Twitter Spaces: Solar Energy, Batteries, & Bitcoin Mining with Ali Chehrehsaz
Co-founder and CEO at TerraVerde Energy Ali Chehrehsaz joins Logan Chipkin and Kent Halliburton to discuss the synergy between solar energy, batteries, and Bitcoin mining.
Link to Audio: https://twitter.com/i/spaces/1yNxaNRgZPlKj?s=20.
Logan Chipkin (00:01:36):
Think we've got the technical difficulty solved. All right. Um, first of all, Ali, am I saying your namecorrectly? Is it Ali? Yes, sir. All right, excellent. Um, well thank you verymuch for joining. Uh, it's three 30. We can go, go ahead and get started. Um, Ifind that usually people start shuffling in a few minutes in, but, uh, werecord all of these, um, for posterity. Um, so having said that, helloeveryone. My name is Logan Chikin. I'm the content manager at SaaS Mining wherewe make renewable bitcoin mining accessible to regular people. And today I'mexcited to be joined by, uh, Ali here, who's the c e O of, uh, optimizedinfrastructure, and I'm very excited to get into that and kind of the nexus ofsolar and Bitcoin, which, um, our president and c e o uh, also has a lot to sayabout and has a lot of experience in. So, before we introduce you, Ali Kent,would you like to introduce yourself to the audience?
Kent Halliburton (00:02:29):
Yeah, thank you, Logan. Um, so myname's Kent Halliburton president, and c o o, uh, here at SaaS Mining. So thatjust means I run all the internal operations for the company. And my first lifeor first career, uh, was in the solar industry. And actually I am quite excitedafter peruse and LinkedIn and seeing how many connections Ali and I have incommon to see where today's conversation goes. So Bitcoin mining is, uh, the,the second chapter in my career here, and very excited to be, uh, launchingactually today, our first facility in Wisconsin, uh, running off hydropower. Soanyway, I'll, I'll quit hogging the stage and, uh, let you do your thing asour, uh, as our host. Logan, do you wanna say a few words to the audience knowswho you are?
Logan Chipkin (00:03:17):
Oh, sure. Yeah. I, uh, I describemyself as the content manager. Um, I have a career basically, I spent my entirecareer, uh, writing about all sorts of things that interest me. Um, so I'vewritten, um, a number of books. Actually. I just finished my novel, um, and nowI'm editing that I have a journalistic background in, uh, science and a fewother related fields. And now I have the pleasure of writing about, um,economics and Bitcoin, which I'm extremely, uh, passionate about, uh, herewith, uh, SAS mining. Uh, so that's a bit about me. And, uh, Ali, would youlike to introduce yourself and maybe say a few words about optimizedinfrastructure?
Ali Chehrehsaz (00:03:55):
Sounds good. Thank you for having me,uh, on your, uh, clear space this year. Uh, I'm AIA Harris, c o of optimizedinfrastructure. I'm an engineer by training. I've been in the energy space forabout 16 years, uh, last 14 of it in the solar space. I believe I'm going to bespending the rest of my career in the solar space, uh, helping this, uh,beautiful technology grow and become globally accessible everywhere. Um, my,um, my, my current life is, like I said, is in the solar space. I co-founded acompany in California called Terra Verde Energy about 12 years ago, uh, wherewe, uh, got our start in doing analytics development and asset management forsolar projects. And, uh, leveraging my knowledge, the challenges in the solarindustry is how I stumbled into the world of Bitcoin mining, and saw Bitcoinreally as a another extension of a flexible on-demand resource to help createmore value for solar and grow solar globally the way it's promised to be. Uh,and that's how we set up, uh, optimized infrastructure, which is, uh, an APIfirst, uh, software solution to help solar developers plan out their projectsanywhere on the planet, uh, leveraging Bitcoin to drive and increase the valueeconomic economics of their projects, uh, and help this momentum that Bitcoinmining has to access and reach its goal and potential by utilizing the cheapestand cleanest source of power, especially utilizing any stranded and surpluspower that comes with it. And ultimately, u utilize Bitcoin as a driver forgrowth of energy worldwide.
Logan Chipkin (00:05:50):
Excellent. Uh, thanks Sally. Yeah. Sowhy don't we, uh, pursue that line of, uh, inquiry regarding the economics ofsolar. Um, so I know optimized infrastructure's mission is to fundamentallyimprove the economics of solar. So maybe why don't you, um, explain what theproblem is regarding the economics of solar, um, that optimized infrastructureis working to solve, and how bitcoin mining plays into that.
Ali Chehrehsaz (00:06:13):
Sounds good. So the challenge that wehave with solar and, uh, generally all intermittent renewables have, iscategorize for us in, in this tagline that renewables are prisoners of geography,of time and geography. Um, more specifically, that really has to do with the,really the fundamental basis that developing a solar project. Um, really you goand you deploy them where the resource is the greatest. So the sanus areas, andyou get access to that resource when the resource becomes available. So duringdaytime for solar, in the beginning, at any geography, any location, any grid,uh, the initial penetration of solar is value add. And that value creationcontinues to grow until you reach the inflexible demand curve of that powergrid. Uh, electricity on the power grid is generally quite fixed andinflexible. It doesn't vary that much. Um, outside of the call it catastrophicweather events or outages or issues that might come up, your, your day over daydemand profile is quite static and quite fixed.
And for a resource like solar thatonly operates during the day, once you reach a capacity point where you startto have surplus generation beyond your daytime demand, uh, you start to havethis value deflation problem, which is really, is a intrinsic feature of, uh,these generation sources in that the more solar projects get added to thatlocation on the grid or that transaction hub, the lesser the value of all solarenergy becomes for every provider in that location. So in, in some ways, solarhas this anti network effect problem where the more participants come in, theworse it gets after a certain point. So initially we can see solar growing,getting and getting developed anywhere, uh, where you have access to theresource. But in order to go from a 10% grid penetration to 20, 30, 40, 50,you're not going to be able to do that with just solar alone. And this is whereother technologies like battery storage and other flexible on demand loads cancome in and start to help create more value for this energy resource.
