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16 

 

 

 

Article 

Development a policy for the production of Bitcoins 

with renewable energy sources 
Mehdi Aliehyaei1, Ali Tofighi2, Marc A. Rosen3, Hamed Afshari4*, Solmaz Gheisari5, Amir Safari6 

1Department of Mechanical Engineering, Pardis Branch, Islamic Azad University, Pardis New City, Iran 
2Department of Electrical Engineering, Pardis Branch, Islamic Azad University, Pardis New City, Iran 
3Faculty of Engineering and Applied Science, University of Ontario Institute of Technology, 2000 Simcoe Street North, 
Oshawa, Ontario, L1G 0C5, Canada 
4Food Science & Engineering Department, Faculty of Civil & Earth Resources Engineering, Islamic Azad University Central 
Tehran Branch, Tehran, Iran 
5Department of Computer Engineering, Pardis Branch, Islamic Azad University, Pardis, Iran 
6Department of Science and Industry Systems, University of South-Eastern Norway (USN), Kongsberg, Norway 

A R T I C L E   I N F O 
 

Article history: 
Received 02 June 2023  
Received in revised form 
04 July 2023 
Accepted 16 July 2023 
 
Keywords: 
Bitcoin, Energy, Policy,  
Social cost of air pollution 
 
*Corresponding author 
Email address:  
afshari1@gmail.com  

 
DOI: 10.55670/fpll.fuen.3.2.2 

A B S T R A C T 
 

Bitcoin, the first decentralized digital currency introduced by an anonymous 
person or group since 2008, has attracted worldwide attention. A significant 
number of economists have introduced Bitcoin as a new phenomenon in the 
21st century that could reduce global inflation. Given the tens of thousands of 
digital currencies that have emerged since the advent of Bitcoin and its price 
growth trend over more than a decade, which are signs of the growth of this 
business. In addition to being money, Bitcoin has always been considered a tool 
for investing and storing value, which is why it is called digital gold. One of the 
most important problems in the production or extraction of Bitcoins is the high-
power consumption by miners. If the energy sources of electricity generation 
are supplied by non-renewable energy sources, in addition to emitting air 
pollutant gases, it will increase greenhouse gases and consequently contribute 
to climate change. In this research, based on the idea of the authors, which is 
that the economic support of Bitcoin is energy, a strategy for producing Bitcoin 
from renewable energy sources is considered. First, the amount of electrical 
energy consumption by Bitcoin production is calculated based on statistical 
data, and then based on the price of electricity in different countries of the world 
and its global average, the base price of Bitcoin is calculated. In the following, 
four scenarios are proposed for the production of Bitcoin by electricity supplied 
from non-renewable energy sources. These scenarios include coal-fired steam 
power plants, natural gas-fired power plants, natural gas/oil gas-fired power 
plants, and dual-cycle (steam and gas cycles) natural gas-fired power plants. 
Based on the amount of electricity required to produce one Bitcoin, the amount 
of pollutants emitted to produce Bitcoin and its social costs are calculated. 
These costs should be added to the base cost of Bitcoin production if non-
renewable energy sources are used to produce Bitcoin. Then, renewable energy 
sources for Bitcoin production based on the price of electricity generated by 
renewable energy sources are examined. Based on the analyses, how to choose 
the best renewable energy source to produce Bitcoin is presented as a scenario. 
This article briefly answers two key questions: 1. At what price of Bitcoin is it 
cost-effective for governments to produce it? 2. What is the best renewable 
energy source to produce it? These two questions can be useful in creating a 
roadmap and strategy for economists and governments. 
 

 
 

 

 

 

 

 

 

 

Future Energy 

Open Access Journal 

https://doi.org/10.55670/fpll.fuen.3.2.2 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

May 2024| Volume 03 | Issue 02 | Pages 16-23 

Journal homepage: https://fupubco.com/fuen 

 
ISSN 2832-0328 

mailto:afshari1@gmail.com
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M. Aliehyaei et al. /Future Energy                                                                                                    May 2024| Volume 03 | Issue 02| Pages 16-23 

17 

 

