Bitcoin mining reaches 59.4% clean energy as hydropower tops gas

Hydropower has surpassed natural gas to become Bitcoin mining's largest energy source, with low-carbon sources now powering 59.4% of the network.

Bitcoin mining's annual electricity consumption rose 38% to 190 terawatt-hours, yet emissions grew just 20% as hydropower overtook natural gas as the top energy source, according to preliminary data from the Cambridge Centre for Alternative Finance.

"Low-carbon sources increased to 59.4% from 52.4%, with hydropower overtaking natural gas as the largest single source," Alexander Neumueller, a research associate at the Cambridge Digital Assets Programme, said at the Energy Investors Forum in Dallas. The findings are an advance look at the second edition of the Cambridge Digital Mining Industry Report, expected later in 2026.

The network consumed about 190 TWh on an annualized basis in December, up from 138 TWh in June 2024. Estimated emissions rose to about 48 million metric tons of CO2 equivalent from 40 million tons — a divergence that reflects a cleaner energy mix even as total power use surged. The survey, covering roughly half of global hashrate, showed hydropower displacing natural gas as miners in hydro-rich markets such as Ethiopia added capacity from the Grand Ethiopian Renaissance Dam.

The shift weakens one of the most durable arguments against Bitcoin's mainstream adoption. ESG-focused institutional investors have kept the asset at arm's length, and regulators in the US and EU have cited environmental costs to justify tighter scrutiny. A mining industry that can credibly claim nearly 60% low-carbon energy makes those arguments harder to sustain, potentially opening the door to broader institutional allocation and more favorable policy treatment.

Emissions Grow, But at a Slower Pace

The 38% jump in power consumption outpaced the 20% rise in emissions, a gap that Cambridge attributed to miners drawing a larger share of electricity from low-carbon sources. The findings complicate both sides of the debate over Bitcoin's environmental footprint: the network is consuming substantially more electricity, but each unit of power comes from a less carbon-intensive mix. Neumueller said the full report is expected later in 2026, with improved survey participation from the first edition.

Hydropower contracts also offer more stable pricing than natural gas, which is subject to geopolitical volatility and seasonal fluctuations. That stability matters for publicly traded miners such as Marathon Digital Holdings, Riot Platforms and CleanSpark, whose stock prices are heavily influenced by their energy cost structures.

Miners Eye AI, but Capital Remains a Hurdle

The Cambridge survey also examined whether miners are pivoting to artificial intelligence. Only about 10% of respondents said they had allocated some power to AI or accelerated-computing services, while more than 40% said they were exploring diversification. Capital expenditure was the largest obstacle, followed by a desire to maintain focus on mining.

"Intent to look into it is not commitment to deploy," Neumueller said, a distinction that matters for investors who have increasingly valued mining companies on their access to land and electricity rather than solely on bitcoin production. Converting a mining site for AI requires more sophisticated networking, cooling and reliability standards, along with substantially more capital — a gap that limits near-term deployment despite widespread industry interest.

This article is for informational purposes only and does not constitute investment advice.