Working directly with energy suppliers can cut mining costs

For bitcoin miners, electricity costs can be super high, but securing a direct contract with power suppliers could help save some coins on expenses. Different suppliers have different rates, and I think a fixed rate tariff is the way to go. It allows you to pay a consistent amount over a set time, no matter how energy prices swing. So, if you can chat with a company and lock in a price based on expected kwh usage, that's way better than dealing with middlemen who just jack up your bills and mess with your budget. I came across this UK site that helps you check electricity prices and find cheaper providers to team up with. They list options like Scottish Power, which has a three-year plan at 23.9p per kwh (that’s the unit price). But beware, there’s a downside if you need to move before the contract ends, you might get hit with termination fees. In the end, this approach could free miners from the unpredictability of their energy bills and help build a solid relationship with the supplier, plus negotiate better pricing.

23.9p per Kwh is $0.32 per kilowatt. Do you realize that with such tariffs, mining will be unprofitable? You need to look for a tariff 8 times cheaper for mining.

What kind of middlemen are you referring to here? A staff of an electric company or something similar? I'm not sure how it is in other countries, but in my country, every custom electricity request goes directly to the national electricity power supplier. If you need industrial-level electricity, there's no other choice unless you want to build your own renewable electricity power station. I believe industrial miners already do this anyway. I doubt they'd pay extra unless there's an extraordinary circumstance. I'm not sure you can do the same if you're a small miner though. CMIIW.

The middlemen here are the branches of power companies that provide consumers with necessities; meter, bill, and payment process—isn't it true that they make extra profits? For example, In my locality most people pay in cash, pos, and transfer to branches, then the staffs relay it to the headquarter. I do not think the payment is done without any intermediary between customers and the company. Hence, miners would be better off discussing contract with the head offices, that supervises the energy, and design consumption rate to help cut cost considering the amount of energy the mining rigs would consume.

I think the volume of electricity consumption plays an important role here. If your company can build a data centre for 50 Megawatts, then you can negotiate for cheap electricity, but if you have consumption of several hundred kilowatts per hour, then you will pay the price of the commercial tariff.

Hmm, I'm not sure if those exist in my area. There are definitely shady employees from the company who offer some backdoor services such as supplying fake meters to reduce monthly bills, but there are no branches or sub-contractors who charge extra fees for electricity installation or monthly payments. I guess this is because the electricity supply is not privatized, so there's no competition from other companies.

You dont want to get into those shady deals and suffer the consequences when you get caught. Like @FP91G said, if you are consuming a big deal of power you can cut a deal with the electricity company. But considering the fact that optimum cool temperature and cheap electricity is not common in the developing world, these chances are also limited or non-existent. Mining is a cutthroat business, you have to get all these things in your favor or else you are playing the losing game.

I agree with @joniboini, it's nothing new and i also believe big miner already got such deal either by pay in advance or negotiate with the company directly. In fact, some miner even have great deal/contract with government where they got paid for not using electricity on certain condition[1]. [1] https://fortune.com/2022/07/12/texas-bitcoin-miners-paid-shut-down-power-grid-electricity-blackout-heat/

You may get a good deal from energy providers in case of floods or when electricity consumption is low in your country, but you may not get a good deal in case of grid load, so if you find a cheap deal that lasts for several months or years, that is best. Otherwise, seasonal mining and the ability to move mining equipment every few months may be better than incurring high electricity bills. This will vary depending on the country, the size of the investment and the type of deals that can be made.

The best method for miners to have a profitable mining is to travel. Don't stick with your country, move around and you'll find a great deal. For example, in Georgia, Electricity price is exclusively one of the cheapest for BitFury. They are paying 0.05$ per 1kw/h. I bet you can't find such a good deal in the UK, Germany, Canada, USA. They are the direct purchasers of electricity, so OP as you said, that will help everyone to save on electricity but you have to be a very big miner to get such a good deal. If you are that big miner, then move your miners in other countries and find a better deal, that's my advice to everyone. As far as I know, Russia and Kazakhstan also have good electricity rates but to be honest, if you want to get such a good deal, you have to have someone in the government. It's a little bit dark area.