1. Introduction  

Blockchain is a system for recording information on a 
network of computer systems in a way that the information is 
secure, verifiable, and irrevocable. Information is recorded in 
a series of "blocks", each containing transactions and other 
key data. Each time a transaction is made, a new block 
containing the transaction is added. The entire stored and 
expanding information is called blockchain [1]. Blockchain is 
designed to be difficult to hack, as any change must be verified 
against other versions in the blockchain system. Bitcoin is the 
most well-known example of blockchain technology.  In the 
Bitcoin network, validation is done by mining rigs that 
compete with each other to solve a general algorithm and 
receive financial rewards for validating correctly. Copies of 
the updated blockchain are then stored in distributed storage. 
Each new set of transactions adds to the length of the 
blockchain [2]. Bitcoin is a decentralized digital currency. This 
currency is single management and is transferred from one 
user to another without the need for an intermediary [3]. 
Transactions in a network are encrypted. In the Bitcoin 
mining process, the Bitcoin miner is rewarded. This mining 
involves consuming a lot of electricity [4, 5]. Bitcoin was 
invented by Satoshi Nakamoto in 2008 as a digital form of 
money, but no one knows who Satoshi Nakamoto is [6, 7]. It 
took more than a year for the first economic deal to be made. 
The global value of Bitcoin at that time was 4 Bitcoins per US 
cent. The first Bitcoin transaction took place in 2010 when a 
man from Florida paid 25 US$ to deliver two pizzas worth 25 
US$ on May 22, 2010; At today's price, the same deal is worth 
120 million dollars. In honor of this important moment, fans 
and supporters of digital currencies call 22 May Pizza Day [8, 
9]. Bitcoin has attracted investors and the world from its 
simple beginnings in 2008 to its peak in 2020. For more than 
a decade, its price has fluctuated a lot. Bitcoin can be used to 
buy other currencies, products, and services. In the early days, 
the first Bitcoin transactions on online forums were 
exchanged with people who traded goods and services for 
Bitcoin. The value of Bitcoin was initially determined by the 
individual [5]. 

After that, Bitcoin's value grows by 200% annually. In 
November 2021, the price of Bitcoin reached about 68,000 
US$, and its market value reached about 1.2 trillion US$. Of 
course, after that, it experienced many fluctuations [10]. Over 
the years, the Bitcoin mining process has become more 
complex. In 2011, a simple desktop computer could easily 
extract Bitcoins, but now it takes 13 years for this device to be 
able to extract a Bitcoin [6, 7]. It is clear that with the 
increasing complexity of mining, more energy is consumed to 
produce Bitcoins. Bitcoin energy consumption is somewhat 
straightforward to calculate: The amount of energy 
consumption is calculated based on the hash rate (total 
combined calculations to generate Bitcoin transactions) and 
the hardware energy required (miners). It is estimated that 
Bitcoin consumes 73.1 to 78.3 TWh of electricity per year. 
This amount of energy is more than the total annual electricity 
consumption of countries like Hongkong, Ireland, Austria, 
Malaysia, and Norway. It is estimated that Bitcoin consumes 
707 kilowatt-hours (kilowatt-hours) of electricity per 
transaction [11]. The energy consumption of a Bitcoin 
transaction is approximately equal to the electricity 
consumption of a British family in two months [4, 12, 13]. The 
University of Cambridge has added a new indicator called the 
Cambridge Bitcoin Power Consumption Index (CBECI) to 
calculate daily power consumption by the Bitcoin network. 
This is an alternative to the existing Bitcoin Energy 
Consumption Index (BECI) [11, 12]. 

