Kenyan energy company KenGen has issued an appeal to bitcoin miners to move to the country and buy excess renewable energy capacity.
KenGen claims that 86% of its electricity comes from renewable sources, mostly from geothermal hotspots in the Great Rift Valley.
Local news outlet The Standard reported that KenGen has space at its new industrial park in Olkaria, next to its flagship geothermal power plant, that can be rented out to bitcoin miners.
Peketsa Mwangi, acting director of geothermal energy development at KenGen, said his company wants miners to call Kenya home:
“We will bring them in because we have space for them and the energy around them, which helps to ensure stability,” he said.
However, despite his enthusiasm, there have been no reports of miners wanting to travel to Kenya.
The Cambridge Bitcoin Electricity Consumption Index (CBECI) suggests that the East African country has no known bitcoin mining operations yet. Still, it seems ideal for miners due to an estimated 10,000 megawatts (MW) of geothermal energy potential.
According to Kenyan financial news outlet Capital FM, KenGen is currently operating at a peak generating capacity of 863 MW after installing another geothermal power plant in April.
KenGen can kill two birds with one stone by inviting miners to the country. First, a venture in Kenya can improve the environmental sustainability of mining, which has been the subject of intense scrutiny worldwide.
According to CBECI, the mining industry consumes 119.5 terawatt-hours (TWh) per year, more than the entire country in the Netherlands. Only 31 countries consume more energy.
Secondly, it may also stimulate demand for further development of the KenGen power system to increase overall supply and reduce costs. According to Statista, Kenya currently ranks 12th in the world for the cost of electricity, with one-kilowatt hour (kWh) costing about $0.22.
The high cost of electricity in the country may be related to the pace of its electrification.
According to the World Bank, by 2020, only about 70% of the population had access to a centralized network. Energy network tracker Energypedia also said the high cost of connecting to the grid in Kenya is a significant problem for its expansion at the moment.
The Kenyan government could also generate more revenue through miner fees and taxes. The government of Kazakhstan, for example, is poised to generate up to $1.5 billion in miner revenue over the next five years. However, it only made $1.5 million in the first quarter of 2022.
Kenya has seen an exceptionally high adoption rate of cryptocurrencies due to the volume of peer-to-peer transactions.
Since last year, the Central Bank of Kenya (CBK) has been exploring options for using a central bank digital currency (CBDC). In February, CBK stated lower fees and faster transfer speeds as benefits of using CBDC and requested public comment.