There's a power shortage in Georgia right nowм https://www.cdu.ru/tek_russia/articles/6/1122/  (RU) Its government has plans to provide the country with its own electricity by 2030. https://sputnik-georgia.ru/20240910/gruziya-k-2030-godu-dolzhna-polnostyu-obespechivat-sebya-elektroenergiey--premer-289829576.html  (RU)

Overall, don't get me wrong but Russian resources are not reliable resources to read about Georgia. What do you mean in shortage? The fact that we import some electricity? That's not a problem, if there is a need, we will import as much as we want but I'll tell you what's the problem. In reality, there shouldn't be any shortage but it's created artificially for Bitcoin and crypto mining businesses. We provide Abkhazia with free electricity which they use for crypto mining (very stupid from us), we provide free electricity to mountainous areas and people who live there use that free electricity to mine crypto. Then there is BitFury which owns two very large mining data centres and uses a big portion of the total electricity. If anyone wants to start a mining business, this country is ideal. No shortage is going to affect them in the mining business.

I do not claim that this article is 100% true, but the author of the article quotes Georgian Prime Minister Irakli Kobakhidze as saying that there is a shortage of electricity. This article goaways that currently mining in Russia consumes over 2.5 GW, while in the US it consumes over 7 GW. https://1prime.ru/20241002/mayning-851897908.html If you read this thread, you will probably agree with the data for Russia https://bitcointalk.org/index.php?topic=5464687.0 Show please Georgian sources on power consumption by Georgian miners.

Have you heard of Octopus Agile? Your prices change every half an hour and are lower on average than the 0.23p/kWh. The other day they actually paid me to use electricity due to the prices being negative (thanks to the wind turbines generating excess). I have a GPU rig that fires up and pulls just under 1kW of power when the prices drops below 0. It doesn't happen every day but you can bet when there's strong winds it'll drop. Even if it's at 8p/kWh, that's still significantly less than the standard/fixed rate tariffs. I just play the game.

Let's say you have been mining for 1 month, what is your average electricity cost? And if you are mining on very cheap or free electricity 3 days a month, the payback period of your equipment increases 10 times, which is very unprofitable.

It's hard to calculate since it varies so much. The worst period is between 4-7pm since it jumps up to 30p+. So those times are no goers. As for attempting to ROI, yeah you're right. It would take significantly longer, if not impossible if you only switched it on during negative periods. The weighted average, so what you use when it's cheap, is about 16-18p/kWh. On days where it's negative for hours, that average drops.

It's a smart solution to the challenge of power but the solution unfortunately may not applicable in every place because the direct contract with power supply company may even be more expensive than you trying to mine indirectly without their knowledge. In my country for instance we receive electricity from only one supplier, and it either you have a prepaid meter or you are given an estimated bill for direct supply. There are no competitors so whatever charge that you're asked to pay is what you will pay and charges on power these days is becoming ridiculous and choking to those who have business or companies where power is a must.

In some countries, the price of electricity is regulated or subsidized by the government, so power companies cannot set arbitrary prices. And in commercial activities, the price of electricity is already regulated by the contract between the consumer and the electricity supplier. In Russia, all electricity tariffs in each region for citizens are regulated by a regional government commission, and the electricity supplier cannot set different prices, even if it is not profitable for him.

Cheap power providers, then 23.9 pence per Kwh which means bankruptcy for any more out there. Also, that's a consumer comparison website, commercial tariffs are completely different. What happens when there is nobody with a surplus to sell you electricity?

That moment hasn't happened before. We import our electricity from Russia, which is one of the largest electricity producer, number 4 next to China, the US and India. We are a very small country as their neighbour. While I think that we won't have that problem, that's still a nice question. If there is nobody with a surplus to sell us electricity, then the rates will go up for average citizens, so we will be forced to use less power. Sadly, one Oligarch has taken over our country and as he has some % in BitFury and crypto mining business, he will do everything to keep their electricity rates as low as possible and will make us pay for it. The reality is sad.