Research on the relationship between Bitcoin and its energy 
consumption can be divided into three general categories: 
energy consumption for Bitcoin production, its 
environmental effects, and the use of renewable energy 
sources. But the number of studies about using renewable 
energy resources for Bitcoin production is very limited in the 
third category of research. Rehman et al. [14] examined the 
time-frequency relationship between the price of Bitcoin and 
Bitcoin mining during the period from January 2013 to 
October 2018. Three sources of energy were considered: oil, 
coal, and gas. They showed that the production time of 
Bitcoins for oil and gas from mid-2014 to 2016 was about 64 
to 128 days. Das and Dutta [15] examined the relationship 
between Bitcoin energy consumption and miner revenue. In 
their view, the relationship between the two is contradictory. 
They concluded that, due to the increase in costs and energy 
consumption for Bitcoin production along with the 
downward trend of the market, Bitcoin mining will not reach 
the endpoint that exits the market. As a result, cost-effective 
Bitcoin mining depends on low-cost energy sources and 
efficient hardware. Li et al. [16] statistically analyzed data on 
the Monero currency code. They estimate that, in 2018, 
Monero mining could consume 645.62 GWh of electricity 
worldwide. The mine also consumes about 30.34 GWh of 
electricity in China and emitted 19.12 to 19.42 thousand tons 
of carbon from April to December 2018. Similar observations 
have been reported in the literature, which shows that mining 
Bitcoin consumes a high amount of energy [11, 17-20].  
Sarkodie and Owusu [21] have studied the effects of pollution 
produced on Bitcoin production. The study was based on 
4158 statistical data points acquired during the period July 7, 
2010, to December 4, 2021. The 12 variables of the study 
include the maximum and minimum and the annual carbon 
footprint trend from three non-renewable sources (oil, gas, 
and coal). The annual carbon footprint trend in this study is 
measured and calculated based on the carbon dioxide 
produced and based on the method provided by the 
International Energy Agency [21]. 

Stroll et al. [22] proposed a method for estimating the 
energy consumption of Bitcoin production. Based on the 
localization of IP addresses, the annual power consumption of 
Bitcoin production up to November 2018 was equal to 45.8 
TWh, with annual carbon emissions between 22.0 and 22.9 
Mt. This annual amount of carbon dioxide production is equal 
to the annual production of carbon dioxide by Jordan and Sri 
Lanka. Krause and Tolaymat [23] provided a way to calculate 
the minimum energy requirements of several digital 
currencies and their dollar value. The review period was from 
January 1, 2016, to June 30, 2018. Calculations showed that 
Bitcoin, Atrium, Light Coin, and Monroe mining consumed 
about 17, 7, 7, and 14 MJ of energy, respectively, to produce 
one USD. In comparison, the extraction of aluminum, copper, 
gold, platinum, and rare earth oxides, respectively, consumed 
122, 4, 5, 7, and 9 MJ of energy to produce one US dollar, 
respectively. This comparison shows that, except for 
aluminum, cryptocurrency extraction consumes more energy 
than the extraction of minerals. The data also show that the 
network calculations for the four digital cryptocurrencies are 
constantly increasing. It is also estimated that the production 
of four currency codes emits 3 to 15 million tons of carbon 
dioxide. Similar studies have concluded that, due to high 
energy consumption, digital currency markets can be an 
important source of carbon dioxide production [23, 24]. Vries 
and Stoll [25] examined the increase in e-waste through the 
increase in hardware for Bitcoin production. According to the 
method presented, about 30.7 tons of toxic chemical waste 



M. Aliehyaei et al. /Future Energy                                                                                                    May 2024| Volume 03 | Issue 02| Pages 16-23 

18 

 

and heavy metals are buried in the soil annually, which is 
equivalent to the annual e-waste in the Netherlands. Vries 
[26] concluded that renewable energy is not the answer to 
Bitcoin sustainability. He suggested other alternatives to 
Bitcoin mining, including a Proof-of-Stake mechanism. In this 
mechanism, the participating machines do not have to use 
their computing power. Malfuzi et al. [27] studied the 
thermodynamics and economics of a Bitcoin mining system 
that is powered by a solid oxide fuel cell. The fuel source of 
this system was natural gas or biogas. In that study, different 
scenarios related to Bitcoin price and extraction difficulty 
were proposed. The system was studied based on the 
economic conditions of different countries. The results 
showed that Iran, Russia, and China are the best countries to 
extract Bitcoin using grid electricity. Iran, Canada, and Russia 
are also the best countries to extract Bitcoins from the solid 
oxide fuel cell (SOFC) system with natural gas. In general, in 
the mentioned countries, the profitability of SOFC mining is 
less than that of grid mining. But the SOFC has better 
sustainability and lower environmental costs. Lei et al. [28] 
reviewed and analyzed the energy consumption of blockchain 
technologies and proposed policies in this regard. Due to the 
expansion of the digital currency market and its growing 
popularity, and the high level of energy consumption and 
environmental issues, the production of Bitcoins by non-
renewable energy sources is impacting the environment and 
energy security. Therefore, the use of renewable energy 
sources can be considered an alternative. 

