Crypto mining is a highly energy-intensive process and to create new virtual coins, the process involves the use of specialized computers that run constantly to solve complex math problems. 

Today, electricity prices are surging and Bitcoin prices are plunging, the process of mining is getting tougher and increasingly non-profitable day after day. Mining is a highly energy-intensive process, due to which Bitcoin has already become the point of attraction for global climate researchers and the media. To overpower the current situation, Behind-the-Meter Bitcoin Mining has gained significant traction.

For this, the miners are seeking Nodal pricing. Moreover, it exists throughout the Southwest Power Pool market with the price varying with local supply/demand conditions as well as transmission considerations.​

Major Issue faced by many Bitcoin miners at present

Profitability of mining Bitcoin directly depends of the factors such as the costs of equipment and cost of electricity – the difficulty associated with mining at present,  as well as the market value of bitcoin.

According to cryptocurrency experts, any big crypto mining firm owns a capacity to require electricity equivalent to what can fulfill all the household demands of Houston in Taxes for example. Such energy consumption for crypto mining activity led to the increasing cost of electric utility bills.

In power market terms, according to a report, “Bitcoin is “mined” at a price of $50,000 per bitcoin, which is equivalent to selling power at a price of more than $400 per megawatt hour. This compares to wholesale electric prices that typically range from $20 to $60 per megawatt hour and that rarely exceed $100 per megawatt hour absent super peak pricing.”

Moreover, in the United States, cryptocurrency mining is expected to have more miners as the country is an attractive mix of increasing renewable penetration, low-cost generation, a complimentary regulatory environment, and a reliable legal system.

Specific client requirements

• Research on Southwest power pool transmission market.
• Are there any pricing nodes on the SPP system with frequent lows or negative price signals?
• How often that happens & for how long.

SPP market analysis: High congestion impacts hub price spread

The wholesale power market and electric grid of the central United States is managed by the Southwest Power Pool Transmission. As a regional transmission organization, the nonprofit corporation is authorized by the Federal Energy Regulatory Commission to ensure adequate transmission infrastructure, reliable supplies of power, and competitive wholesale electricity prices. 

Usually, windy days in the Southwest Power Pool (SPP) market increase North Hub and South Hub price differences. 

There is a huge hub price spread on a windy day in the SPP region. High transmission congestion in the south causes a bullish effect on the South Hub prices.

The main pricing hubs in SPP are the North Hub and South Hub, located in Nebraska and Oklahoma, respectively. Nodal pricing exists throughout SPP with pricing varying with local supply/demand conditions as well as transmission considerations more generally. Nodal pricing is aggregated to calculate energy prices for separate energy zones, as well as the energy price at interconnection points with neighboring regions.

Results and Findings of the research explained:

• In-depth research on SPP Market.​
• To prepare a profitable Bitcoin Mining Model by identifying the nodes with the negative LMP.​
• Identify pricing nodes with low or negative pricing signals along with the frequency of power prices going negative throughout the year in the Southwest Power Pool Market.​
• How often the power drops below $10 megawatt/hr?
• Factors affecting the negative power pricing

Peak Blockchain market research team of experts helped the client to understand the Electric Grid market for Western Oklahoma & Kansas. Also, they helped them identify various factors affecting negative power pricing.​

One of the major highlighting factors that helped our client to find the solution to his major problem is that the frequency of the power dropped below $10 MW/Hr.​ 

Conclusion

Behind-the-meter cryptocurrency mining makes the operation ideal for mining digital currencies. It can be an opportunity for both miners and electricity suppliers. Authorities of the power plants shouldn’t view crypto mining as something they have to deal with, instead, they must see it as a source with a differentiated load that creates new avenues to sell electricity for their existing asset base.

A powerplant that uses electricity generated by behind the meter operations can energize its own crypto-mining operations. This can let investors tap into the profitability o two markets, one is cryptocurrency as well as energy market.

By partnering with peak Blockchain cryptocurrency experts, one can aim to develop a ‘one-of-a-kind project’ that can stay profitable and continuously grow.