Kent Halliburton (00:08:51):
Ali, it's, it's, uh, good to hear howyou guys are looking to improve the economics of solar. You know, coming from asolar background myself, uh, and getting into Bitcoin mining, I've noticed thatthere are, there's quite a lot of controversy around solar, uh, as a renewableenergy, whether it's how it's made or, uh, the intermittency. But I'm curiousto know from your perspective, what are the areas that many bitcoiners getwrong when it comes to solar?
Ali Chehrehsaz (00:09:26):
I would say the, the key area that,uh, we are trying to change and, and bring some clarity education around it, isexactly on the notion. Uh, you mentioned Kent, which is the intermittency ofit. The way we look at solar inside the industry and how we utilize it, how wecreate value with it is not by leaning into a problem of, uh, of intermittency,but actually leveraging that in order to create a probabilistic energyproduction profile from it. So solar is something that, you know, you get yourenergy from, from the sun, you get access to weather forecast by studying theclimate and utilizing that data, you would be able to project and forecast howmuch energy would be available at any location in the world. And we have enoughsatellite data coverage now with enough granularity, uh, down to a squarekilometer of any location on the planet.
We can project over the next fiveminutes, next hour, next day, next week, how much solar radiance will beavailable, and how can we utilize that power to create value given theprojected demand on the grid. So for us, if we can change that point of viewfor the Bitcoin mining community, I think we've done a great job to positionsolar to help with the power needs of these compute operations. And the usersthat come to optimize are utilizing our software. That's, that's how they'retrying to figure out this problem. They understand they have grid as an, as anoption, but rely on the grid has risks as well. So they utilize solar andself-generation in a, in a vertically integrated operation to hedge againstthose grid fluctuations and in fact, use some of that power to del deliver morevalue from their project that may have otherwise been a standalone gridconnected Bitcoin mining operation.
Logan Chipkin (00:11:41):
So, Ali, is this what's meant by thefact that, um, your company's platform is quote unquote intelligent, that itorchestrates power flow in real time? Is this a way that you, uh, mitigate theintermittency issues?
Ali Chehrehsaz (00:11:54):
Exactly. So we, we are integratedwith satellite data providers to figure out any location in the world, how muchsolar power is available or would be available, utilize that data along withthe knowledge that we have from, you know, the Bitcoin mining network that'sopenly available, the asset configuration of a solar and mining plant atwhatever location you're connected to, and then ingesting in any, um,contractual power prices or real-time power prices from a grid provider. Andessentially help a Bitcoin miner make decisions as incremental as a five minutebasis to figure out how much power will be available from what sources, whatare the status of the assets that are installed, deployed on the site, and helpmake a good decision around where to deliver that power for what value creationand use that, use that actual projection and the correction that that ends uphappening after every interval, uh, to help derive towards the projecteconomics.
So typically, um, Logan, the way asolar project is set up is it may have a offtaker on the grid for the powerthat it has, and it has some obligations for that power delivery. Similarly, abitcoin miner might have preferences around the uptime they want from theirplant and the cost of electricity they want to put into that operation. Beingable to toggle the line and, and the dance between the amount of power fromsolar that should be delivered to the grid against the committed P p a obligationsand fulfilling the, uh, projections for the Bitcoin mining operation. Utilizingthat power mix is how we come in and help figure out this powerfulorchestration.
Logan Chipkin (00:13:47):
And I'm curious, so a as we know, youknow, we've talked about this on many Twitter spaces, that the reason Bitcoinmining is so capable of upgrading humanity's relationship with energy andrendering, uh, energy sources like solar, uh, profitable where when they mighthave otherwise not been is for, well, a a number of reasons. One of which isthat Bitcoin mining is such a flexible, uh, buyer of energy. So I'm justcurious, do you work with other buyers of energy that come close to Bitcoinmining's flexibility, or is Bitcoin mining really a unique collaborator in yourkind of ecosystem?
Ali Chehrehsaz (00:14:22):
That's a really good question, Logan.The way we think about Bitcoin mining is, uh, in fact actually a little bit.Uh, we use a different terminology, different vocabulary. Uh, flexible is whatBitcoin miners have latched onto, and it makes a lot of sense and a lot ofdistributed energy resources are touted as flexible. But I think what how weneed to message this broadly is, uh, what we use, which is the term on demandenergy resource. And that really relates to what you see in, in the worldaround on-demand food delivery, on-demand, taxis on demand, uh, support for acompany. You know, that term on-demand is, is more, um, accepted and morevisually seen and understood by, by, uh, the, call it the broader consumerbase. So positioning bitcoin mining as an on-demand buyer of electricity, we'veseen more success with that in, uh, in our communication with the generalpublic, with investors, with folks in the space.
The other thing that we see Bitcoinmining is doing the services delivering, is that it's in fact establishing thiscategory for on-demand buyer of electricity. It's very easy today to prove thatthesis. We can do the math and physics, we have access to the Bitcoin networkdata, the difficulty, the price of Bitcoin, the machines you're using at thesite to figure out the profitability of running, uh, this operation. But thebroader category that Bitcoin is helping establish and Bitcoin is the reallythe tip of the spear for is this on demand compute operation where, uh,somebody can come in and deploy their own data centers, uh, deploy ai, uh,image rendering solutions, sell those services on on-demand basis. Um, you seeAmazon coming out with their Amazon outposts where anybody can deploy, uh,their own version of the Amazon servers locally on their own machines, um,using that service can be utilized on an on-demand basis as well. So there are,there is this category that's coming, um, Bitcoin is leading the way. Um, but Ithink if we are able to successfully establish Bitcoin as the first on-demandbuyer of electricity, I think we've done a great service for the power sectorand not just for solar, for any power generation source to integrate these typeof compute loads within their plants.