In this article, the amount of electricity consumed by 
miners to produce a Bitcoin is calculated based on statistical 
data. Based on the amount of electricity consumed and the 
price of electricity in different regions, and its global average, 
a model is proposed to calculate the base price of Bitcoin. 
Various scenarios for the production of Bitcoins with 
renewable and non-renewable energy sources from an 
energy, economic, and environmental perspective are 
presented. Finally, a conceptual policy for Bitcoin production 
is proposed. The main objectives of this article are as follows: 
• Provision of the theory that Bitcoin value is supported by 

energy. 
• Calculation of the base price of Bitcoin based on the price 

of electricity in different countries and regions and based 
on the theory presented in this article (above objective). 

• Calculation the amount of air pollutants to extract Bitcoin if 
the energy source of power plants is non-renewable 
energy. 

• Calculation of the social costs of air pollutants based on the 
amount of electricity used to produce Bitcoin and the 
associated pollutants for which the cost should be added to 
the base price of Bitcoin. 

• Development of a strategy to produce Bitcoin from 
renewable energy resources based on the price of 
electricity from systems that use renewable energy 
resources. 

2. Calculation of electricity consumption for Bitcoin 

production 

  An application-specific integrated circuit (ASIC) is an 
integrated circuit chip designed and built for a specific 
purpose. Miner ASIC refers to the hardware used to extract a 
particular type of digital currency. Therefore, an ASIC Bitcoin 
miner is only for Bitcoin mining. The extraction process 
means solving a complex mathematical problem using hash 
functions associated with blocks containing transaction data. 
The first miner to solve the puzzle can authorize the 
transaction or add Bitcoins to the block. Each winner of 

Bitcoin mining receives a prize (a certain amount of Bitcoin). 
This bonus includes all transaction fees. To calculate the 
amount of electricity required to produce Bitcoin, the entire 
network must be considered. It should be noted that the 
amount of energy required for electricity depends on the 
miner model, its efficiency, and the difficulty of extracting 
Bitcoins [5, 23, 29-31]. According to data published in the 
reference [32], a Bitcoin is currently produced at 122,000 
Terra hash per second for 24 hours. Note that hash rate or 
hash power is a measure of the performance of a miner 
device. In other words, a hash rate indicates the rate at which 
a miner succeeds in solving a hash to receive a reward. In the 
Bitcoin extraction process, blocks containing approved 
transactions must be hashed before being added to the 
blockchain. The process of hashing blocks is also called 
hashing [32]. The number of ASICs required can be written as 
follows: 

𝑁𝐴𝑆𝐼𝐶 =
122000

𝑁𝐻𝑅
                                                                                     (1)  

Here, N denotes the number, and subscript HR means hash 
rate. 
The electrical energy required for one Bitcoin production is 
calculated by [9, 33]: 

𝐸 = 24 × 𝑁𝐴𝑆𝐼𝐶 × �̇�𝐴𝑆𝐼𝐶                                                                      (2) 

where �̇�𝐴𝑆𝐼𝐶  denotes electrical power consumption by one 
ASIC (kW). 
As an example, considering equations 1 and 2, the S19 Pro 110 
Miner needs 86,509 kWh of electricity to generate a Bitcoin 
[5, 23, 29-31]. The whole market does not use the above 
model. For this purpose, market share and different types of 
miner models are considered.  This model was presented for 
the first time in reference [23]. So, the top Bitcoin miner 
models that have the largest market share are considered 
[34]. Table 1 shows the specifications of those miners. 
Because the market share of those miners is almost in the 
same range, equal market share is considered for them. 

Table 1. Top Bitcoin miner models [34] 

 
According to equations 1 and 2 and the data in Table 1, the 
amount of electrical energy required to produce a Bitcoin is 
equal to 120,360.2 kWh. 

3. Developing a methodology for calculating the base 

price of Bitcoin 

The support of the currencies of countries is a certain 
amount of gold or other precious metals and foreign exchange 
reserves. According to the authors of this article, Bitcoin is 
financially supported by energy.  

