Article · February 2022 doi: 10. 1016/j joule

Stranded Fossil Assets Revival

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Stranded Fossil Assets Revival
The use of marginal emission factors over average emission factors could have a more significant impact on the estimates of cryptocurrency emissions. Marginal emissions reflect the change in emissions as a result of a change to the electric load on a grid. Mining activities increase power demand, which activates additional electricity generation resources. For example, in New York State, stranded fossil assets (i.e. assets that can no longer generate an economic return) have been reactivated to power Bitcoin mining operations. Environmentalists have warned that 30 fossil-fueled power plants in New York State could be resurrected for mining operations.
Average emission factors do not properly capture this impact. As the majority of New York State’s power originates from low-carbon sources, applying average emission factors therefore underestimates the emissions related to Bitcoin mining in this example.

5 Another US. example can be found in Kentucky, which grants tax breaks to attract Bitcoin miners and thus saves coal companies and creates new jobs.
According to our calculations, this has led Kentucky to become the highest-emitting American state in the Bitcoin network (see Figure 3). In addition, Pennsylvania subsidizes mining company Stronghold Digital Mining to burn coal refuse. Stronghold Digital Mining has expansion plans and aims to attain a 5% share in the Bitcoin network through this electricity source
(Pennsylvania currently represents 0.04% of the global Bitcoin network. However, to account for cause-effect relationships in detailed electricity system modeling it would be required to know exact mining locations and load information, but this data is currently unavailable. The estimates in this commentary were made using average emission factors rather than marginal emission factors.
Figure 3 | Estimated carbon footprint of the Bitcoin network in the United States, as of August 2021. The emission factors used to calculate the carbon footprint are based on 2019 data due to the limited availability of more recent data. Data and sources can be found in Supplemental Data Sheet 1.

In the short term, reactivating or prolonging the lifetime of stranded fossil fuel plants or assets to serve the additional load required by crypto mining operations is likely to continue. Recent attempts to utilize flare gas in Russia and the United States are other examples of how Bitcoin mining may generate revenue for companies active in the fossil fuel industry. From an environmental perspective, however, flare gas utilization to generate electricity results in the same amount of carbon emissions as flaring. For instance, in the United States, the Environmental Protection Agency requires a minimum flare combustion efficiency of 98%. Therefore, flare gas utilization projects would only yield climate benefits if the electricity generated from them replaces electricity generated from higher carbon fuels such as coal or if they reduce waste gases from venting and leakage.

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