Kent Halliburton (00:17:00):
Yeah, I think what you're doing,Ellie, is, is fascinating and, and much needed in the industry. Um, and I'mcurious if you have run numbers and have any projections on the impact that,that your technology at optimized infrastructure could have for the grid atlarge as far as how far, uh, solar penetration could reach.
Ali Chehrehsaz (00:17:25):
Yeah, that's a really exciting andambitious project. Um, and in theory that is very much possible. That's one ofour call it hopes of, you know, the data this startup scales up and we are big enoughin theory, we can really price out the value and the benefit of solar energyanywhere where you have land and access to a grid. Uh, I mean, there's a wholeother category of these sort of technologies for, um, communities withoutaccess to a grid and utilizing bitcoin mining as a, as a buyer of power, as aload balancer for microgrid. But putting that aside, the established grid thatwe have, which is, you know, the oldest technology that we have on the powermarkets, but it is the best thing that we got still today, does need a lot ofhelp and figuring out how to forecast and, and put as much clean energy ontothat grid, but being able to utilize it and not impacting the operations on, onthe grid side.
So the grid operators would be huge.Um, and yes, we would be able to do that. Uh, it would be a, uh, ambitiousproject and undertaking, uh, but we're starting small. We're starting with theproject developers today that want to deploy vertically integrated solarprojects and solar mining projects around the world. Uh, but we are seeing nowthe next wave of the opportunity, which is we can really integrate mining andthis on-demand compute within a system of solar and battery storage portfolioprojects to deliver power to the grid or to any large buyer of electricity onthe grid on a 24 7 hourly matched basis. That I think is going to be the nextbig thing that if we can prove and showcase and, uh, meet the demands of theselarge electricity buyers that want 24 7 hourly match energy, um, I think itwould be unleashing a whole new opportunity for solar.
Kent Halliburton (00:19:37):
Yeah, I, I, I tend to agree and, uh,very excited to see that too. Um, you know, I, I wanted to shift gears justslightly and, and hear your take on the controversy around batteries on thegrid at versus Bitcoin mining within the Bitcoin community. You often hearthat, uh, batteries are too expensive and there's no way they can scale fastenough to meet our needs versus Bitcoin mining, uh, can really help us, youknow, as, as sort of a dampener on the grid. Mm-hmm. <affirmative> likewhat we experienced last, uh, uh, two weeks ago, uh, in Ercot, um, with the,uh, the demand response there, uh, from Texas Bitcoin miners. I'm curious howyou see, uh, those two technologies playing out. Is it in either or situation?Is it both and, uh, yeah, how would you weigh in there?
Ali Chehrehsaz (00:20:32):
Yeah, it's a good, another goodquestion, and you're right, batteries do capture a lot of imagination and, uh,a lot of controversy. Um, I think it is a both end and the problems as often weexperience it in society are more temporal than actually factual in, you know,in one way or the other. Uh, and the reality is there are, um, bitcoin miningoperations that are utilizing solar and the grid and are providing a lot ofvalue to the grid as a, uh, demand response solution, which is fantastic. Thereare projects that are utilizing batteries with solar and mining integration tocreate a more uptime opportunity utilizing those batteries, uh, to playarbitrage under grid, um, and also provide this very same services that Bitcoinminers have done in text us on demand response. That's how batteries got a lotof their value unlocked in the first place.
Um, so batteries actually led the wayfor those solutions to get created. And in fact, if you look at the data, uh,which we actually published an article on Bitcoin magazine about it is, um,retrofitting existing solar plants in the US with batteries. These are large scalebatteries has been a huge business. And 2021 was a really big year for that.I'm looking at the data now and we're seeing that some 140 plants wereconnected with battery storage with a tune of 2.2 gigawatts of capacity, sevengigawatt hours of duration. These are big numbers, right? Um, and that's,that's what we saw in 2021. I don't have a data for all of last year yet, butthat's coming out. And in fact, now with, at least within the us uh, with theIRA and the funding that's available for, uh, through investment tax creditsfor storage, I think we're going to see, um, a huge surge for batteries gettingdeployed against existing and new solar projects. So I think the conversationis going to change. We are going to see more of this. Um, the users are, uh,working with our software and, and developing designing projects by and largeall have solar paired with batteries, uh, and they're integrating mining intothese projects. Or they want to build a brand new solar project with a batterypaired with Bitcoin mining, and they're seeing this load shifting optimizationarbitrage opportunity as a value add, which is enabled by the battery storage.
Logan Chipkin (00:23:12):
Yeah, this, uh, this combination ofBitcoin mining and battery strikes me as just, cuz like I said earlier, just asa science nerd and an econ nerd, this is very cool. You know, we're likeliterally seeing the unification of, uh, new energy and new money, and you guysare at the cutting edge of that. So that's very cool. So, on that note, I'mcurious, um, how would, let's say you, uh, you still wanted to use batteries inyour business model, but not bitcoin mining. So let's just pretend SatoshiNakamoto never existed. So how would your business model be different if youdidn't have, have Bitcoin mining, but you still had batteries?
Ali Chehrehsaz (00:23:47):
So that's the typical solar plusbattery business model that, uh, is out there exists. There are many companiesdoing it. Um, I would say that's figured out science, um mm-hmm.<affirmative> optimize what's set up with the clear mission to integratethese on demand compute loads and starting with Bitcoin within this system ofsolar and solar plus storage, um, to help create the most profitable solarpower plants. So that, that was the, the aha moment that we had. The missionthat we set out to do, ah, was to bring all of these parties together andenable project developers around the world to go do this kind of work.
Logan Chipkin (00:24:26):
Ah, I see. Very cool. Okay. So now onthat note, and this is another theme of, uh, kind of, uh, our Twitter spaces iswe really push back against the, uh, energy foot that you hear a lot, um, fromcritics of Bitcoin mining. So, uh, and Kent might frankly know more about thisthan me in terms of the, the solar industry culture. So, you know, when youspeak with your colleagues across the solar industry and you tell them, oh,we've had this aha moment, we can, you know, leverage Bitcoin mining to ourpurposes, uh, do they kind of, uh, react with a knee jerk reaction of, uh, oh,but isn't Bitcoin mining bad for the environment? Or, or isn't that a waste ofenergy? Do you ever get that sort of thing?
