The Green Side of Bitcoin (Part V)

The Oil-Rich Kingdom of Oman Plans to Use Bitcoin Mining to Become a Hydrogen Superpower – by Christoph Bergmann

Oman, situated at the south-eastern tip of the Arabian Peninsula, is still heavily dependent on oil exports. But the Gulf monarchy has plans to set itself up as an exporter of green hydrogen. Bitcoin mining comes in handy to help build infrastructure. That is why the government is supporting the industry with more than a billion dollars.

Sheikh Mansour bin Taleb bin Ali al-Hinai, the top public services regulator in the Kingdom of Oman, recently stated that his government is supporting private mining operations with more than $1.1 billion.

Among the investments is a $300-million farm being built by Abu Dhabi’s Phoeniex Group, a 150-megatwatt centre by Oman’s Green Data City, and a $370-million farm by Exahertz, another domestic startup. The investment in Bitcoin mining, explains Sheikh Mansour, “is in line with our goal of diversifying our economy and integrating modern technologies, while staying true to our commitment to ethical and sustainable practices.”

Thanks to Oman’s oil and gas resources, the extremely sparsely populated country has achieved remarkable prosperity in recent decades. But seeing this prosperity threatened by the trend to decarbonisation, it is already proactively turning to green hydrogen.

By 2030, it plans to have renewables provide at least one-third of its domestic electricity supply, and by 2040, oil’s share of economic output should fall below 10 per cent. To achieve this, Oman wants to build up a huge hydrogen industry, fed mainly by wind and solar power, and make the country a centre of a sustainable global energy supply.

Currently, the country has already invested 20 billion dollars in six green hydrogen projects. These projects consist of photovoltaic and wind farms, which together are expected to generate 15 or 25 gigawatts, which will then be converted into hydrogen. It will be either exported or used to power domestic steel mills.

Oman has more than enough sun and wind. Nevertheless, the project requires huge investments in infrastructure, including the electricity grid, which is currently designed for the country’s consumption of less than 10 gigawatts. It is estimated that investments of around 140 billion dollars will be needed. And this is where Bitcoin mining comes in.

The mining project, explains Jad Fredrick Kharma, the boss of Exahertz, is very much in line with Oman’s vision for 2040: forming a synergy of specialised hardware, extreme scaling and smart energy consumption to build a sustainable and robust infrastructure.

Exahertz, Kharma adds, is developing its mining farms in a modular way so that they support the power grid and avoid overloading. In addition, there are plans to use energy from the combustion of methane gas emitted during the extraction of oil and gas.

The resulting infrastructure will not stop at mining. Massive data centres for supercomputers and artificial intelligence are planned, as well as hydrogen plants. Mining can play the role of a door opener that makes the development of new energy sources profitable from the start.

Christoph Bergmann runs, Germany’s leading publication on cryptocurrencies. This article was originally published there in German and translated and edited by Aaron Koenig.

Here are the previous articles of this series:
The Green Side of Bitcoin (Part IV)
The Green Side of Bitcoin (Part III)
The Green Side of Bitcoin (Part II)
The Green Side of Bitcoin (Part I)