Sustainable Energy, Computing and Cryptocurrency: Forward in Energy Forum

all right i want to welcome everyone for joining us virtually to the uh uh february version of our forward and energy forum um we appreciate you uh joining us virtually in the madison area and everywhere around the world uh for those in the masonry i hope you're all staying safe um so the for those of you it's your first time it's my daughter uh nora who's uh home with me today uh as school is off so welcome everyone thanks for joining us norah can again uh so my name is scott williams i'm the research and education coordinator at the wisconsin energy institute um and if you're not familiar with the wisconsin energy institute our mission is to provide leadership on campus on the uw madison campus for multi-disciplinary research education and outreach efforts that accelerate the world's transition to clean energy systems and solutions the purpose of our forward and energy form is to cultivate public understanding of energy issues we do this on a monthly basis throughout the fall and the spring semesters and our mission is to bring together experts both on and off campus to discuss the many dimensions of our global transition to cleaner energy systems um and so with today's discussion and many others uh we try to encourage cross-disciplinary dialogue uh to explore the important technical social political and economic dimensions of a wide variety of clean technology innovations and issues um and in relation to today's forum uh cryptocurrency has gathered a lot of media attention lately uh even a few super bowl commercials that you've seen but what is less well understood is the the total energy and climate impacts and other sort of uh negative externalities of this digital asset uh you might have seen headlines uh such as bitcoin uses more electricity than certain countries however the method by which various cryptocurrencies are mined uh as well as where those mining operations are located uh can make a big difference in the resulting energy and climate impacts so today's panel will help us get a better understanding of this of these energy and climate impacts uh as well as the promises and concerns of cryptocurrency and other blockchain technologies a few announcements before we begin today's forum i want to highlight uh next month's forum which will take place on march 28th it'll be a monday and to celebrate women's history month we're launching a new podcast series at the wisconsin energy institute all about women in energy sciences so for this forum next month our student interns michelle chung and mary reicher will preview a new series and speak with our panel of scientists about their experiences and advice for women in stem second i'd like to acknowledge that the land that the wisconsin energy institute occupies as well as all of uw madison is the ancestral home of the ho-chunk people who have called this land the joke since time immemorial the ho chunk nation and 11 other first nations residing in the boundaries of present-day wisconsin remain vibrant and strong we recognize and respect the inherent sovereignty of the 12 first nations that reside in the boundaries of the state of wisconsin and also want to acknowledge that tribal nations are doing some of the most important and leading work in transitioning towards clean and just energy systems finally a few logistical notes you may see that we have live captioning turned on you can toggle this feature using the live transcript button and we ask you to submit your questions in the q a box um we'll uh we have the option to upvote uh so you can see other people's uh questions and you can upload if you would like to see that particular question answered by a panelist you can also as many of you are doing introduce yourselves in the chat and where you're tuning in from so thanks for doing that as well and now uh without further ado i'll turn it over to our moderator for today uh who is kieran furlong kieran is a senior fellow with cows at uw-madison and a venture partner with rabo ventures he has extensive experience in the fields of renewable energy chemicals agriculture innovation and venture capital welcome kieran great thanks very much scott and welcome everyone especially a huge welcome to our panelists uh who we're we're going coast to coast here from new york to los angeles so uh for uh so this is a really fascinating subject for me uh one that i didn't know a whole lot about and still don't but i'm probably in the same boat as many of our audience here as well we've all heard some mutterings recently about energy consumption and crypto but what can we make of it you know how can we put all those facts and figures together uh what voices are being heard and what voices are not being heard in that so that's why the wisconsin energy student has assembled this great panel of speakers so we can all become a little more educated on the topic and then that might be a good starting point but it's also there's a broader conversation to be had here around the interplay of energy and computing and also you know where these technologies are taking us you know and are we trending net positive net uh um what good are we doing for society with them so we've got four panelists today who i'll briefly introduce um i'm going to allow them to introduce themselves in more detail so we'll go through each of the four panelists then with a short five minute or so overview from themselves and then we're going to get into the discussion and i really do want this to be a discussion so for all of you audience members out there you know there's a q a function start uh piling your questions in there better to have them in the q a than the chat i think to be able to uh for the moderators here and hosts to follow um but uh the less talking i have to do the better i think when it gets into the discussion um so first of all i'm going to introduce kyle mcdonald and kyle if you want to turn on your camera so we can all see you there so kyle is an artist working with code and exploring the possibilities of new technologies and provoking some thought into their consequences as well he has shown his work around the world and notably for this discussion has recently published a study on the emissions associated with ethereum currently the second largest cryptocurrency by value and next we have yvonne taylor joining us so yvonne's a teacher speech language therapist and a community activist with seneca lake garden in the beautiful finger lakes region in new york and she has campaigned on numerous energy related issues affecting her community and is in the vanguard of bringing environmental issues with cryptocurrency to the public's attention next i'd like to introduce tad piper from compute north so tad is the chief financial officer with compute north he having worked as a trader and banker earlier in his career he spent over a decade with early stage companies in software and technology he's now with compute north a digital infrastructure company providing computing and blockchain services about which i'm sure we'll hear more and then finally