Ali Chehrehsaz (00:25:04):
No, that's not a great question. Um,and you're right, if you scan the headlines, you do see a lot of that. Uh, andI think everybody sort of goes through this process themselves. I would say myexperience has been, um, quite delightful, uh, in that once we came out withour understanding with our fundamentals, uh, we started the conversation withphysics and and math around why this is a good pairing a solution. Uh, the thenext stages of discussions actually happen quite rapidly and quite fast. Andthe solar industry mm-hmm. <affirmative>, uh, the colleagues that we workwith, uh, have rallied around it. Uh, it is interesting though, if you lookthrough the social media platforms, um, you see a lot more support of thisconcept on Twitter versus LinkedIn. So I think that the cultural, uh, of thesetwo platforms are quite different and it, and it has people reactingdifferently to news. But I'll say this again from our data point, uh, we did aprecede round, uh, to start up this company and we raised all that money inreally small check sizes from our angel investors, uh, that were all primarilyour allies in the solar industry. So the folks that actually trusted us andgave us funding to go ahead with optimize all came from solar, and they want tosee this mission succeed.
Logan Chipkin (00:26:31):
Interesting. So I'm curious again onthat note, uh, and, you know, tell me if this is a too much information typequestion, but, um, when, when you kind of explain to potential investors, Hey,Bitcoin mining can, you know, subsidize our business model and bolster thesolar, um, the solar ecosystem, do they care per se that it's bitcoin mining?Or do they care more that, okay, I'm sold Bitcoin mining can help, but I don'treally care about Bitcoin as a whole, if that makes sense?
Ali Chehrehsaz (00:27:04):
Uh, there, there are some of thoseconversations for sure. I mean, the Bitcoin mining, I would say, um, has a riskprofile and different capital projects, which, you know, what Bitcoin miningactually is, uh, attracts different, different, uh, appetite on, on the riskside, on the capital side, um, how we've gone about it is how we explain themission of our company. The tool that we have created is we are utilizingmining, as I mentioned earlier, as the, the tip of the spear as the first ondemand compute load mm-hmm. <affirmative> that is actually going to provethe ground and build a case for a whole host of other on-demand compute votesthat are to come mm-hmm. <affirmative>, and we will enable it. And oncethey see the bigger picture, once they see the journey ahead and how muchbigger this could get, um, they understand the really amazing job that bitcoinmining and bitcoin miners are serving, which is proving this thesis and showingthe opportunity for co-locating solar storage and mining in the future, otherdata center loads that really could help grow more solar and bring that to ourgrids.
Logan Chipkin (00:28:20):
Yeah, it's very interesting. It's,uh, it's something I think about, um, kind of Trojan horsing, the, the broaderBitcoin thesis as it were by introducing Bitcoin and or bitcoin mining in amore instrumental way first. So it sounds like you've had a lot of success, um,kind of just explaining Bitcoin mining as an, as an instrument towards someother end, namely the, uh, you know, bolstering solar and then maybe laterpeople go down their own bitcoin rabbit hole. So I don't have a question there.I just wanted to comment, I I find that, um, strategy interesting.
Ali Chehrehsaz (00:28:51):
Yeah, you're, uh, you're exactlyright. Uh, I mean, Trojan horsing is one way to say it. I would say Bitcoin iscatalyzing this revolution. Um, you know, uh, we are very transparent, very,uh, open about how we are creating this value for solar. And really theconversation is about, you know, we are using Bitcoin mining as a utility morethan really anything else to create bigger and more profitable solar powerplants. And when you look at the fundamentals and you look at the math, you seethat, um, yes, some of the power that is generated by solar is going towardsmining, but by and large, the power is going to the grid first, and only thestranded and surplus amounts are being utilized for mining. So mining isactually doing a great job of cleaning up and enabling solar to get a biggerfooting in the energy transition conversation.
Logan Chipkin (00:29:50):
Yeah, fair enough. I didn't meananything, uh, negative by the term Trojan horsing, you know, that's just a, ametaphor as it was
Kent Halliburton (00:29:59):
Ali. I, I'm curious to know actually,and, and then we should probably, uh, take some questions here from theaudience too. What do you think, um, Logan, um, but I'm, I'm curious to know,you know, in the Bay Area, it's certainly a different crowd than I think someof the other, um, guests that we've had on and where they come from in the usuh, different parts of the world. And I'm always curious to know, um, people'sorange pilling strategies and what, what tends to work the best with the folksthat you're surrounded by? I know you touched on it briefly, but um, maybe youcould expand on it a little bit better. What are you seeing in the barrier atBay Area and what are some of the, the things that keep people, um, from goingfurther on their journey with Bitcoin
Ali Chehrehsaz (00:30:51):
<laugh>? Yeah, that's a, uh,that's a good one. And, uh, you know, I'm a, I'm quite simple in my approach inthat I can really only talk about things that I know about. Um, there's aconversation to be had about Bitcoin and, um, talking about the socioeconomicaspects of it and impact of it to the world as the orange peeling strategy, uh,which I have that we have those conversations. Uh, and at some point it doesresonate with people. What I've seen have the most impact is, you know,sticking to my own, um, work, which is I tell people the story of how I gotinto Bitcoin and how it changed my view of what it is and how it can beutilized. And, you know, focusing on Bay Area, since I was your question, andthis is where I live, uh, the geography I love and the community I'm, I'minvolved in, uh, I, I start the story by telling them my background in solarand what I'm here to do, uh, what my mission is, how I saw utilizing mining asan enabler of more solar as, uh, an opportunity to go and fight against thisvalue deflation problem that is happening.