Miner model NHR (TH/s) ẆASIC (kW) 

Antminer S19 Pro 110 3.25 

Antminer T19 84 3.15 

AvalonMiner A1166 Pro 81 3.4 

WhatsMiner M30S++ 112 3.472 

AvalonMiner 1246 90 3.42 

WhatsMiner M32-62T 62 3.536 

Ebang EBIT E11++ 44 1.98 

Ebit 12+ 50 2.44 

https://www.softwaretestinghelp.com/bitcoin-mining-hardware/#1_Antminer_S19_Pro
https://www.softwaretestinghelp.com/bitcoin-mining-hardware/#2_Antminer_T9
https://www.softwaretestinghelp.com/bitcoin-mining-hardware/#4_AvalonMiner_A1166_Pro
https://www.softwaretestinghelp.com/bitcoin-mining-hardware/#5_WhatsMiner_M30S
https://www.softwaretestinghelp.com/bitcoin-mining-hardware/#6_AvalonMiner_1246
https://www.softwaretestinghelp.com/bitcoin-mining-hardware/#7_WhatsMiner_M32-62T
https://www.softwaretestinghelp.com/bitcoin-mining-hardware/#8_Ebang_EBIT_E11
https://www.softwaretestinghelp.com/bitcoin-mining-hardware/#10_DragonMint_T1


M. Aliehyaei et al. /Future Energy                                                                                                    May 2024| Volume 03 | Issue 02| Pages 16-23 

19 

 

Figure 1 shows the production or extraction cycle of Bitcoins. 
In this process, electricity is generated by power plants that 
use renewable or non-renewable energy sources. If non-
renewable sources are used to generate electricity, the initial 
cost of equipment, installation, commissioning, and 
maintenance of the power plant along with the price of fuel is 
taken into account to calculate the price of electricity. But, if 
renewable energy sources are used, the cost of fuel is 
eliminated, but other costs still exist. In both cases, the 
generated electricity has a value and price that is consumed 
by the miners to produce Bitcoins. Thus, the value and price 
of Bitcoin are inherently supported by the price of energy 
consumed to produce and extract it. So, the base price of 
Bitcoin can be considered based on the price of electricity 
consumed to produce it. Of course, at certain times, due to 
economic issues, the price of Bitcoin can be more or less than 
its base, which is due to economic issues such as buyers' or 
sellers' power, injecting money into the market, expansionary 
or contractionary economic policies of governments, etc. 
Then, the value and price of Bitcoin can be evaluated from an 
economic point of view in two ways: technical and 
fundamental. But Bitcoin's digital currency still has an 
intrinsic value that stems from the amount of electricity 
consumed to generate or extract it. Except for specific 
periods, this value has been on the rise for more than two 
decades due to the increasing complexity of its extraction and 
production and the increase in the number of hash rates for 
its production or extraction. Table 2 shows the electricity cost 
and base price of Bitcoin in 2022 in different countries and its 
average global price. The electricity cost is taken from Ref. 
[35]. Based on the consumption of 120,360.2 kWh of 
electricity to produce a Bitcoin, as described earlier in this 
article, the base price of a Bitcoin is determined based on the 
price of this amount of electricity.  
 

Figure 1. Production or extraction process for Bitcoins 

Table 2. Electricity cost and base price of Bitcoin in 2022 in 
different countries and its average global price 

 

 

No. Countries 
Electricity cost 

(US$/kWh) [35] 
Bitcoin basic 

cost (US$) 

1 Belgium 0.32 38515.4 

2 Chile 0.17 20461.3 

3 China 0.09 10832.4 

4 Denmark 0.36 43329.8 

5 France 0.2 24072.1 

6 Germany 0.35 42126.2 

7 India 0.08 9628.8 

8 Italy 0.23 27682.9 

9 Japan 0.24 28886.5 

10 Kenya 0.22 26479.3 

11 Mexico 0.09 10832.4 

12 New Zealand 0.21 25275.7 

13 Qatar 0.03 3610.8 

14 Russia 0.06 7221.6 

15 Saudi Arabia 0.05 6018.0 

16 Singapore 0.18 21664.9 

17 Turkey 0.06 7221.6 

18 
United 
Kingdom 0.28 33700.9 

19 United States 0.16 19257.7 

20 World 0.135 16248.7 



M. Aliehyaei et al. /Future Energy                                                                                                    May 2024| Volume 03 | Issue 02| Pages 16-23 

