Modeling Investment Decisions in Renewable Energy and Cryptocurrency Mining Under Uncertainty

Operations research has long contributed to addressing energy and environmental challenges through mathematical modeling and decision-support methods. In particular, numerous studies have examined investment planning, capacity expansion, and policy design for renewable energy systems under uncertainty. As efforts to achieve carbon neutrality intensify worldwide, the expansion of renewable energy has become a critical policy and investment priority. However, the inherent variability of renewable power generation and the substantial upfront investment costs continue to hinder investment decisions and limit the adoption of renewable energy. To address the economic challenges associated with renewable energy penetration, recent studies have explored the use of cryptocurrency mining as a means of monetizing surplus renewable electricity. This study contributes to this emerging research stream by developing a real options model that captures the interaction between renewable energy investment and cryptocurrency mining under uncertainty. The numerical results show that cryptocurrency mining increases the value of renewable energy investment and accelerates investment by lowering the investment threshold. Moreover, the equilibrium determination of mining capacity reduces the renewable energy investment threshold by approximately 40.5% compared with the benchmark in which mining capacity is specified exogenously.