“Bitcoin mining offers something batteries never can: a scalable way to instantly monetize surplus electricity. Instead of paying to curtail renewable energy, we can turn that excess into digital value. That shift creates true energy abundance while strengthening the grid at the same time.”
– Kent Halliburton, CEO of Sazmining
Four Challenges of Energy Markets
While pondering Bitcoin’s role in energy economics from my last such article, I couldn’t help but notice Bitcoin could be a solution to four novel challenges we’re facing in today’s energy markets:
- Market volatility from wars — like the European natural gas price spikes in 2022 — and unexpected tariff news that affected global supply chains.
- Energy transition pressure from net zero policies, which affects business in fossil fuels.
- Fast diminishing purchasing power and assets value, from inflation. Even the S&P 500 averages only 10% a year and gives away ~3% of its money to the dollar inflation rate before taxes. If there’s a currency exchange involved, another 3% is likely to disappear (if one were to mirror the dollar inflation rate).
- Climate and weather uncertainty, a bane to renewable energy systems (RES) worldwide.
The integration of volatile renewable energy sources into the electricity grid is perhaps the biggest challenge energy markets are facing today.
RES is the fastest-growing energy infrastructure on the planet. However, problems such as intermittency, poor energy density, and slow response times for load balancing derail investment and effective risk management.
These make RES a pain rather than a blessing of abundant, cheap energy (the sun provides the earth with 7,000 times more solar energy than is used annually via fossil fuels). To mitigate the downsides of energy volatility, many renewable energy systems have turned to batteries for load balancing.
But are batteries the right solution?
In a data analysis I recently conducted, the conclusion was that batteries are not as efficient as bitcoin mining to balance grids.
Batteries are so inefficient that they bleed hundreds of millions of dollars every year in the U.S. alone. That energy should be seen on traders’ balance sheets, helping them weather the first three problems I mentioned.
In fact, solving this one problem globally could be a huge step forward in the direction of bolstering energy markets, and could tip the scales ever more in favor of bitcoin mining.
With an increase in Bitcoin adoption, the third problem of inflation diminishes faster (there is zero inflation with Bitcoin, the coins are fixed at 21,000,000) while the second becomes more aligned with reality (using devaluing paper to buy expensive energy is a no-brainer).
Ultimately, the first problem, the ROI of warfare, is expected to significantly change on a hard money standard, leading to more harmonious world affairs.
As a recap, here’s my thesis:
Bitcoin Mining is the best tool for load balancing electricity grids, significantly outperforming the ROI on storing energy in batteries when surplus electric power crosses into the MWh range.
Data Analysis
In an attempt to prove the thesis mathematically, I’ve crunched the numbers. Or rather I let AI crunch the numbers, to be blunt. Below is a data analysis generated with the help of ChatGPT.
Firstly, it sourced data for;
- Why mining can monetize surplus energy better (per MWh)—[1], [2], [3], [4], [5], [6]
- Assumptions used on
Thereafter, it did a data analysis comparing the ROI when load balancing using bitcoin miners vs using batteries of similar size.
Summary of Data Analysis
Below are the data for Bitcoin vs batteries on the utilization of surplus renewable energy.
Lets discover why bitcoin mining delivers higher ROI than batteries.
Bitcoin miners (current hashprice ≈ $0.054/TH/s/day, ASIC ≈15 J/TH, after pool fee + $5/MWh site cost): → ≈ $0.142 per kWh of surplus electricity.
Calculations for Bitcoin Mining
- Convert efficiency to energy per TH/s-day: A device that is 15 J/TH uses 15W per TH/s.
Energy per TH/s-day: E=15W×24h=360 Wh=0.36 kWh. - Gross revenue per kWh (before fees/costs): Hashprice is dollars per TH/s-day; divide by energy per TH/s-day.
R_gross=H/E=0.054/0.36=$0.15/kWh. - Apply pool fee:
R_after_fee = R_gross × (1−f) = 0.15 × (1−0.02) = $0.147/kWh - Subtract site O&M cost:
R_net=R_after_fee−0.005=0.147−0.005=$0.142/kWh.
Calculation for Batteries
Li-ion battery (round-trip efficiency 85%):
If it sells energy at $40/MWh (a common wholesale average) → ≈ $0.034 per kWh.
Even at a high peak price $70/MWh → ≈ $0.060 per kWh.
Revenue per kWh stored and then discharged:
Revenue, R = P × efficiency
Where
P is the market price per kWh sold.
At $40/MWh:
R = 0.040 × 0.85 = 0.034 $/kWh
At $70/MWh:
R = 0.070 × 0.85 = 0.0595 ≈ 0.060 $/kWh
This shows that bitcoin miners deliver a higher cash return per unit of surplus energy than batteries, even with peak battery efficiency returning ~ $70/MWh
Outperformance Percentage (per kWh)
Versus a battery selling into a $40/MWh market:
(0.142–0.034)/0.034≈318.