i'd like to introduce dr destiny knock dr knox a professor in civil and environmental engineering and also the department of engineering and public policy at carnegie mellon university she's also the director of data analytics with devio and which is a mission-driven blockchain company pursuing environmental and social goods dr knock also researches issues of equity in energy and explores the trade-offs we make as we transition to more sustainable energy future so those are my four panelists i think to keep it easy for us all will go in the same order for each of your five-minute opening remarks so kyle if you would like to take the lead looking forward to hear what what you have to say great thanks for having us my name is kyle mcdonald my pronouns are he or they i'm an artist based in los angeles and i came to the arts through music and code originally i spent a lot of time working with new technologies like machine learning and computer vision and for the last year i've been researching the ecological impact of the ethereum blockchain i was already studying the massive energy use behind machine learning algorithms so when i heard that similar hardware was being used for running the ethereum network i wanted to understand how it compared um i got interested because in early 2021 this discussion kind of blew up on twitter as we started to see in the digital arts a reproduction for the first time of the contemporary art market um something that had never been done before really and around that time another artist named memo acton created an nft carbon footprint calculator but instead of kind of guiding discussion the tool was mostly used to shame other artists for their involvement um so a quick introduction if you haven't been following this topic already i want to explain what's going on with ethereum it's a cryptocurrency just like bitcoin bitcoin launched in 2009 ethereum launched in 2015. both of them use a system called proof of work to keep the network in sync across lots of distributed computers proof of work means that lists of new transactions are added to the database which is also called a blockchain only when a computer guesses a large random number and uh the first computer in the network to guess that large number correctly gets a monetary reward which incentivizes people to run these computers and this process is called mining mining is sometimes described as solving a complex mathematical puzzle but that makes it sound more honorable than it actually is it's really just about guessing random numbers as fast as possible um so think about the mining process as converting electricity into currency and at this very moment there's probably around 10 million gpus 10 million computers all over the world running at full speed converting electricity into ether as fast as possible one important difference from bitcoin is that ethereum has the ability to run short scripts or computer programs called contracts and these contracts allow people to create abstractions and rules for how the currency works and they allow artists to sell certificates of ownership so that's where the non-fungible tokens or nfts come from when a few artists started making huge sales in 2021 they're relying on this really energy-hungry system and some of the same artists who had previously been concerned about the ecological cost of flying from festival to festival in hopes of building an art career now they're concerned about participating in this new system uh potentially polluting system but the exact kind of scale of that damage was contentious so i tried to quantify the harm a little bit more and i wrote about what i learned i was hoping to show that you know even though this seal feels impenetrable sometimes with enough kind of care we can quantify and disentangle it even as for me as an amateur in this field and what i learned is that there's two really different problems involved there's the technical question of total energy use and emissions and then there's this ethical question of who is responsible um but i want to give a quick intro to the energy use and emissions i had to characterize the ethereum network as a whole how many computers are there are they using older and slower hardware or newer and faster hardware how efficient are their power supplies are they in data centers that use lots of electricity for cooling and lighting by each of these researching each of these questions i was able to estimate the total energy use of the ethereum network and i found that right now ethereum uses around three gigawatts of power or 26 terawatt hours per year but no one really knows is this a lot or a little we know about like 60 watt light bulbs and 1000 watt microwaves but gigawatts and terawatt hours are kind of unfamiliar units which means we have to make some unusual comparisons like the countries so ecuador uses 26 terawatt hours per year as well but this isn't really a great comparison because ecuador is not a computer it's a country of nearly 18 million people well ethereum has less than one million active wallets um we could say okay this is around 0.1 of global electricity use and when we look at all of the proof-of-work cryptocurrencies including bitcoin totals probably closer to one percent of global electricity use we could also compare to facebook which at about seven terawatt hours a year that's about a third of ethereum or google which runs a large portion of the internet via google cloud they use 15 terawatt hours a year uh still less than a theorem but every second google's answering 50 000 searches and playing over 50 000 youtube videos and ethereum only processes about 15 transactions per second so after looking into this energy i got deeper into the emissions side and i learned that every region has a different mix of energy sources there's geothermal in iceland hydro in south china kentucky and xinjiang have more fossil fuels and energy mix can be represented as this emissions factor number which tells us for every kilowatt hour of electricity how many grams of carbon dioxide are released in the atmosphere so for renewables this number's low for coal it can be as high as a thousand grams of co2 per kilowatt hour and i wanted to make sure this research could be kind of audited by everybody so i sort of pulled up all these numbers um kind of bit by bit for every region and year in an auditable way and then multiplied this kind of whole network factor based on uh sort of locations of where the mining is happening by the energy usage to get around 20 kilotons of co2 per day which is annualized to around seven megatons of co2 per year and so typical coal power plant produces around three megatons of co2 per year so ethereum's something like two to three coal power plants and that could be compared to maybe four million people in india or 500 000 people in the u.s where our

