Where Bitcoin's power needs meet volcanos

One probably wouldn’t think that El Salvador’s president, Nayib Bukele, would be particularly influential as regards the future of electric generation in the Pacific Northwest.

Surprisingly, he might.

Before Bukele took office, a currency experiment called Bitcoin Beach was underway in the El Salvadoran town of El Zonte. That experiment, which is ongoing, is aimed at demonstrating that it’s possible to use Bitcoin, or a Bitcoin derivative, as a day-to-day currency.

The Bitcoin Beach project has been somewhat successful. Bukele, inspired by it, is attempting to replicate the Bitcoin Beach experiment throughout El Salvador, so as to make El Salvador less dependent on the U.S. dollar. So far, the national experiment hasn’t been as successful as El Zonte’s local work. However, despite considerable naysaying by financial experts, it hasn’t failed yet either.

Whether El Salvador ultimately winds up using Bitcoin as its day-to-day currency or not, one element of Bukele’s Bitcoin project may have staying power, and could be relevant to Washington’s electric grid.

Bitcoin “mining” – the process via which the electronic money is managed – uses a lot of electric energy. Bukele intends to make it more sustainable, and to move some of the economic activity around Bitcoin mining to El Salvador, by developing geothermal power at some of El Salvador’s volcanos. He’s even promoted plans to raise funds for this by issuing “volcano bonds.”

Like El Salvador, we have volcanos. The Cascade volcanos, including Mount Baker, are promising sites for geothermal power exploration.

Geothermal power generation is based on the fact that volcanos contain hot rock. That heat can be used to boil water, to turn a steam turbine and generate electricity, 24 hours a day, every day. Volcanos don’t take days off. Geothermal plants generate energy when the sun isn’t up and the wind isn’t blowing. They are physically compact, nearly silent, very reliable and not dependent on weather. Geothermal electric generation has been in large-scale commercial use since the late 1950s.

However, geothermal power plants require very specific geologic conditions, and they are small by utility standards. They typically produce around 30 megawatts, which is enough to power tens of thousands of homes, but far less than the hundred, or even thousand, megawatt scale of traditional power plants.

Given Washington’s abundant, more easily developed, hydroelectric resources, there hasn’t been a significant historic incentive to try to develop the Cascade volcanos’ power generation potential. Even with today’s level of attention on renewable energy, it’s been hard for the geothermal industry to attract investment when there are bigger solar, wind, tide and battery projects afoot.

Some initial work on northwestern volcano power has been done. A few years ago, some exploratory wells were drilled. Results were promising, indicating the presence of adequate geothermal heat gradients, and workable water reservoirs (geothermal power plants require that it be possible to recirculate underground water through permeable, porous hot rock).

Geothermal technologies have recently improved. The petroleum engineering expertise required for fracking is relevant to geothermal exploration, and some work has been done on the use of lower-temperature water. The time is right for further exploration.

And money may be available. By talking up volcano bonds and tying them to Bitcoin, Bukele has raised the profile of geothermal power development. Geothermal is now exotic and cool and understood, instead of boring, small and “what?”