The following is a condensed version of a report that was published as part of our company’s GxxD series, which examines the nexus between decarbonization (GX) and digitalization (DX) trends in Japan. To read the report in full, please check: https://www.yuri-group.co.jp/gxxd

Bitcoin mining never quite found a welcome mat in Japan. High electricity costs, coupled with the volatility of cryptocurrencies and concern about its environmental impact, mean that there’s a negligible amount of Bitcoin mining in Japan. That might soon change.

Agile Energy X, a TEPCO Power Grid unit that transports about a third of Japan’s electricity, claims that Bitcoin mining can spur a new boom in renewables. The firm is moving ahead with a Proof of Concept (PoC) model that will see Bitcoin mining create the kind of flexible electricity consumer that can help solar and wind projects solve their grid access problems.

The timing is fortuitous. Since spring 2024, Bitcoin’s price has risen and many fans see a new bull run due to a technical event known as ‘halving’. To capitalize, Agile Energy X wants to install a nationwide distributed computing network capable of monetizing excess renewable energy via Bitcoin mining.

This network would soak up electricity from the hundreds of solar farms that get curtailed when the system has excess power generation. The plan would give solar operators a new income stream; the grid would find a flexible offtaker to help it balance; and Agile Energy X would monetize green electricity that otherwise would be wasted. With fewer grid chokepoints, there would be more incentive to invest in new renewables capacity.

Agile Energy X says this approach can be more efficient than batteries or hydrogen as a way to mop up and store surplus power. It would also be cheaper and easier to handle than existing energy management systems. But will the government support the arrangement?