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The base price of Bitcoin shows the real value of Bitcoin in a 
country or its global average. The change in the price of 
Bitcoin higher or lower than its base price is due to market 
influences and is related to influential economic parameters. 
In connection with the subject of this article, if the price of 
Bitcoin in the economic market grows above the base price, 
the production of Bitcoin in that country is cost-effective. 
otherwise, it is not cost-effective. Of course, special attention 
should be paid to whether the price of electricity in a country 
is its real value or whether the government subsidizes it. 
From Table 2 and according to the price of electricity, the 
highest base price of Bitcoin is for Denmark and Germany and 
the lowest is for Qatar and Saudi Arabia. For example, the base 
price of Bitcoin in Qatar is 3610.8 US$, while in Denmark it is 
43,329.5 US$, which is about 14 times more. It can also be 
seen in Table 2 that the highest electricity prices and 
consequently the base prices of Bitcoin are related to 
continental Europe and the cheapest are related to the Middle 
East region due to abundant sources of fossil fuels. Also, the 
average global electricity price is 0.135 US$ and the base 
Bitcoin price is 16248.7 US$. 

4. Analysis of the production of Bitcoin by non-

renewable energy sources 

To generate Bitcoin from non-renewable energy sources, 
the following four scenarios are considered: 
• Scenario 1: Electricity is generated by a coal-fired steam 

power plant. 
• Scenario 2: Electricity is generated by a gas power plant 

that is fueled by natural gas. 
• Scenario 3: Electricity is generated by a gas power plant 

whose fuel is gas with gas oil. 
• Scenario 4: Electricity is generated by a combined cycle 

power plant that includes a gas power plant, steam turbine, 
and heat recovery steam generation (HRSG), and is fueled 
by natural gas. 

Table 3 shows the unit amount of selected pollutants for the 
four scenarios [35]. In Table 3, the pollutants considered are 
CO2, NOx, and SO2. Note that power plants emit other air 
pollutants, as well as wastes that enter the soil and water. In 
this article, only selected air pollutants during operation are 
considered. 

Table 3. Amount of pollutants produced for four scenarios for 
generating Bitcoin from non-renewable energy sources 

 
Figures 2 to 4 show the production of CO2, NOx, and SO2 for four 
scenarios, for the production of one Bitcoin. The highest amount of 
pollutants are related to Scenario 1 due to burning coal in the steam 
power plant and the lowest is related to Scenario 4, due to the 
recovery of gas turbine exhaust hot gas in HRSG for efficiency and to 
the use of natural gas as the fuel. To create a link between the 
economy and the environment, the social costs of environmental 
pollutants are considered. The social costs of environmental 
pollutants are considered here to be the costs that are indirectly 
imposed on people in the community due to environmental 
degradation.  

Figure 2. Quantities of CO2 generated per Bitcoin produced, 
for four scenarios 
 

Figure 3. Quantities of NOx generated per Bitcoin produced, 
for four scenarios 
 

Figure 4. Quantities of SO2 generated per Bitcoin produced, 
for four scenarios 
 
These costs include reduced productivity, illness, and death 
in the community. These costs depend on the living 
conditions of the community, the local location, and the type 
of environmental degradation. Table 4 shows the social costs 
of CO2, NOx, and SO2 pollutants [36, 37]. According to the data 
in Tables 3 and 4 and Figures 2 to 4, the social costs of air 
pollutants for the production of a Bitcoin are 13384 US$, 6696 
US$, 4050 US$, and 3368 US$, respectively, for scenarios 1 to 
4. Therefore, if any of scenarios 1 to 4 are used to generate 
electricity and, subsequently, Bitcoin, the costs mentioned 
should be added to the base price of Bitcoin (Table 2). 
 
 
 

Scenario 
CO2 

(g/kWh) 

NOx 

(g/kWh) 

SO2 

(g/kWh) 

1 930 2.1 8.8 

2 800 1.6 1.4 

3 610 1.1 0 

4 510 0.9 0 



M. Aliehyaei et al. /Future Energy                                                                                                    May 2024| Volume 03 | Issue 02| Pages 16-23 

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Table 4. Social costs of CO2, NOx, and SO2 pollutants [36, 37] 

 
5. Investigation of the production of Bitcoin by 

renewable energy sources  
The main types of renewable energy sources considered 

here are geothermal, solar, biogas, wind, and hydro. The 
maximum, mean, and minimum levelized cost of electricity 
(LCOE) for various renewable energy resources are shown in 
Table 5 [38-40]. The variation of LCOE from maximum to 
minimum depends on the potential of that country or region 
for that renewable energy source, import and export taxes, 
and other factors. 

