Bitcoin Mining Shifts Toward Sustainable Sources as Hydro Power Gains Prominence

The environmental criticism of Bitcoin mining has been somewhat alleviated by recent developments. According to a report from the Cambridge Centre for Alternative Finance, sustainable sources now account for 52.4% of the electricity used by surveyed miners, with 42.6% coming from renewable energy and 9.8% from nuclear power.

This shift is largely due to the increasing importance of hydroelectric power, which now makes up 23.4% of the mining electricity mix, surpassing wind and solar power. Natural gas remains the single largest individual source at 38.2%, but coal's share has decreased to 8.9%. The report notes that while Bitcoin mining is cleaner than previously thought, it still requires a substantial amount of energy.

The geography of this shift is not random, with countries like Paraguay benefiting from its abundance of hydroelectric resources. Hashrate Index reported that Paraguay now accounts for around 4.3% of global Bitcoin hashrate, making it the fourth-largest mining jurisdiction after the United States, Russia, and China.

The economics of mining in Paraguay are also noteworthy, with industrial electricity prices ranging from $0.037 to $0.050 per kWh. This has driven out weaker operators and allowed larger companies like HIVE Digital to thrive. HIVE's acquisition of a 200 MW hydro-powered site in Paraguay is just one example of this trend.