so too, will the need for electricity and subsequent CO₂ emissions. 

In 2021, China banned all cryptocurrency mining, and that pushed additional mining operations into the U.S.  Given the global movement towards decarbonization, rising utility costs across the country, overall grid supply/demand strain, combined with the uncertain long-term economic value of cryptocurrencies I would make the case to regulators to investigate and require thorough emission reporting by all cryptocurrency organizations. 

If we are placing regulatory scrutiny upon energy participants, the very least we could do, short of banning cryptocurrency mining outright, would be to require disclosure (specifically, data on electricity consumption and subsequent fossil fuel emissions due to power generation) on par with that is required of public and private companies today.  Levying fines and taxes should also be strongly considered to provide a disincentive to mining during peak demand hours.  US taxpayers should not have to endure higher utility prices to subsidize the speculative cryptocurrency mining operations of the minority. 

Crypto mining’s environmental externalities sure seem to outnumber their benefits, but maybe I’m too “out of date” to understand such a complex digital asset that is not recognized as a medium of transfer outside of the country of El Salvador and is more frequently involved in rampant speculation and money laundering schemes than providing tangible economic utility for society.



Energy Workforce partner Pickering Energy Partners provides insights on ESG due diligence, disclosures and reporting. Garrett Delk is Associate, ESG Strategy & Integration.


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