Table 5. Maximum, mean, and minimum LCOE for various 
renewable energy resources 

 
5.1 Case study 

A detailed case study is now considered. The price of 
electricity and the base price of Bitcoin in Denmark are 0.36 
US$/kWh and 43,329.8 US$, respectively. Considering the 
high potential of wind energy in that country, the shore-wind 
turbine is selected to produce electricity. Considering the data 
in Table 5, the average cost of electricity is 0.05 US$/kWh.  
According to the price of electricity in Denmark (Table 2: 
0.366 US$/kWh), the profit per kilowatt hour of electricity is 
0.31 US$/kWh. According to the calculations in this article, 
120360.2 kWh of electricity is required per Bitcoin produced. 
Now, if this amount of electricity is sold to the electricity grid 
instead of producing Bitcoins, the profit will be equal to 
37,311,662 US$. If we consider that Bitcoin is generated by 
this system, and according to the price of electricity generated 
by this system (0.05 US$/kWh), the cost of producing a 
Bitcoin is equal to 6018 US$. Considering the current price of 
Bitcoin (2 June 2022: 31,700 US$), the profit is 25,682 US$. To 
reach the tipping point, the profit from the sale of electricity 
is 37311.6 US$ should be added to the base price of Bitcoin by 
non-renewable energy sources (6018 US$), which is 43329.7 
US$, which is the same as the base price of Bitcoin shown in 
Table 2. 

Note that if the electricity used to produce Bitcoin is replaced 
by power plants that use fossil fuels, the social costs of 
environmental pollutants (part 4 of the article) should be 
added to the base price. Also, in the case of Bitcoin production 
by renewable energy sources, miners can be placed next to 
the power generator, thus the cost of electrical power 
transmission and distribution is eliminated. Due to the new 
digital currency market, price changes for digital currencies 
are very sharp. In 2021, for example, the price of digital 
currencies fluctuated from about 34,000 to 61,000 US$. So the 
question is, if it is cost-effective to produce Bitcoin in one 
period and not in another, is there an alternative way to use 
the electricity allocated to produce Bitcoin? 
The answer to this question depends on various factors such 
as the needs of a region or country, the number of its natural 
resources, the level of the social and economic welfare of 
society, etc. There are several ways to consume electricity 
generated at a time when it is not cost-effective to produce 
Bitcoins. For example, in a cold or hot region or country, 
heating and cooling loads for residential, commercial, and 
office buildings can be provided. In regions and countries that 
have a shortage of drinking water resources and in the 
vicinity of the sea or ocean, drinking water can be produced 
by reverse osmosis system, or in countries that have a 
shortage of fuel and have sufficient water resources, 
electricity can be used to split water via electrolysis to 
produce hydrogen as a clean fuel. Along with all these 
solutions, we can continue to produce Bitcoin and look at it as 
a long-term investment. 

6. Proposing a strategy to produce Bitcoin by 
renewable energy resource 
In this part of the article, the following strategy is 

proposed for the production of Bitcoin by renewable energy 
sources: 
• Step 1: The potential of renewable energy sources in that 

region or country is examined and, according to the 
potential of these resources, and their availability and 
usability, the priorities of these resources are selected. 

• Step 2: The price of electricity produced by power 
generation systems with renewable energy sources 
selected in the first step is calculated. To calculate the price 
of electricity generated, two modes are considered: with 
and without considering the transmission and distribution 
electrical network. 

• Step 3: Power generators in the country or region 
considered are examined. If the energy sources of power 
generation systems are non-renewable sources, the social 
costs of environmental pollutants (similar to scenarios 1 to 
4 of Part 4 of the article are added to the base price of 
electricity (Table 2 of the article). 

