A free handbook on turning stranded energy into something sellable. Why energy has a location problem, what flaring and curtailment actually are, how compute gets paid to switch off, and the economics nobody puts in the pitch deck. No registration, no email required.

What this book is

Electricity is the only major commodity that must be consumed at the instant it is produced. That single fact creates enormous quantities of energy worth nothing — not cheap, nothing, sometimes less than nothing — and an entire industry built around buying it.

This handbook explains how that works, honestly, including why most projects pitched on “free energy” do not work. It is educational. It is not investment advice and makes no offer.

Chapter 1

Energy has a location problem

A barrel of oil can wait. A gold bar can sit in a vault for a century. A megawatt-hour must be used the moment it exists or it is gone.

Energy is therefore only worth something where and when someone wants it. Move it and you pay for pipelines or transmission. Store it and you pay for batteries or tankage. Where neither is economic, the energy is stranded — physically present, commercially worthless.

Stranded energy is not cheap energy. It is energy with no buyer, which is a different and much more interesting problem.

The insight behind this entire industry is simple: if you cannot move the energy to a buyer, move a buyer to the energy. Computation is the most portable large consumer of electricity ever built.

Chapter 2

Flaring — gas with nowhere to go

Oil wells produce natural gas alongside the oil. Where there is no pipeline, the operator burns it at the wellhead. The World Bank’s flaring tracker recorded 167 billion cubic metres flared in 2025, up from 151 bcm the year before.

That gas has negative value at the wellhead: it costs money to handle and earns nothing. A generator and a container of computers trucked onto the pad converts it into electricity and then into revenue, without a metre of pipeline.

There is an emissions argument too, and it is narrower than the marketing suggests. Enclosed engines combust methane far more completely than an open flare, with reported reductions of up to 63% in CO₂-equivalent versus flaring. That is a real improvement over burning it. It is not the same as being clean.

Chapter 3

Curtailment — power the grid cannot take

Wind and solar produce when conditions allow, not when demand asks. When generation exceeds what the grid can absorb or transmit, operators curtail — instruct generators to stop. The energy is simply not produced, and nobody is paid for it.

In some markets oversupply drives wholesale prices negative, meaning generators pay to keep running rather than shut down. An interruptible load sited next to that generation is the natural buyer: it takes power precisely when power is worth least.

Chapter 4

Getting paid to switch off

The third source is the least intuitive. Grids must build capacity for the worst hour of the year, and that capacity sits idle most of the time. A load that can disappear on command is worth real money to a system operator, because it substitutes for building more generation.

In August 2023 one Texas miner was paid $31.7 million in a single month — $24.2m in curtailment credits plus $7.4m through ERCOT’s demand response programme — to stop consuming during a heat wave.

Being switchable was worth more that month than the computation would have been. That is the business, stated plainly.

It is also contested. US lawmakers have opened investigations into whether these payments amount to ordinary ratepayers subsidising an industry with outsized demand. That is a legitimate argument about who pays for grid capacity, and it is unresolved.

Chapter 5

Where the money actually goes

Here is what the pitch decks leave out.

Power cost dominates everything

For mining, electricity is the overwhelming operating input. Small differences in cents per kilowatt-hour decide whether a site is profitable or not, which is why operators chase stranded energy in the first place. But cheap power is necessary and not sufficient.

“Free energy” is never free

• Capital comes first. Generators, containers, transformers, switchgear and machines are bought before a single kilowatt-hour is converted.
• Remote sites cost more to run. A wellhead in the middle of nowhere means logistics, staffing, maintenance and downtime that a warehouse on a city grid does not have.
• The energy source can end. Wells decline and are eventually shut in. Your site has a lifespan set by someone else’s reservoir.
• Hardware depreciates quickly. Mining equipment is superseded on a short cycle, and the residual value of older machines is poor.

You are long a volatile revenue and short a fixed cost

Revenue is denominated in an asset that moves violently. Power contracts, leases and debt service do not. In mining specifically, the block subsidy halves roughly every four years on a published schedule, so revenue per unit of computing power declines structurally unless price or fees rise to compensate.

A project that only works at a favourable price, with new hardware, on a well that never declines, is not a project. It is a spreadsheet.

Chapter 6

Mining and AI are not the same load

Both consume large amounts of power. Only one can be switched off.

The industry is converting mining capacity to AI because it pays better. The consequence is that the grid loses exactly the flexible load that justified the arrangement — the emergency brake gets removed. A site’s value as demand response lasts only as long as it stays switchable.

Chapter 7

How people lose money here

1. Believing cheap power alone makes a project. It is the entry ticket, not the business.
2. Ignoring the capital stack. Equipment, generators and installation are spent before revenue starts.
3. Underwriting on today’s revenue. Mining revenue per unit of hashrate falls structurally at each halving.
4. Assuming the energy source is permanent. Wells decline; curtailment shrinks as transmission gets built.
5. Counting demand-response income as certain. It is a policy-dependent revenue line under active political scrutiny.
6. Buying into a hosted or hashrate contract instead of infrastructure. Contracts sold on projected returns are the most heavily enforced corner of this sector.

Chapter 8

The checklist

• What exactly is the energy source, and who owns it
• All-in delivered cost per kilowatt-hour, not the headline rate
• How long the source is expected to last, and who decides
• Capital cost per megawatt installed, including generation and civils
• Whether the site is genuinely interruptible, and what that is worth where it sits
• What happens to the hardware when it is superseded
• If an interest is being sold rather than infrastructure built: how it is registered, and who is licensed to sell it

Where to go next

Our thesis on this is set out on the bitcoin mining page, including the case against it. The other free handbooks: emeralds · gold · oil and gas.

Questions: 888-296-4870, Monday to Friday, 9am–6pm Central.

This handbook is educational. It is not investment advice and not an offer of participation in any venture. We do not sell hashrate contracts, hosted mining agreements or participation in mining returns.