emissions are extraordinarily high and this is also comparable to all the private jets that fly uh around the world except there are more people using private jets than ethereum so that's the estimate and then just quickly to wrap up who's responsible here this idea of like a personal carbon footprint this was invented by an oil company it was invented for an oil company for bt in the year 2005 by the advertising firm okelvi and this concept was designed to deflect responsibility away from bt as a company and on to individuals so i think when we look at these high emission systems it of course it's important to ask you know what can we do personally but i think we can't let that distract us from keeping pressure on the organizations that profit the most and in the case of ethereum i think it's the marketplaces and the mining companies i've been focused on the marketplaces so art on ethereum goes through openc and wearable and foundation they take up to a 15 cut and only wearable has considered moving away from proof of work a little bit they've incorporated another blockchain called tasos which uh is not based on proof of work um the other organizations other marketplaces have not so uh i this may all be irrelevant in a few months ethereum's scheduled to move away from proof of work completely around june this transition has been six months away for nearly six years but even if that transition happens i think we have to ask ourselves you know and tech move fasts and break things uh who picks up the pieces right now this strategy is like uh when the industry just breaks something they move on and then the rest of us get left behind with the mess we're left with the carbon in the atmosphere warming planet rising seas mountains of gpus and it's not really sustainable so i think we need to reimagine how text built and how we hold it accountable and i'm happy to be in part of this discussion where we can do that thanks great thanks very much kyle yeah that's an interesting comparison i'm a chemical engineer and there's another industry got to start in the 19th century but yeah broke a lot of things and there was lots of externalities at the start or other people suffering before it was forced to clean up its act so and that's on a decades time scale hours and we seem to be on weeks um so uh yeah very pertinent points and also i do i think the quote for the day might be there are more people using private jets than ethereum there you go how elitist can that be anyway thank you very much for that moving on to yvonne yvonne taylor if you want to give your opening remarks yvonne thank you yes thank you pleasure to be with you this evening uh i am not an expert in this field i am a speech and language therapist that works with troubled adolescents by trade and an all-volunteer uh environmental activist for an organization called seneca lake guardian in the heart of the finger lakes region of central new york i live again in the finger lakes uh where we're experiencing many real-life consequences of bitcoin mining after being banned in china outside speculators are flocking to new york because power is relatively cheap here about a decade ago the bankrupt owner of a coal-fired power plant in dresden new york sold its uncompetitive facility for scrap and surrendered its operating permits for the next seven years that plant sat idle and on the western shore of seneca lake and therefore produced zero emissions but in 2014 atlas holdings bought the greenwich power plant and converted it to burn natural gas rather than coal before starting it again in 2017. over the next two years the plant's focus gradually shifted from providing intermittent power to the grid and operating at only about six percent capacity to installing about 7 900 bitcoin machines and running 24 hours a day this increase in operations subsequently increased its air emissions tenfold and today greenwich is is primarily a private bitcoin mining operation with over 17 000 machines and a goal of installing over thirty two thousand machines by year's end these energy-hungry computers draw power from the plant's 106 megawatt generator for private profit at full capacity this single facility will emit over one million tons of co2 equivalents into the atmosphere uh which is the equivalent to that of about a hundred thousand homes greenwich power plant is also permitted to dump 134 million gallons of water into our seneca lake at up to 108 degrees fahrenheit this is extremely harmful to the fish and health of the lake potentially contributing to toxic algal blooms a hundred thousand people depend on that water for their drinking water resource the facility has yet to install screens that would prevent its intake pipe from impinging and entraining aquatic life acting as a giant fish blender for millions of fish each year again this is happening in the heart of the finger lakes wine country where our driving economic engine is agriculture and tourism and our livelihoods depend on clean air and water to support the 60 000 jobs and 3 billion annual revenue influx into new york state's economy greenwich threatens that clean air water our climate our crops and our jobs further this industry's air pollution includes the same type of particulate matter that the epa just found responsible for the preventable deaths of 143 000 elderly people and greenwich is not an outlier renowned environmental law firm earth justice projected that there are 30 upstate retired or retiring fuel fossil fuel power plants and over a dozen others across new york in down state that could follow greenwich's example gaining new life by repurposing as bitcoin operations so while greenwich awaits a decision from the dec department of environmental conservation on whether to renew its title v air permit other facilities anxiously watch and wait to follow the greenwich model greenwich is a new york test case for how these other plants will fall and the crypto bros as they call themselves consider greenwich their alamo in a wild west of new york where we currently host 20 of all the bitcoin mining in the u.s and there are no regulations on the industry we're connecting with communities across the united states who are also being negatively impacted by this industry where facilities often sneak in under the radar as data or science centers and depending on the facility increase everyday persons electrical costs siphon much needed renewable energy away from the grid for private use make it harder and more costly for the public to access renewable energy resources derail state and national climate goals or emit harmful pollutants into the atmosphere which jeopardize residents health these facilities are not job creators as the energy-hungry machines are fully automated yet they jeopardize sustainable jobs that rely on a clean environment often these facilities are in environmental justice communities as our friends in adel georgia can attest to or their greenhouse gas emissions have a disproportionately negative impact on communities of color the energy amount used to generate cryptocurrency has been equated with that used by different nations sweden being one interestingly swedish leaders have asked the european union to ban such crypto mining saying that the social benefit of crypto assets is questionable crypto assets also have a significant negative impact on the climate as mining leads to both