• Step 4: If the price of generated electricity by renewable 
energy resource system (considering the costs of electricity 
transmission and distribution) is less than the price of 
electricity without government subsidies and the price of 
Bitcoin is less than the base price of Bitcoin (Table 2), 
electricity generation is neglected by the selected system in 
steps 1 and 2. 

• Step 5: If the price of Bitcoin is lower than the Bitcoin base 
price shown in Table 2 and the price of electricity 
generated by the proposed system of electricity generation 
with renewable energy sources is lower (taking into 
account the costs of transmission and distribution of 
electricity) than the price of electricity in that area or 
country, the generated electricity is sold to the electricity 
grid. 

Air pollution Values (US$/kg) 

CO2 0.042 

NOx 7.3 

SO2 7.4 

Type of 
renewable 

energy resource 
Sub-division 

 LCOE (US$/kWh) 

Max Ave Min 

Wind 
On-shore 0.14 0.05 0.029 

Off-shore 0.2 0.088 0.049 

Solar PV 

Utility-scale 0.172 0.056 0.034 

Commercial 0.14 0.094 0.074 

Residential 0.223 0.126 0.108 

Solar thermal  - 0.13 0.121 0.112 

Hydro 
Reservoir (≥ 5 
MW) 

0.142 0.072 0.039 

Hydro 
Run of river 
((≥ 5 MW) 

0.104 0.068 0.046 

Geothermal - 0.12 0.099 0.078 

Biomass - 0.182 0.118 0.053 



M. Aliehyaei et al. /Future Energy                                                                                                    May 2024| Volume 03 | Issue 02| Pages 16-23 

22 

 

• Step 6: If the price of Bitcoin is higher than the base price of 
Bitcoin shown in Table 2, the production of Bitcoin by the 
system is recommended. In this case, Bitcoin production 
miners can be placed next to the power generation system, 
which eliminates the cost of electricity transmission and 
distribution. 

7. Conclusion and policy implications 
Bitcoin, the first decentralized digital currency 

introduced by an anonymous person or group since 2008, has 
attracted worldwide attention. A significant number of 
economists have introduced Bitcoin as a new phenomenon in 
the 21st century that could reduce global inflation. Given the 
tens of thousands of digital currencies that have emerged 
since the advent of Bitcoin and its price growth trend over 
more than a decade, which are signs of the growth of this 
business. In addition to being money, Bitcoin has always been 
considered a tool for investing and storing value, which is why 
it is called digital gold. One of the most important problems in 
the production or extraction of Bitcoins is the high-power 
consumption by miners. If the energy sources of electricity 
generation are supplied by non-renewable energy sources, in 
addition to emitting air pollutant gases, it will increase 
greenhouse gases and consequently contribute to climate 
change. In the following, four scenarios are proposed for the 
production of Bitcoin by electricity supplied from non-
renewable energy sources. These scenarios include coal-fired 
steam power plants, natural gas-fired power plants, natural 
gas/oil gas-fired power plants, and dual-cycle (steam and gas 
cycles) natural gas-fired power plants. Based on the amount 
of electricity required to produce one Bitcoin, the amount of 
pollutants emitted to produce Bitcoin and its social costs are 
calculated. These costs should be added to the base cost of 
Bitcoin production if non-renewable energy sources are used 
to produce Bitcoin. If renewable energy sources are used to 
produce electricity that reaches the consumption of bitcoin 
production, in addition to solving the problems mentioned 
above, it can be an income-generating factor for countries, 
especially developing countries where the price of electricity 
is low. In this article, based on the price of electricity in 
different countries and regions, the base price of Bitcoin is 
calculated, and a strategy is presented based on which price 
of Bitcoin is cost-effective to produce for that country, 
considering the price of electricity. 

Nomenclature 
HR: Hash rate 
N: Number 
�̇�: Electrical power consumption 

Subscripts 
ASIC: Application-specific integrated circuit 

Ethical issue 
The authors are aware of and comply with best practices in 
publication ethics, specifically concerning authorship 
(avoidance of guest authorship), dual submission, 
manipulation of figures, competing interests, and compliance 
with policies on research ethics. The authors adhere to 
publication requirements that the submitted work is original 
and has not been published elsewhere in any language. 

Data availability statement 
Data sharing does not apply to this article as no datasets were 

generated or analyzed during the current study.  

Conflict of interest 

The authors declare no potential conflict of interest. 

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