And it's very broadly seen here.Again, talking about Bay Area, uh, we've had a net energy metering tariff forsolar for more than a decade. That tariff, as we see, uh, has been revised andhas been dwindling in its value of export electricity as more and more solarhas come online, and the utilities and, uh, public utilities commission haveworked in concert to, uh, limit those export values. And just recently inCalifornia, we had the third revision to net energy meter in tariff, and thevalue of solar exports to the grid has dropped by about 75%. And what it usedto be, that is solar value deflation. It is happening in, you know, in broaddaylight. People know about it, and we talk about the physics of solar. Itgenerates power only when the sun is up. So we have to do something with thatelectricity.
And in some cases, you might be ableto do load shifting, bringing on other, on-demand loads like ev charging tocreate value. That's great. In some other cases, like in the middle of adesert, when you have a big solar plant and you're being curtailed by the gridoperator, there is no other use ca use case for that electricity. Bitcoinmining can go to that location and pick up that wasted electricity, helpdeliver extra value for that project owner operator fulfill its mission while helpingsolar remain competitive. When I tell that story and people understand wherethis is coming from and how this is actually helping bring more clean energy tothe grid positioning solar to be a reliable source of electricity for decadesto come, I have yet to see any pushback on, oh, Ali, you should not be doingthis. This makes no sense. Everybody signs on they get it, and that's the, youknow, that, that that helps us continue with our mission because the story isnot that hard to explain.
Logan Chipkin (00:34:13):
That's great to hear. Uh, I agree.The story is not that hard to explain. Um, but I, I think in general, you know,whenever there's an innovation, um, you, you'll always have some section ofhumanity kind of resisting just because it's new. Um, but that's great that,that, um, you're making a lot of progress. Um, you know, we talked about, uh,on a several Twitter spaces, uh, and this is thanks to in large part, Troycrosses in the audience. Hey, Troy. Uh, that 2022 was really the year of the,uh, pro-energy, pro environment, um, you know, pro renewables, uh, bitcoincrowd really coming to the fore. Um, and we think that's really a great thing,and that'll only continue. Um, I wanted to say before I, um, ask anotherquestion that if anyone in the audience has a question or a comment, uh, for Alior for Kent or for me about Bitcoin, bitcoin mining, solar, the intersectionbetween any of them, you're more than welcome to come on stage and, uh, if youhave a comment or question, we're more than happy to hear it. Um, Ali, so I'mjust curious, uh, what innovations on the horizon are you most excited aboutwith respect to, uh, batteries and or solar and or their intersection withBitcoin mining?
Ali Chehrehsaz (00:35:19):
Yeah, it's a good one, Logan. Um, theone thing that we are eyeing and having conversations with, uh, equipmentproviders is, um, evaluating more opportunities on DC coupling solar batteriesand bitcoin mining together. So the, the current integration that, uh, ispredominantly available out there and OEMs, the original equipmentmanufacturers have built devices for is to ac couple solar inverters withbatteries. And now we are adding bitcoin mining on the same AC switch bus orswitch gear. There is a big opportunity to be had if we were to couple theinverter or the battery that is deployed to the side on the DC side of thesolar inverters, primarily to be able to pick up any clipped power that isgenerated by these solar plants. So just to, uh, maybe pick some simple numbersby a large, a large scale solar power plant, um, has more DC capacity as insolar panels, then they install AC capacity on the inverter.
So the power that goes to the grid,and this trend is getting bigger and bigger. It used to be that we would designsolar plants on a one-to-one ratio of DC to ac, but as solar panels gotcheaper, we are able to build more DC capacity and, and fix or, or minimize theAC capacity of what we extend to the grid. And because of that, you end uphaving 10, 20, 30, in some cases now, 40% capacity of solar getting clippedbehind the inverter. On the DC side, if we were able to pick up this connectionbetween, uh, solar DC batteries that are DC charged and DC discharge to Bitcoinminers or some combination thereof, we would be able to tap into a whole other,uh, amount of stranded solar power that today it will go completely wasted. Butthrough this integration, if you're able to make it happen cost effectively inthe future, we'll be able to pick up a lot more power. So that's one area we'reeyeing and evaluating. See, you know, who can come up and pull all these piecestogether? Uh, we've done math around it, which is easy to do, but doing theactual electrical integration and design and planning is the hard part that,uh, we're hoping the industry comes along with it.
Kent Halliburton (00:37:56):
Ali, I've got a, I've gotta follow upon that a little bit. When I, uh, first got into solar, there still existed amovement that I think is fairly well died out. Um, and maybe actually there's,there's starting to be a resurgence with what you're saying, but there was amovement at that point in time where, where folks were, um, able to purchase,you know, for, for home solar systems, all DC based products to avoid the entireinterchange of, uh, electricity to AC and then back to devices that wereultimately gonna run off of dc. And so what you're describing there from a gridperspective, if I understand it, is basically the solar panels, uh, generatethe electricity. There's no loss of efficiency with changing it to ac it wouldbe charging the batteries directly and then the, the mining rigs would berunning directly off those batteries. So no, no change of energy means no lossmeans you've got more power ultimately, uh, to drive mining rigs, but you wouldstill need to have some sort of buffer with that arrangement because you're notgonna get consistent power due to the variability of the sun itself. Am Iunderstanding correctly? And, and if so, if you're just completely DC coupledin that way, how do you actually deal with the variability that comes fromsolar on a DC coupled system?
Ali Chehrehsaz (00:39:20):
So the DC coupling is in addition to,uh, the battery having an opportunity to also connect to the grid and get ACpower. So there are battery providers out there. I've seen specs withWorkzilla, for example, where you can charge DC but also get AC power to thegrid. So you do get that connection to the grid where you can enable any andall excess solar to go to the grid or buy power from the grid. Um, but this wayyou get to pick up all the clipped DC power on the solar side. And you'reright, uh, Kent, the early days of solar when panels were very expensive, uh,DC coupling was one of the innovations, but we ended up, and by we, I mean thesolar industry in general, um, financially engineered away from that problem asmanufacturing picked up and more solar panels got produced, uh, and the cost ofsolar panels went from what used to be $10 a watt to now 30 25 cents a watt.Uh, it became a lot easier to just overbuild on the DC side because panels area lot cheaper than to solve this DC clipped power. But now that we've donethat, uh, we are left with a lot of stranded electricity, which right now justgoes wasted quietly. Like no one talks about how much, you know, DC clipped poweris wasted on solar installations, but with bitcoin mining, we can now go pickthat up and, uh, even deliver more value to these, uh, projects.