large emissions of greenhouse gases and threatens the climate transition that needs to happen urgently as mentioned these same rationale spurred china to wisely banned crypto mining last year so this is a statewide national and even international problem with grave implications and again this is i want to i want to point out this is not to say that i am anti-technology or anti-crypto and i believe that there are many beneficial uses for blockchain technology but everything we do moving forward must be couched in the context of climate and we can and we must promote models of cryptocurrency that are less energy intensive thank you excellent thank you very much yvonne and i think you give a very unique perspective for your area but it's also transferable to many other areas here in wisconsin we have at least three coal-fired power plants which are slated for closure and uh one could imagine that new lease of life can be given to some of these assets it's if there's economic alternatives to the cost of shutting things down so um i do think this is relevant for much uh broader scenario than just your specific one and up in the great lake or the finger lakes region great well thank you very much next i will call on tad uh from compute nort to to weigh in and uh looking forward to hearing your opening remarks yeah i appreciate it karen thanks for uh for having me here today um you know just by way of of introduction overall i'll start a little bit with um where compute north fits in all this we're an infrastructure provider what we call tier zero data center development i'm going to go back just a little bit to how our company was formed and how our founders came together because i think it's informative of the way that we think about both where we fit in the overall data center development crypto world as well as where we fit in the in the power sector overall um our two founders uh one came from from the data center world with 25 years of experience in the data center world and identified that data centers were increasingly inefficient uh in that they used a lot of power to cool things that were unnecessary and so there was a lot of focus on how can you both reduce the cost of building data centers but importantly how can you make them run more efficiently by actually having uh computing infrastructure that was suited to an air-cooled environment uh it is a fact that crypto is an early adopter within that sector so i'll address that as well but then secondarily our other co-founder is 25 years developing really with the last 20 spent developing renewable energy projects mostly in the area of solar and identified the fact that the increase in uh renewable energy was creating massive disruption uh and massive dislocation in the power grid overall and as the two of these two founders came together i was lucky enough to join them two years ago but as they initially came together it was to essentially bridge the gap between developing more inefficient uh developing more efficient shall i say data centers overall that were cost in use less overhead power relative to the amount of computing or what is oftentimes referred to as pue power use efficiency um if you will uh and also uh partnering with the power grid to essentially provide uh an intermittent use of power similar to way a battery works um and and today that's very much where we sit is at the intersection of intermittent power supply meaning uh intermittent power demand um and and providing more tools to stabilize the grid as we move forward as i like to say as long as everybody isn't willing to go camping and only have their cell phone charged when it happens to be sunny out and they can and they can charge it when they when they walk into their house and turn on the lights they expect it to come on uh there is a need with the increase in renewable power to likewise create more and more tools to uh to manage and from day to day operate that great grid successfully uh let me provide a couple of other statistics um that i think will help frame our discussion overall i've heard some of the statistics that kyle introduced the number uh as did digivon as well in terms of of coal power plants across the u.s there are 80 coal power plants scheduled for decommissioning um over the next uh over the next three decades um you know ideally some of that will be accelerated um overall but that that represents 98.3 gigawatts of power um which is you know as it relates to say power use in the state of texas that's over you know sort of two two times your average day of total usage across the whole state um the overall bitcoin network uh uses about point one four percent uh of global power um today uh i think uh kyle mentioned 26 uh 26 uh terawatt hours of of energy is used by the ethereum network approximately 220 terawatt uh hours of powers used by the bitcoin network overall um talk just a little bit also about the evolution of what's happening on the grid and where kind of we sit in our industry uh overall there's two massive trends occurring in two different areas one is in the area of power and the other is in the area of computing both are moving from a centralized world to a decentralized world so at the extreme in power you're moving from large power plants with distribution from those central sources of power generation to distributed power so with the extreme think uh rooftop solar on people's houses um moving away from you know 1.2 gigawatt power plants be

them uh be them either uh coal traditionally or or gas-fired power plants moving towards distributed power so that is creating a lot of disruptive uh effects on the grid overall and then in the areas of computing we're moving from centralized uh computing uh what i mean by that is where the redundancy and power backups and things like that are at the data center layer so you know uptime is next to godliness in the data center world think five nines of reliability you know it's all about uptime it's about you know uh streaming netflix and it's hard for me to say that with a straight face that that's a you know an absolute necessity in terms of of reliability but it is a fact um email servers things like that everything is about uptime and so data centers today are built um like fortresses they're built with redundant power sources um ups interrupted interrupted power supply they have a very high overhead to maintain that environment however what's happening with distributors computing is we're moving from the redundancy at the hardware layer ie data centers to the redundancy at the nodal layer meeting at the network so if part of the network goes down in location b those workloads are picked up uh in a different location with obviously blockchain and global blockchain being the best global example of that no other no other uh computing function can have 50 percent of the network come offline in one and have it not miss a b um and that moving from redundancy at the hardware layer to redundancy of the network layer is allowing for uh the computing and data centers to match the change in the in the power grid and this this is a symbiotic