Unlocking the Economic Value of Surplus Renewable Energy

Authored by Rupesh Madlani , BwB CEO and Ede Borbely , BwB Vice President 

The Problem: Wasting Surplus Renewable Energy 

As nations around the world transition towards renewable energy sources, a new and perhaps surprising challenge is emerging: how to manage surplus production. In the Global South, countries often experience energy surpluses due to limited domestic demand or grid inefficiencies. These surpluses can be especially pronounced during peak renewable production periods, such as in the sunniest months for solar energy. Meanwhile, industrialised nations such as the UK are grappling with a different version of the surplus challenge. Here, grid constraints and the intermittent nature of renewable energy production often lead to renewable energy curtailment. 

The easy answer to the question of how to decrease renewable energy surpluses or curtailment risk is to say that countries should aim for an optimal green electricity mix based on their climatic and geographic conditions.  

In the right proportions, wind and solar, which are attractive due to their lowest levelised cost of energy, can reduce surplus issues since they generate power at different times, making it beneficial to install them simultaneously. Geothermal energy can be utilised if underground water temperatures make it economical, while hydroelectric power can be tapped if geographical features allow.  

 However, achieving an ideal balance can be challenging as governments often focus on one technology before moving to the next. Most green energy surpluses arise from overproduction by wind, solar, or hydro sources when there is less demand. In a technology-agnostic power system – where all green energy sources are equally encouraged – this issue is less pronounced, resulting in more efficient energy utilisation. 

The Cost of Inaction 

If a balanced renewable energy portfolio cannot be achieved, surplus renewable energy must be better managed. While storage methods such as batteries can be used, in the era of cryptocurrency, bitcoin mining offers an exciting potential option for using this energy. Failure to use surplus energy in innovative ways will continue to result in waste, lost revenue, and even costs (see below), to the detriment of sustainable economic development and decarbonisation efforts. 

• Global South: Export surplus energy at low price, resulting in minimal economic value and missed opportunities to fund development. 

• The UK: Paid over £1 billion in 2024 to wind farm operators to curtail generation, resulting in the loss of as much as 3.8 TWh in potential wind energy. 

The Opportunity: Monetising Surplus Energy Through Bitcoin Mining 

Bitcoin mining is energy intensive but highly flexible, allowing operations to scale based on energy availability. By integrating bitcoin mining into renewable energy strategies, nations can:  

• Generate revenue by converting surplus energy into cryptocurrency holdings. 

• Enhance grid efficiency and optimise grid investments by absorbing energy surpluses that would otherwise go unused. By locating data centres close to intermittent renewable generation sources – that are often far away from consumption hotspots such as cities or industrial facilities – less grid investment is needed to transmit power. Surpluses are absorbed by crypto facilities. 

• Support economic growth by creating new revenue streams for public and private sectors. 

Case Studies: Bhutan, the UK, and Ethiopia 

Bhutan – A Model for Hydropower Monetisation 

Bhutan leverages its abundant hydroelectric resources to mine bitcoin, transforming surplus energy into substantial national revenue. Since 2019, the nation’s investment arm, Druk Holding and Investments, has mined over 13,000 bitcoins. 

• Revenue: At a bitcoin price of US$110,000 (£80,900), Bhutan’s holdings are worth £1.05 billion. 

• Impact: This strategy capitalises on surplus hydropower, diversifying Bhutan’s economy while adhering to its environmental stewardship goals. 

The UK – Curtailment Costs and Untapped Potential 

The UK’s wind energy capacity often exceeds grid demand, leading to costly curtailment. Directing surplus wind energy into bitcoin mining could not only help reduce or avoid these costs but also generate revenue.  

• Surplus energy: 3.8 TWh of curtailed wind energy in 2024. 

• Revenue potential: Mining 1,368 bitcoin annually would generate £110.7 million at current prices. 

• Impact: Over a decade, this could generate £1.11 billion, significantly offsetting curtailment costs and contributing to renewable energy goals. 

Ethiopia – The Grand Ethiopian Renaissance Dam (GERD) 

GERD, Africa’s largest hydroelectric project, often produces surplus energy during certain seasons. Bitcoin mining could transform this surplus into a valuable economic resource. 

• Surplus energy: 5 TWh annually. 

• Revenue potential: Mining 1,800 Bitcoin annually, valued at £145.6 million. 

• Impact: Over a decade, Ethiopia could generate £1.46 billion. 

As these examples show, using surplus renewable energy for bitcoin mining could help nations reduce energy curtailment costs, diversify their economies, and maximise the value of their renewable resources. 

Creating an Enabling Environment 

To unlock the full potential of this solution, governments should focus on several key regulatory, infrastructural, economic, and risk management issues. 

Establish a clear and comprehensive policy framework 

• Develop transparent regulations for cryptocurrency mining, focusing on energy sourcing, taxation, and environmental standards. 

• Ensure mining operations rely exclusively on surplus renewable energy to align with sustainability goals. 

• Promote carbonlesscoin / greencoin – a type of bitcoin mined exclusively with surplus renewable energy – as a sustainable alternative that adds market value to ethical cryptocurrency. 

   Invest in supportive infrastructure  

• Support the development of data centres near renewable energy hubs to minimise transmission losses. 

• Leverage public-private partnerships to fund related infrastructure and ensure equitable benefits. 

• Implement certification systems to verify carbonlesscoin / greencoin, ensuring full transparency in its renewable energy sourcing. 

Create economic incentives 

• Provide tax breaks, fast-track permitting, land-use advantages, and other subsidies for mining operations that utilise surplus renewable energy to encourage private sector participation. 

• Introduce mechanisms to reinvest revenues into public services, infrastructure, and green initiatives. 

• Establish incentives (e.g., preferential trading rates, tax benefits) for ethical bitcoin mining that adheres to strict sustainability criteria, to further encourage the adoption of carbonlesscoin / greencoin. 

  Implement robust risk management 

• Require partial conversion of mining profits into stable assets and establish financial hedging strategies to protect against cryptocurrency price swings. 

• Regulate mining growth based on real-time energy surplus data to ensure it does not compete with essential electricity demand. 

• Implement strict ‘know your customer’ and anti-money laundering regulations and cybersecurity measures to prevent financial crime and protect mining operations from cyber threats. 

Build public trust and buy-in 

• Communicate the environmental benefits of using renewable energy for bitcoin mining to counter perceptions it being a carbon-intensive activity. 

• Ensure transparency in energy use to maintain public trust. 

• Highlight the ethical aspects of carbonlesscoin / greencoin, ensuring that mining operations contribute to sustainable development rather than energy waste.  

A Blueprint for Expanding the Benefits of Renewable Energy   

Surplus renewable energy, whether in the Global South or in more industrialised economies, represents a valuable untapped economic opportunity. Bhutan has demonstrated how surplus energy can be transformed into significant national revenue, providing a model for other nations. 

By adopting clear regulations, investing in infrastructure, managing risks, and prioritising sustainability, nations can turn surplus green energy into economic value, supporting a future where surplus is not a challenge but a catalyst for sustainable growth and decarbonisation.