Kent Halliburton (00:40:58):
Yeah, I'd like to talk with you moreabout that offline just to better understand those dynamics, but I'm afraid I'dbore the audience getting too electrical engineering focused. So I won't gothere.
Ali Chehrehsaz (00:41:08):
No, let's talk, this is, uh, this isthe stuff we live for.
Logan Chipkin (00:41:13):
Yeah. Well, sorry, go ahead. Uh,yeah, so, well, I was just gonna, you know, I'm wondering basically the, um, assolar and bitcoin mining continue to kind of collaborate in this way, uh, Ali,is there any sort of standardization that you're seeing evolve between theseindustries in, in other words like, are bitcoin miners beginning to and expecta call from solar producers and basically ver are the transaction costs betweenthe two industries going down over time, if that makes sense? It's
Ali Chehrehsaz (00:41:50):
A really good question. Um, I can'tsay I've seen any data points on that, um, but it makes a lot of sense. I mean,I think one clear integration that, uh, should happen, and I would be surprisedif we didn't hear about a stealth project by a battery manufacturer, would beto couple mining and batteries together in one clean package and deliver thatto solar projects, really the function of, of Bitcoin. And I understand therewas like a, a trend a while back that, you know, people were trying to say,bitcoin's not a battery, which has all kinds of flaws in it, but thefundamental performance of it in terms of being a on demand resource, flexible,um, it sort of operates that way, right? The, in a, in a one way charging, uh,scenario, uh, you know, batteries and Bitcoin miners consume electricity thesame way, uh, except that batteries have a fixed storage capacity, and once youreach a hundred percent state of charge, that's it. Whereas mining is sort oflike this endless pit that you can just funnel and a lot more electricitythrough it and, and let that run as, as long as you want it to run. Um, sothere is similarities there that would help enable, I think, integration ofthese two technologies, uh, that'd be very excited to see.
Logan Chipkin (00:43:22):
Yeah, agreed. Um, you know, I think,uh, as the kind of economics of solar and, uh, bitcoin mining become more andmore integrated, we'll see them become more integrated in business practices aswell. Um, but I see we have a question from, uh, ITP mining misfit. Uh, what'son your mind?
Speaker 5 (00:43:40):
Uh, I jumped into this thing, uh, alittle bit late, but you guys ironically are talking about a topic that I'vebeen discussing for like the last three days, uh, coupling the, the batterieswith solar power. And I wanted to, uh, to ask at what size are, at what sizebattery are you currently seeing this, uh, this iteration deployed? Um, cuzlike we've, I'm, I'm considering the same thing, uh, for a small kind of, youknow, micro deployment and looking at the, the capital expense for the batteryand just thinking something like even a hundred kw, uh, you know, to be put onlike a four by four, uh, you know, uh, box, you know, that's housing like 24 or30 miners, uh, to front run the interconnection, you know, between, uh, betweenlike a community solar farm or like a, you know, a small microgrid setup, uh,before they can actually start sending that, you know, that energy to the grid.So you're talking about a project that would be in continuance alongside oncethey get connected to the interconnection, which is fantastic, but at what sizeare you seeing that being able to be deployed? Like is this something that, youknow, you're at a half a meg, uh, to start with, or do you think that that'scapable of being done in smaller capacities? Thanks.
Ali Chehrehsaz (00:45:11):
Oh, thanks for the question. Um, I'llanswer that by saying it depends, and I'll give you sort of the bookends ofsome of the users of our software and what sort of projects they're modeling.Uh, on the smallest end of the projects that are being simulated unoptimized,we are seeing 10 megawatt solar with the option to go to 20 megawatt, uh, witha battery storage device that has, it's 1.9 megawatt four hour duration. Um, sothat gives you somewhere just under eight, eight megawatt hours of storage. Andthat project is paired with, uh, somewhere around 2,400, uh, J Pros. Uh, it isa grid connected project, and on the biggest scale project that we, um, have onour platform, it's a, um, a land opportunity to build as much as 270 megawattsof solar. Uh, but the great connection is only good for 150 megawatts.
Uh, that project is paired, uh, or atleast the interconnection is approved to be paired with a 70 megawatt two hourbattery. So they're going one for one with the interconnection. Um, and themining operation there that's being envisioned is about 20 megawatts. Um, Iforget how many j pros or what devices they're using there, but that's thegeneral sizing and capacity. And this takes me back to the, the initial way Ianswered the question, which is it depends, um, every interconnection, every,uh, power cost structure, uh, really drives the different fundamental aroundwhat is the most optimal size of solar battery bitcoin mining and how tointerplay that with your grid connection, whether or not you are buying powerfrom the grid, and also selling power to some offtaker on the grid from yoursolar plant. So these fundamentals require an iterative methodology runningmultiple scenarios to figure out what is the optimal size of these assets soyou can make the most, um, economic decision. Uh, and for our platform, we arestarting with the larger scale solar projects. Um, so five megawatt and beyondis, is sort of our, our starting point. Um, mostly because of the, the capitalintensive nature of these projects and, uh, where we are seeing the best usecases for these deployments, which is grid connected remote areas with lots ofsolar, lots of land, figuring out how to make the most economic decision.
Speaker 5 (00:47:55):
Thank you very much. I appreciatethat.