relationship that provides a level of pragmatism about how we move and actually increase the amount of renewable power on the grid while also providing solutions that allow us to balance that so as i said we're not all camping hoping it's sunny every day where there's a steady wind every day to keep our lights on um so i'm looking forward to the conversation overall looking forward to telling talk about this transition and now we're really in the midst of a very exciting transition in these two kind of colliding areas of power and computing great thanks very much chad i think i've got my sound bite there uptime is next to godliness but uh yeah i think we're going to get into some of this uh you know movement away from centralized movement away from complete reliability at a given data center and instead this nodal redundancy i think you called it which uh very good okay so the uh last but not least i'd like to call on dr destiny knock to give her opening remarks so destiny over to you please um thank you so much for having me so um as a reminder i am approaching this from an academic lens of what can we possibly do with blockchain technology that we might not be doing currently as we are managing our computing as well as processing so much data and so my work has really been focused on energy system planning energy system analysis how do we increase the sustainability of our energy systems from a in a broad sense and one of the things that you know a lot of people are discussing right now is reducing our greenhouse gas emissions right so you know we hear some earlier speakers discuss you know the fact that um some of these blockchain technologies are very you know emissions intensive but there is like another kind of side of this point where we could actually use blockchain technologies to verify carbon emission reductions and so as we are moving towards a net zero energy future there's a lot of data coming in and there's a huge risk that people will be double counting that data and so i think um often times when people kind of hear about blockchain they just immediately jump to the cryptocurrencies they jump to like bitcoin but really blockchain technology is a data ledger and it can you know include and introduce some more verifiability as well as tracking of this data because one of the big risks with carbon emission reductions is who gets the carbon credit who gets to claim that they have reduced the carbon and as we are seeing with for example electric vehicle technologies or come online it's like does you know the car manufacturers get that credit the charging stations the homeowners you know the cities that incentivize the building of the charging stations and if we are not like you know accounting for all this data and verifying how it's moving through our system and who's getting credits then we actually are at risk of double counting a lot of those credits and then that would not be effective in our carbon emission reductions or even air pollution emission reductions and so um one of the things that i've been doing recently is i have you know kind of started uh partnering and consulting for a startup company called devio and esg where they actually have created another blockchain type of technology which uses a sharding method and an independent consultant has recently come and actually found that they consume 3.5 billion times less energy than bitcoin per transaction of their data processing so i think that you know we've talked a little bit about you know the current issues but i think that there are always innovations to be made in the way that we process uh this computing power as well as process our data you know i feel like i normally end up taking a more optimistic approach than a lot of other academics but you know if you think you know like 60 years ago right computing was like the size of a desk right one computer with the side of the desk now we have so much computing power in our cell phones and it just can handle so much more right process so much more than you know a huge computer could do back in the day and so i think that one of the other you know opportunities is to really fuel innovation in you know data processing as well as um blockchain technology management and then in the kind of uh broader sense about like you know how can we maybe use this to do social good again it's like uh when we reduce our emissions from the blockchain technology as well as then start using that blockchain technology to track and process data there's a lot of other social good opportunities out there for example healthcare data right there's a lot of privacy concerns there's a lot of worry about hacking of that data and so then when you have this blockchain technology where it's storing the data processing at seven different locations for example and then it can actually see okay like this one place got intercepted this is where we have our privacy leak but now we can actually verify that you know that part of the data is you know what was tampered with and now we have this other way of verifying it similar to the carbon emission reductions so those are some of like the kind of broad opportunities that i've been seeing mostly through my work with devio and dev esg um in the carbon and social good space as well as um other thoughts on how we might want to think about innovating to kind of reduce our co2 emissions from these technologies but also using them to track actual reductions of co2 emissions as we're moving forward excellent thank you very much destiny i mean that's a phenomenal statistic 3.5 billion times less energy per transaction did i hear you correct oh you're on mute i said yes i'll put it in the chat excellent no that's great but i think that might be actually a great uh place to leap into the conversation from because you made the statement there are always innovations to be made and i think and we just have to wonder how can we direct those innovations to be adopted or incent those innovations to be discovered developed and adopted i mean i'll start with one example because i think it'll come back into some of the stuff you talked about tad so i didn't grow up in this country i'm an immigrant and one of the things that fascinates all immigrants who come to america is the size of the fridges okay the americans may not realize this but these humongous you know fridges are quite astounding for folks who come from elsewhere and i'm sure many of you have a family member or a household of her friends where you go and there's an even bigger fridge sitting in the garage keeping the drinks cool right so yes we've incented people maybe to move to a more efficient fridge and that's in the kitchen but the old energy hog is still chugging away uh quite contentedly guzzling down electricity in the garage and i'm using that as a kind of you know very simplistic metaphor but if we think about that in terms of power generation as well like how do we avoid that where we're you know continuing to keep maybe forms of energy that we would like to um disincent because of some of these negative externalities we price those things in to move to