Gridless Turns Zambia’s Excess Hydropower into Bitcoin, Boosting Local Economy
LTB How a Shipping Container and Bitcoin Revitalized a Struggling African Hydro Project
In Zambia’s remote Ikelenge district, the Zengamina hydroelectric plant was on the brink of failure due to surplus electricity that the local community couldn’t fully utilize. Enter Gridless, a Nairobi-based Bitcoin mining startup, which turned the tide by deploying a mobile mining unit, housed in a shipping container, to convert the plant’s excess power into Bitcoin revenue. This innovative approach not only saved the struggling hydro project but also enhanced life for the surrounding community.
- Zengamina faced wasted power due to low local demand.
- Gridless converted surplus into Bitcoin revenue.
- Mining machines generate $5 daily, aiding plant income.
- Reduced tariffs and expanded electricity access.
- Scalability potential across Africa, with regulatory caveats.
Gridless’s mobile Bitcoin mining unit, ingeniously housed in a shipping container, became the hero Zengamina needed. By converting the plant’s excess power into Bitcoin, this unit has not only kept the lights on but also raked in about $5 per day per machine, contributing nearly a third of the plant’s total income. This financial boost has allowed Zengamina to lower electricity tariffs and extend power to more homes, transforming the lives of residents like Chipo, a local farmer who shared, “Before Gridless, we couldn’t afford to run our small businesses. Now, with cheaper electricity, we’re thriving.”
The impact of Gridless’s model reaches beyond Zambia. They’ve set up similar units at six hydro sites across Kenya, Malawi, and Zambia, tapping into Africa’s vast untapped hydropower potential, which the International Renewable Energy Agency (IRENA) estimates at over 300 gigawatts. This showcases how technologies that don’t rely on a central authority can drive economic growth in underdeveloped regions. Bitcoin mining, the process of using powerful computers to verify transactions and add them to the Bitcoin network, has become a lifeline for such projects.
However, there’s a flip side to this Bitcoin bonanza. The surge in mining operations could lead to competition for electricity with local users, especially if Bitcoin prices skyrocket. We’ve seen this scenario play out in places like Kazakhstan and parts of the United States, where mining activity has strained power grids. Without clear regulation or transparent agreements on power usage, what initially supports rural development could become a source of friction.
Janet Maingi, co-founder of Gridless, describes their approach as a “consumer-driven, adaptive energy model,” designed to begin with mining but ultimately transition toward long-term community electrification. In her words, “Gridless views itself as a transitional player. As household and commercial demand picks up, its role winds down.” This vision aligns with the philosophy of effective accelerationism (e/acc), which advocates for rapid technological advancement to drive societal progress, while also acknowledging the need for a responsible transition.
Gridless’s future plans include developing its own small-scale hydroelectric projects, integrating Bitcoin mining as an initial revenue stream. With Bitcoin currently trading near $88,000, miners are on the hunt for low-cost, regulation-light energy sources—a trend that could fuel Gridless’s expansion across Africa. Yet, the future isn’t set in stone. Zengamina Hydro has secured a large investment to expand to more villages and connect to the national grid, which could eventually make Bitcoin mining unprofitable at the site. This development highlights the dynamic nature of such projects and the need for adaptability.
The potential for scaling Gridless’s model across Africa is tantalizing, particularly in regions with similar energy challenges. Ethiopia’s Grand Renaissance Dam, for instance, has approved electricity sales to mining companies, offering a model for replication. However, it’s crucial to balance this optimism with the realities of regulatory frameworks and community benefits. The geopolitical risks associated with reliance on shared resources like the Nile River also come into play.
The environmental impact of Bitcoin mining is another critical aspect. Researchers at Cambridge University note a shift towards a more sustainable energy mix in Bitcoin mining, with setups like Zengamina representing a small but significant part of this trend. It’s a reminder that while Bitcoin can drive economic growth, it must do so in a way that’s sustainable and beneficial to the environment.
Key Takeaways and Questions
- What problem did the Zengamina hydroelectric plant face?
The Zengamina plant generated more electricity than the local community could use, leading to wasted power and financial difficulties.
- How did Gridless help the Zengamina plant?
Gridless deployed a mobile Bitcoin mining unit to convert the plant’s excess power into revenue, which helped lower electricity tariffs and expand coverage to more households.
- What is Gridless’s long-term vision for its model?
Gridless views its role as transitional, planning to phase out mining operations as local demand increases, ultimately transitioning to long-term community electrification.
- What potential risks are associated with Bitcoin mining in off-grid energy projects?
There is a risk that Bitcoin miners could compete with local users for electricity, especially if Bitcoin prices surge, potentially leading to disruptions similar to those seen in Kazakhstan and parts of the United States.
- Could the Gridless model be scaled across Africa?
Yes, the model has the potential to scale across Africa, particularly in regions with untapped hydropower potential and limited local demand, provided there are clear regulatory frameworks to ensure community benefits are prioritized.
This story exemplifies how Bitcoin and blockchain technology can disrupt the status quo, championing decentralization and freedom while also highlighting the challenges that come with it. It’s a reminder that the road to progress in the world of crypto is paved with both innovation and responsibility.