Logan Chipkin (00:48:01):
Um, thanks for your question. Ifanyone else has a question, feel free to raise your hand. Um, in the meantime,I'm curious, Ali, and you, you might not know the answer, but um, it soundslike the solar industry is very receptive to Bitcoin mining. I'm wondering, uh,does the, do wind producers, are they as sympathetic to Bitcoin mining? Uh, ornot as much?
Ali Chehrehsaz (00:48:21):
That's a really good question, andone that comes up in, uh, a lot of our, um, conversations primarily withinvestors. Um, again, I go back to my knitting. I know solar, I know the solarindustry. All of my contacts and friends are in this industry. We interfacewith wind folks. Um, I know of a few wind projects that, uh, have gone merchantand they onboarded, um, Bitcoin minor to co-locate with them. Uh, I would sayfundamentally from a physics and finance perspective, uh, the two are relatedand, uh, I would say solar and wind are fellow pilgrims in that journey. Um, Ihave not had a lot of conversations around wind or wanting to, uh, explorethat, that area yet. Um, our platform really, the intelligence that we havestarts with solar and, uh, you know, we do that probabilistic forecasting, theP 50 to P 90 range of solar at any location. That's what we know best. Ummm-hmm. <affirmative>, I think it's got a long potential. So we've stayedvery focused on that, but I think somebody who is out there understands whenshould be very much doing a similar play here and evaluating theseopportunities.
Logan Chipkin (00:49:38):
Yeah, for sure. Um, I mean, I wonderif, I mean, from my understanding, the logic and the economics of solar andwind, um, I wouldn't think would be different with respect to how each couldbenefit, but from bitcoin mining, but maybe I'm missing something, maybe likefrom the physics side. Uh, I
Ali Chehrehsaz (00:49:56):
Don't know. No, I think you're right.It's, it is very similar. Um, you know, the other angle of it is the potentialfor deployment of solar is much bigger and, and broader than wind. You can putsolar anywhere from middle of a desert to someone's rooftop. Um, today miningmakes more sense on big utility scale deployments, but 10 years down the line,you know, mining ASIC chips are cheaper, they're integrated into storage, solarpanel prices are, or costs are much lower. It could be possible that all thisstuff gets integrated to every household as well. Right. Um, there is already atrend about making every house a little mini virtual power plant, right? Solarbattery ev charging. It's not farfetched to think about having a Bitcoin minorpaired there, uh, as a load balancer, as a buyer of power when you are exportingpower to the grid and there's no other use case for it. Uh, this stuff comesin. So we, we see a much longer tail of solar deployment globally, uh, than forwind as well. So maybe that's one reason why it hasn't been as much looked atby others. But yeah, the math and physics, um, at least at the large scaleshould be the same.
Logan Chipkin (00:51:11):
Mm-hmm. <affirmative> No,that's an interesting point. I mean, yeah, like you said, I, I hear a lot andread a lot about, um, yeah, like small scale solar projects on houses andthings like that. And you could easily imagine that being coupled to Bitcoinminers. I don't hear about small scale wind operations that, that strikes meintuitively as not feasible at the moment, but may, maybe I'm wrong. I, I don'tknow. I I can't think of, um, like a small scale wind generator on someone'shouse, but Kent, maybe I'm missing something.
Kent Halliburton (00:51:38):
No, Logan, you're, you're not off. Ican actually speak to that. Cause it used to come up, uh, when, uh, I was doingcons consultations for a lot of homeowners. And, and the fundamental problem isthe rule of thumb for wind is you need about a 200 diameter radius ofunobstructed, um, capacity for your wind turbine. And very few residentialowners even out in the countryside, have that because of trees. So it becomessomething that's quite infeasible on a residential or, uh, homeowner basis.
Logan Chipkin (00:52:14):
Ah, very interesting. Um, yeah, thisis cool stuff. I'm like, I'm geeking out on these things. Um, I'm coming upwith all these, uh, article ideas, but anyway, okay. So that's actually a, asignificant difference, Ali. I, I think, uh, even though the intermittent andthe intermittency and the economics of solar and wind are similar in a lot ofways, at least now technologically, uh, solar can scale on smaller solar canoperate with Bitcoin on smaller scales than wind can at this moment. So, um, itseems like, uh, your industry is at a better position to take advantage ofBitcoin mining perhaps, than wind.
Ali Chehrehsaz (00:52:50):
Uh, I think so as well. And again,like I said at the beginning of the call, I think this is an industry that hasmany, many decades to go. I hope to spend the rest of my career on it. Uh,cause yeah, the, the tail of solar is still long and, uh, applicationsopportunities are quite abundant.
Kent Halliburton (00:53:08):
Yeah. Can I just chime in on and add,uh, a couple of data points that I'd love to make mention of when people sortof lump solar into the rest of renewables? I, I like to, uh, to point out, andI I'm saying this for the better for the audience, Allie, I'm certain thoseknows this inside and out, but at the end of the day there, solar isfundamentally unique because it is the only solid state energy productiveproduct production device that we know of. Meaning you can produce electricitywithout moving anything, and there's no other way to create electricity in thatfashion. And that has a lot of very interesting applications as a result andthings that will continue to innovate and come up with. So I agree with Elliethat in the long run, um, there's going to continue to be a lot of applicationfor solar.
And I suspect with the partnershipwith Bitcoin mining, we've really only scratched the surface, especially, youknow, just seeing Ali with, with your project and what you're doing, um, tohelp, uh, shunt the energy flows to where it makes the most impact or createsthe most value. I mean, that to me seems like a fundamental piece ofinfrastructure that we've gotta develop that then is going to be built off ofin other interesting ways as the, the grid increasingly becomes more complex.So I, um, joined Bitcoin mining specifically and left my career in solar, uh,because I felt that Bitcoin mining was actually going to, uh, usher in, uh, anexplosion in on the solar side in a way that is very hard to understand or evenpredict at this point.