maybe a more sustainable energy future um but how do we how do we actually adopt these innovations and maybe that's for you destiny to answer tad way in it sounds like that might be some of the stuff that compute north is offering your customers as well but uh yeah how do we actually get these innovations to be adopted so destiny maybe if you want to start with that i think that one of the biggest challenges for adopting different innovations is you know so building on your fridge example is the capacity right so can it actually handle everything that i want to have um and get me to where i want to be so for example like with the fridges okay yes you're you know reducing your energy consumption but when a person retains their old fridge it sounds to me like you just gave a wealthy family a better fridge and they didn't actually care about reducing their energy consumption they just wanted to you know be able to store more food at less of the cost right or they wanted to get the rebate for example whereas you know what really should be happening with energy efficient appliances is going to the um customers that maybe didn't have a working fridge or their fridge is like on the fritz and then we kind of incentivized them to first adopt this new technology and you probably won't get a redundancy because maybe their fridge was broke right and so i didn't have one yeah right yeah or they didn't have one um and so when we were thinking about like some of these blockchain technologies especially when we are trying to move forward one place to go would be to not just incentivize people that currently use the technologies to switch but all the people that are going to try to get onto the network to start processing their data using these technologies is like your easiest way to kind of intercept right and then now you have started to create a critical mass and then i think that it will also like lead to one more testing of it more developing of it but then you know they'll be able to incentivize other people to get on to these uh to get on to like a more efficient method of processing especially when you need to process a lot more data uh coming through your system and so um like for example we have been at devio we've been talking to a couple of car companies right and so then having a way that we can connect them with all their suppliers to track all the data has you know is something that can create community right it can create uh streamlining the process and then you've incentivized people to all get on it it's kind of like how you know there's all these different search engines but a lot of times now you just google it right and that's become a tagline term and so then i think that it's because it was efficient it can handle a lot of things it gives you you know the an algorithm that is closer to what you actually wanted and so i think a part of it is you know getting the new customers on but another part is actually the speed and the computing capabilities great thank you and i do notice we've got some questions coming in from the audience and i'll i'll try and pull those into the conversation here shortly as well but tad any comments on that or tyler yvonne yeah i i think going back to what you know the the courier question i think the question is is we have to come back to what is the goal is the goal using less power or is the goal producing less carbon and there's a there's a very distinct difference between us i i appreciate that one might lead to the other but i don't think it's as simple as that and i think we need to be we need to be looking at what it takes to run a grid at a national or multi-state level on a given day uh say in the state of texas you might you know on a standard day use 45 gigawatts and on a cold day or a very hot day you might use north of 70 gigawatts the grid has to be developed to deliver power to 70 gigawatts otherwise we go back to my camping analogy right and and so i think i think it's very important to create a system whereby there is enough incentive to be able to deliver power in those peak load moments and create an ability to reduce the difference between uh if you will the standard day and the peak day so that the grid can be economically moved towards more renewable sources so taking in the example that you talked about your refrigerator refrigerator may not be the best example in part because you want it to be cold when you go out to get your cold beverage or your your frozen pizza or whatever it is that you keep in your refrigerator but your electric car that's parked in your garage overnight when the wind is blowing 30 miles an hour at night when everybody's asleep and turning their lights off scheduling those types of power usage in the middle of the night is an ideal transition for the type that we need in the next the grid of the future right and it's and it's essentially figuring out how to balance production and intermittent production and distributed production with intermittent and distributed load or usage and so the the grid of the future is actually trying to balance those two things out and so that's why batteries come into effect right it's so that you know you have power when you want it not necessarily just when it happens to be available and i think computing infrastructure car charging uh many other things are going to evolve to use power when it is available um and and the you know harsh reality of renewables is that it does happen to be windier at night and more wind production happens to happen in the middle of the night and there are many times in texas that has a very large power uh grid and a lot of wind power where the cost of energy in the middle of the night is in fact negative because they don't have anywhere to put it so they actually pay to evacuate the power so i think it's very important that that power is not completely looked at as a zero-sum game but actually a great big game of you know three-dimensional chess figuring out how to balance the grid to allow us to more aggressively move towards a higher percentage of renewables and that you know uses a lot of creativity in when people run certain functions use certain power at certain hours and things like that so i think there's a lot of wood to chop as we go through this evolution but i just wanted to kind of reframe that it's not necessarily a zero-sum game it's about balancing intermittent supply with intermittent demand right no look todd absolutely and i think um i for one i'll speak for myself but i'm sure there's many in the audience as well the goal here is not necessarily to reduce overall energy consumption or use right i think we do all of a stake in reducing overall carbon emissions and carbon intensity um but on the energy front there's large parts of the world where they still need more energy and i absolutely don't want to be one of these uh wealthy citizens of the you know rich world who wants to pull the ladder up after me i'm like well we're okay you know um forget the rest of you type thing so there is absolutely a goal though in some of our in the you know developed economies to look at reducing