cQuant.io’s Energy Modeling Solution Enables Bitcoin Mining Expansion
Energy and Cryptocurrency mining are inextricably linked and sophisticated energy analytics are needed to help miners manage their growing energy portfolios.
DENVER, April 13, 2022 — A massive increase in bitcoin mining and associated high-performance computing has operators competing for available energy. This is increasing energy demand and upward pressure on energy prices. The profitability of a mining operation is fundamentally driven by their operational expenses of which energy is a primary line item. Bitcoin miners have the option of using off-grid or on-grid energy sourcing. When their business model includes on-grid energy, miners can be subject to the uncertainty and volatility of the wholesale market. cQuant.io (cQuant) is providing analytic tools to help miners optimize operations and maximize profits.
Larger and more sophisticated bitcoin miners acquire electricity directly from wholesale energy markets. This can provide important financial advantages compared to paying standard utility rates, but also exposes these data centers to the volatility inherent in wholesale energy prices. Wholesale energy prices can vary wildly in the near-term based on renewable generation, power plant outages, weather events, and other risk drivers. During these scarcity events, prices can reach 100x normal levels, exposing data center operators to enormous costs for running their machines.
Optimizing mining operations in these scarcity events by understanding both short and long-term energy costs is the best way to manage operational expenses and the value of bitcoin mines. Large operators will typically have more complicated energy portfolios, occasionally even owning the power generation assets. The ability to make quick ramping decisions with their mining operations provides the flexibility to reduce energy costs during energy peak price hours. When energy is cheap, they turn energy into currency and when energy is expensive, they can ramp down mining operations and possibly sell the excess energy to the grid resulting in higher profits. Understanding the trade-offs and intentionally managing these options can dramatically increase profit for a mining operation and its investment value.
“The good news for bitcoin miners is that advanced analytics traditionally used by large energy companies are also available to them” said David Leevan, CEO of cQuant. “We believe that bitcoin miners should be as data driven about their energy portfolio as they are about their hash cost. From data center location to asset valuation, mining optimization to cash-flow forecasts, cQuant provides the analytics bitcoin miners are looking for.”
cQuant.io is an industry leader in analytic solutions for energy and commodity companies. Specializing in Total Portfolio Analysis, cQuant’s cloud-native platform enables physical asset, financial contract, market simulation and risk management analytics in one place. cQuant is the leader in analytics for renewable, storage and other clean energy technologies. cQuant’s customers have greater insight into their financial forecasts and the drivers of value and risk in their business. For more information or to schedule a demo, visit https://cquant.io/.