Ali Chehrehsaz (00:54:54):
Yeah, Ken, you're exactly right. Imean, the, um, what, um, solar can do enabled with Bitcoin is, I think we are,we're still beginning scratch the surface. And to your point, the fact that youcan put solar anywhere, um, the sun shines everywhere. Um, and it's a, it's atechnology to your point, that produces power without moving anything. We'renot moving steam, we're not moving a blade. Uh, we're not oscillating anythingdrastically to create that power really does make it a, uh, unique energygeneration opportunity. And, uh, I mean, we have like this one, this visionwhere if you really think about the fact that we get solar power 24 7 a daysomewhere on the planet, right? The sun shines, you know, somewhere on theplanet at any given hour of the day, right? It's the notion that it's fiveo'clock happy hour sometimes somewhere.
Well, it's peak production timesomewhere, somewhere, somewhere on the planet. And you can, with that, you canimagine a, a deployment where if you were to pull together a globally connectednetwork of Bitcoin miners that are powered by the sun or powered by solar inevery geography in every time zone where feasible, you could start to actuallyactually build a Bitcoin mining network that's continuously powered. The hashrate is produced by the sun, and all you have to do is just connect and, andorchestrate the hash rate output of these plants from all these locations.Like, that's one of the visions that we have been thinking about and we want tohelp enable. And it's, it's just one of those ideas that has captured our imaginationwhere it shows, you know, if you actually think about it, it's not thatfarfetched to connect all these pieces together and run a mining pool or aBitcoin network event that's stable, that's reliable. It's pulling power fromsolar 24 7 a day, 24 7 basis, uh, year round. So we're, we're still justgetting started. I think, uh, folks like you who have had the background andthe energy and have seen the Bitcoin operation, uh, potential Kent or, uh, youknow, are are are leading this charge forward, and I think, uh, I think we'regonna win.
Kent Halliburton (00:57:32):
Yeah, I couldn't agree more. In fact,one of the most promising ideas that I came across on the, you know, big thinkbig and dream big scale when I was in the solar industry, I'm not sure if it'sstill talked about today, but I wonder if there is a way that Bitcoin miningcould help enable it. But one of the, the most fascinating ideas I came acrosswas the idea of a massive DC based superconductor that wrapped around, um, kindof the sunbelt area of the earth and solar that way could be generated anywhere,but sort of equalized out as it wrapped around, um, the planet. Because, youknow, the sun is always shining on one part, uh, so it could be equallydistributed anyway. It's a pretty radical idea, but I, I think those, uh, thosebig ideas are something that are going to be more enabled through bitcoinmining.
Ali Chehrehsaz (00:58:27):
I think so too. I think thedistributed nature of Bitcoin mining along with the distributed nature ofsolar, like as a, as a, as an equipment deployment, I'm talking is how we setup these two industries to win, right? They're paired very well together,right? Like solar is talented as this distributed energy resource. Bitcoinmining is this on demand distributed energy buyer, like the two can together goanywhere on the planet and set up a mini power plant. And the fact that now wecan connect the, one of the financial metrics of these power plants through theBitcoin network together and make this global network of, of the buyer ofelectricity, which is Bitcoin, all of a sudden you've taken the geographicrisks of imposed to a solar project in a new location away and hedged againstit with this global network. And again, this, this global network only has toutilize internet to connect to itself within itself, not physically beconnected, which is really the beauty of this innovation, this opportunity.
Kent Halliburton (00:59:38):
That's right. Yeah. They're bothdisruptive, decentralized technologies and kind of in some ways flip sides ofthe same coin because on one side, uh, the solar panels generate electricity,and on the other side, the mining rigs harness it to produce Bitcoin. Yeah. Um,but I think this, uh, this cambri explosion has, is still so, so in itsinfancy. I'm curious to see where we'll be in five years, uh, and, uh, sharebeer with you and talk, talk it over more because I think, uh, you guys are onthe, the point of the spear right now. And, and that's just gonna grow.
Ali Chehrehsaz (01:00:16):
I, uh, I, I believe so as well. And Ithink all of us working together, uh, we are at the start of something big. Ithink you're exactly right. Um, and you know, like going back to the earlypoint of, um, you know, we started this conversation about changing people'smind in the solar industry about Bitcoin. I think we also have a lot of work todo on changing Bitcoin miners perspective about using solar. I think that's,that's another side of this argument or this challenge we have. Um, cause there'sstill a lot of thought out there about pairing my Bitcoin mining operation witha solar plant that's intermittent. And I think we also have work to do there.We are seeing Bitcoin miners utilize solar, which is great. Um, there aredeployments happening, you know, grid listed a deployment recently, uh, ourfriends over at, um, Cypress Creek did, uh, did a deployment. So these thingsare coming and are happening, which I think is helping showcase that thisopportunity is real and Bitcoiners should pay attention to it. And, uh, yeah,hopefully we'll bring all the parties together, uh, along this journey.
Logan Chipkin (01:01:28):
Yes, indeed. Uh, it sounds like the,the final theme is, uh, let's all get to work at the start of the, the newyear. So I wholeheartedly agree with that. Um, with that said, Ali, I wannathank you very much for your time. This is, uh, this has been a lot of fun, um,to, I always enjoy talking about the nexus between, uh, renewable energysources and bitcoin mining. And I know Kent feels the same way. You know, asKent was saying, this is, this is really his bread and butter. Uh, so, youknow, it's been a pleasure. Um, thank you, Kent. Thank you Ali, for joining.Once again, uh, reminder that the SaaS mining Twitter space is every week at3:30 PM next week. It's actually gonna be at 10:00 AM to accommodate our guest,uh, Anita Posh, founder of Bitcoin for Fairness. Uh, that's gonna be a lot offun talking to her, talking to Anita. Uh, so with that, I wanna thank everyoneand I hope you have a great rest of your Thursday. Take care everyone. Thankyou, Brian. Thanks
Ali Chehrehsaz (01:02:15):
Ali. Thanks Logan. Thanks Ken. Take
Logan Chipkin (01:02:17):
Care. Our pleasure.
Kent Halliburton (01:02:19):
Yeah, thank you Logan. Thanks Ellie.
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