energy intensity of our economy and economic growth while recognizing in some developing economies there's just an absolute need for more energy to get going as well now i think on your point around you know this balancing with the balancing of the grid balance is a great word for this here but i think this kyle maybe i'll call you in here because you had talked about hey at 24 cents a kilowatt hour you'll still chug away and you can run computers to uh to to to mine for bitcoin or something else so this is this gets to the challenge of it you know i came from the biofuels world as well and there was always the argument of hey let's plant this energy crop on marginal land and i'm just like listen do you know any farmers if they can make money planting it on marginal land they'll make even more planting it on good land right so you know saying ring fencing an asset and saying we're only going to use it at this time or for this purpose can be challenging but kyle maybe you want to weigh in on this sure yeah i'll say something quick um i i was thinking tad while you're just sharing your thoughts about balancing which i think are spot on we've got to figure out how to balance and make sure that we have a grid that works at peak loads and you know low demand as well um but uh it just something feels a little bit off to me here you know if we can if we can have transactions that are billionth the energy usage like if we don't need high massive energy consumption to have the benefits of these blockchain technologies and we also have electric cars that are like ready to be charged if these are both kind of doing the same thing why are we mining bitcoins instead of charging our cars they seem like they both fulfill a similar role in the uh in the energy grid in terms of being kind of these controllable load resources but one of them kind of works for a lot more people right now and maybe we can you know get other benefits out of it too in the future i think there's you know a billion cars in the world right now and only a few million of them are electric there's a lot of space to grow there and i'm not sure that i want to see uh proof of work grow at that same scale all right thanks hey i'm just uh there's a question here from joseph campbell in the q a asking about turning things on and off and i think this fits into the intermittency tad that you've already mentioned on the decentralized power supply or renewables power supply but um can they be turned on and off uh the bitcoin mining or to use your analogy you know i'm glad you demystified bitcoin mining for us kyle because it sounds like it's more a bunch of robots looking for a needle in a haystack or many needles and many haystacks than solving complex algorithms but can you turn them on and off to match uh power surges such as the one that tad was alluding to at windy knights in texas well you don't need to turn them off on the windy nights in texas when you need to turn them off and it was when it gets cold and the answer is yes um absolutely and i think uh you know at the root of what compute north is doing is creating what are called tier zero data centers which are based data centers are measured on tier four being the highest level of redundancy all the way down to to tier one in the traditional space tier zero essentially introduces the premise that rather than uptime being the goal cost-effective operations and efficient use of energy use is back the goal and so um and look you know i'm the cfo of a company so economics matters to me um if you don't buy power one percent of the year over the last 15 years you save 15 percent by just avoiding buying power in that one percent in those peak moments um the the other side of that is that we can shut off in those moments to avoid buying power when it's more expensive that in turn helps balance the grid it creates the economic incentives to do so but to answer your questions straight up the answer is absolutely you can shut it off uh and that is exactly what um what we do uh and which means that a large tier zero data center like we developed largely performs the same function as a battery does on the grid it uses power during times when it when the grid doesn't need it and it shuts off or does what we call the megawatt which is essentially the watt never produced it it reduces its usage which pushes that power that had been being used to the rest of the grid all right i see that uh both yvonne and kyle have your hands up maybe ivan you want to weigh in first and then kyle will come to you sure thank you um you know this this notion of of being a grid stabilizer uh stabilizing the grid i think is is this argument is rather disingenuous uh bitcoin miners aren't in business to be grid heroes they're in business to make a profit and so you know just using greenwich the greenwich facility in my area as an example um you know they were putting a significant amount of energy into the grid when the bitcoin value was low uh but as bitcoin increased in value um however their contribution to the grid became less and less um so it would be fiscally irresponsible for them or any other company that's trying to make a profit and and please its shareholders um to supply power to the grid uh when it's when when they when they would have to take a loss right so um you know in fact greenwich the greenwich facility right now has an application in uh to start drawing power from the grid uh because number one they may anticipate that the value of bitcoin will increase and so they want to be more profitable and number two they they may be hedging their bets um to potentially regardless of what our state asks them to do be able to keep running another thing that i just want to point out about using renewable energies for this industry um you know the u.s needs to transition away from fossil fuels and we're far from achieving that um and so i disagree with the argument that mining provides value to the grid because it uses excess renewable energy my understanding is that there are great advancements and exciting new technology for long-term energy storage that could help stabilize the grid for providing the much needed power renewable energy to the public we could we could use that excess renewable energy uh to upgrade the transmission lines so that they have the capacity to distribute that energy being generated and also adding energy storage so that that excess is stored for when the wind isn't blowing and the sun isn't shining uh but renewables are not a stable solution for crypto currency mining um and bitcoin miners that tap into the grid increases the demand and base load and increases ultimately our dependency on fossil fuels so i don't think any of these arguments hold much merit well let's um i mean i think there's there's there's a lot in there to unpack upon so i think first of all yeah we should make sure all of our audience which i think many of them are already probably aware globally our primary energy supply is still 80 fossil fuels right so that's something i think we we should all be aware of we can all agree on um in terms of energy storage and