Versus a battery selling into a $70/MWh market:
(0.142–0.060)/0.060≈137.
This shows bitcoin miners return 3.18x more money than batteries on the high end, or 1.37x more money on the low end.
Absolute Profit Gap
At $40/MWh case: Bitcoin earns about $0.108 more per kWh of surplus.
At $70/MWh case: Bitcoin earns about $0.082 more per kWh of surplus.
This shows that bitcoin mining overall returns $0.108 per kWh of surplus electricity on the high end, and $0.082 per kWh on the low end more than batteries.
Multiply this by the amount of TWh of curtailed renewable energy worldwide, and you’re looking at millions to billions of dollars to be made.
Examples
- California (CAISO), 2024 curtailment = 3.423 TWh (3.423×10⁹ kWh) — [11]
Mining vs $40/MWh battery: $0.108 × 3.423e9 ≈ $370M
Mining vs $70/MWh battery: $0.082 × 3.423e9 ≈ $281M - Texas (ERCOT, West Zone), 2024 curtailment ≈ 5.3 TWh (3.1 TWh wind + 2.2 TWh solar) — [12]
Mining vs $40/MWh battery: $0.108 × 5.3e9 ≈ $572M
Mining vs $70/MWh battery: $0.082 × 5.3e9 ≈ $435M
Curtailment data for CAISO comes from the U.S. Energy Information Administration (EIA), while curtailment data for Texas (ERCOT, West Zone) is from FactSet.
Alas, CAISO and ERCOT might be letting this money go by. Here is a joint CAISO and ERCOT document published on August 6, 2025 [13]
One can see that it’s written in favor of batteries right from the title, and it makes no mention of Bitcoin mining (ERCOT and CAISO Demonstrate System Reliability Benefits of Renewables and Energy Storage)
“…discussion will focus on the ways in which renewables can bolster grid reliability”, it says.
But who will bolster the reliability of these renewables? Quis custodiet ipsos custodes?
I then postulated at least one mention of curtailment agreements as a DR – Demand Response (given how renewable energy fluctuates, large renewable energy systems curtail / let go some excess power generation e.g., by covering solar panels. Now if this was connected to a bitcoin mine, no power would be let go).
There is a mention on page 7 with a link – [14]. However, no figures are given even there. Not fair, CAISO and ERCOT!
Going back to page 7, we read: “Demand response refers to programs and policies involving customer participation.”
Where “customer participation” could mean any number of things. Including paying people fiat money to consume that (problematic) electric power, like they did in Germany.
It would be prudent if bitcoin miners were set up so that RES could earn digital gold from their surplus electricity, as they’ll always have surplus.
For the U.S., this is better than printing more debt (now over $37 trillion) to incentivize energy consumption. This isn’t even worth calling a demand response.
A Brief History of Money and Energy
Humans have come a long way with energy and with money. Thousands of years ago, we used cowrie shells as money and traded for energy with our own hard muscle labor.
While cowrie shells worked for 4,000 years, they could not have managed to support 21st-century commerce. Neither could muscles have effectively shipped oil, coal and electricity from one place to another.
With money, we had a quantum leap to gold, somewhat backslid to fiat debt money … and then jumped forward to Bitcoin.
We also upgraded the labor power of human muscles to machine power, pioneered during the industrial revolution in Britain — a country now facing an energy crisis that would be helped by bitcoin mining as I’ve analyzed.
According to Reuters, inflation and the costs of unrealistic net zero policies are to blame (two of the four challenges I mentioned at the beginning).
Machine power was soon upgraded to a global, quasi-decentralized energy mix. This transports energy commodities from one place to another, and sometimes across continents.
The problem with this energy mix is that it is not fully decentralized and many interventions today — from carbon credits to subsidized batteries — are proposed as talking points and adopted for personal leverage, not grounded research.
Somethings we need to get past if we are to build a more robust electricity grid that works for everyone.
And finally, Li-ion batteries are good for smartphones and all manner of small-scale, individualized energy needs from electric toys to electric cars. They’re just not suited for big power needs, such as load balancing a planet’s electrical grid.
No civilization climbs the Kardashev scale using Li-ion batteries.
“…there is not a day going by where you wouldn’t read the thing, oh, they developed the glass battery, flow battery, straw battery, you know, breathing air battery in whatever, right, you know, just relax just relax and turn the page, brew a cup all right. This is not going fast”.
— Vaclav Smil, Energy Systems Expert [15]
(Disclaimer: I am neither an insider nor an expert and are providing this data as is without claim of factual correctness and are glad to receive input or corrections if anyone has more insight).
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