Cryptocurrency mining to hedge renewable energy investments: A decision-support tool

Cryptocurrency mining has been proposed to supplement conventional electricity exporting as a revenue stream with a view to improving the financial performance of renewable energy projects. To analyse this proposal, this paper presents the development of a model which is used as a decision-support t...

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Bibliographic Details
Main Authors: Vicente, Riccardo, Van Rooyen, Gert-Jan, Bam, Louzanne
Format: Conference Proceeding
Language:English
Subjects:
Analytical models
Bitcoin
blockchain technology
Blockchains
Cryptocurrency
cryptocurrency mining
decision-support tool
Electric potential
investment
renewable energy
Renewable energy sources
Switches
Technological innovation
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Summary:Cryptocurrency mining has been proposed to supplement conventional electricity exporting as a revenue stream with a view to improving the financial performance of renewable energy projects. To analyse this proposal, this paper presents the development of a model which is used as a decision-support tool to inform managerial decisions regarding renewable energy investments. This tool can be used to determine the feasibility of cryptocurrency mining as a hedge for a specific renewable energy project, as well as to inform various decisions that relate to the structuring of such a project. The model is implemented in both a spreadsheet-based environment and a simulation environment and is applied to a number of illustrative scenarios. The results indicate that using cryptocurrency mining to hedge renewable energy investments has potential. Furthermore, results improve for cooler climates and when a flexible approach is employed that entails switching between electricity exporting and cryptocurrency mining as revenue streams.
ISSN:2693-8855
DOI:10.1109/ICE/ITMC58018.2023.10332274