increased transmission yeah so i'm involved for example with fusion energy and one of my first questions and getting involved was well will we even need it right will we have a future where we've got a sufficiently large interconnected grid or grids where power is moved around from where it's being generated to where it's needed and then we do have some long-term storage to kind of you know smooth out the bumps if you like here and there and i think that's a long way off right it's a long way off before we're going to have cost-effective energy storage to do this um in that future though you'd be in a situation where you know um converting energy converting electricity essentially into a cryptocurrency would just be based on well hey i got to pay the same market price as anyone else for electricity um you know so i don't know if kyle you had your hand up next if you wanted to respond to some of yvonne's points there as well yes uh more to what tap was mentioning but kind of in the same vein as um uh you know yeah miners are not here to save us to make the electric grid work but they do act as a controllable load and i just don't think it's the one that we want and i think something else important that todd didn't say is you know that the places where this happens at significant scale like on the urcot grid in texas um you know the miners aren't just shutting down in advance of a big storm because they want to save everybody uh that has happened at a very small scale but what's happening is uh the erco grid pays the miners to stop mining so they are literally using their funding to make sure that the grid stays up by telling the miners to stop working so it's not like some free thing that we just you know get out of this nice benefit from these uh these miners trying to keep us happy right tad you want to come in yeah i i think all those comments are fair i would i would i would say that some of this is related to the incentives i think what kyle just touched on and i think importantly what yvonne was getting at um new york state does not offer particularly great incentives around shutting down so you are correct in stating that and kyle touched on it i think i think texas has been more proactive in providing means to incent incentivize people to shut off their operations and that could be cryptocurrency miners could be data centers could be anybody in any business providing an economic incentive to shut your operations off is an important market-based way to provide that good balancing in the state of new york there are less areas around that and that's because it's what's called a capacity market which essentially looks to pay for operations to provide that balance and has been less proactive and i think we're at the early stages of what's called demand response and i think the federal energy regulatory uh commission ferc has pushed forward with uh sort of more proactively pushing towards what's called ferc 222 which is a regulation that promotes more use of demand response i.e loads shutting off in order to help balance the grid or what is oftentimes referred to as the energy imbalance market to create those incentives to balance the grid so i think a lot of what um you know yvonne highlighted is absolutely accurate in the sense that there are people connecting to the grid and looking at ways to do that i do think that there's there's an evolution occurring um that needs to continue to occur to provide incentives to have people want to actually shut off operations to manage the grid and part of that is creating the active demand response market in order in order to do so batteries do it peaker plants do it spinning reserves do it um etc uh i i think there's a number of different ways in which the market needs to evolve and is slowly evolving great and actually so i think we should all recognize yeah the electrical power market is highly regulated it's far from being a free market um system right so uh that comes back to yvonne the kind of um social and political pressure groups like yours are able to put on our public representatives and public utility commissions and so on i think is critical get those voices out there and get them heard but maybe destiny this is where oh you've got your hand up i was going to call on you anyway with your engineer and public policy hat on uh because kermit uh in the audience here has a question around incentives as well so yeah how do we start looking at technologies that can do these transactions 3.5 billion times faster and have that become the norm um but you may have had another comment where you wanted to weigh in here you're so okay awesome so for like the kind of uh data i'm not data sorry demand shifting and uh demand response i do think that when we move towards a high renewable future we do need to think about like what's our goal right who do we actually want to be absorbing that intermittent renewables and like i will just kind of give an example from my research is like we know that low-income households are actually not using a lot of energy like when they would probably want to so for example in arizona there are low-income households that wait about eight degrees longer than high-income households to even just turn on their air conditioning unit and that's mostly likely due to financial strain so one thing that we actually could do is try to incentivize companies to use blockchain technologies to identify those households and actually send you know the extra energy there as opposed to getting them to turn off i think that you know if we just are saying okay you know people who are mining coins like just like turn on and off like we're missing a huge opportunity of like there are people out there that actually want to use that energy and so are once you use that excess renewables and so then we could actually like send energy there and use blockchain to identify like who needs it and when they need it and when's the best time to get it to them now for the incentives i do think that this is where kind of out of market things like you know carbon taxes carbon caps those things might actually play a role in incentivizing things because you know as my fellow panelists have mentioned people are doing this because it's profitable right and so one way to incentivize less kind of um less usage like during um like high emission times is you know if you had a separate blockchain company actually looking at when the emissions are the highest and then you can actually create a pricing mechanism for energy usage around you know different carbon emissions uh carbon emission times like for when different power plants are online and then you can actually use that to feed into attacks or or some other sort of mechanism that the electric electric companies could use um so there are i think like you know carbon taxes carbon caps i mean we are in a you know a revolution of the energy system where people are trying to reach these net zero uh greenhouse gas emission systems and so i think that uh a lot of the challenge is getting people

2022-03-03 22:27

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