Cleanspark (CLSK)

Company website 2020 Financial Report Stock Analysis

Million Dollars

in revenue in 2020, an increase of 122% from 2019

Acquisitions

since January 2020

Ranking

Cleanspark was Ranked #11 on the Microgrid Controller Leaderboard 2021 by Guidehouse Insights

View Our Analysis

The Path to Drawdown: Microgrid

Tackling climate change and staying below 1.5ºC of global temperature rise requires a massive scaling of emissions-free energy sources. Thankfully, renewable sources like solar and wind are quickly expanding their capacity worldwide. But to provide reliable clean energy to every household and organization in the world, we need a power grid that’s efficient and more resilient.

The power grid is the dynamic network of electricity generation, transmission, storage, and consumption that 85% of the world relies on. Microgrids, on the other hand, are localized groupings of distributed energy sources like solar and wind, combined with energy storage or backup generation and load management technology. Microgrids can operate as stand-alone entities or be plugged into the centralized grid as needed.

By enabling the integration of renewable energy sources into the grid, along with storage and demand management, microgrids can play a critical role in the advancement of a flexible and efficient electrical grid. More than 1 billion people -- around 17% of the global population -- still lack access to a centralized power grid. Microgrids can provide these people with energy access using low-carbon energy sources. In developed economies, the growth of microgrids is expected to strengthen the resilience of overall electricity grids.

About

Cleanspark (stock ticker: CLSK) provides microgrids and microgrid-related software and control technology. Headquartered in Woods Cross, Utah, they offer advanced energy software and hardware that allow utilities, residential, commercial, industrial, military agricultural and municipal energy consumers to gain resiliency and economic optimization.

CLSK's Role in Drawdown

Nearly 90% of Cleanspark’s total revenue is generated by microgrid-related products and services. This consists of a wide array of devices, software, and solutions (pp. 5-6).

For example, their microgrids integrate renewable energy generation systems with advanced energy storage devices and interoperate with the local utility grid. Within these microgrids, autonomous control devices relay data between smart hardware and servers to make real-time decisions that deliver optimum power where and when it’s needed.

Their “mPulse” software is a platform that enables users to control all forms of energy generation and energy storage devices to provide energy security in real time. This means users can choose when to buy or sell power to and from the utility grid.

CLSK: What We Like

Cleanspark has seen aggressive revenue growth over the past five years, from $82,000 in 2016 to over $10 million in 2020, a 159.8% year-on-year growth. The vast majority of this growth came from rapid expansion in their microgrid-related sales and services.

Proactive in advancing state and federal policies regarding microgrids

In 2021 Cleanspark joined Think Microgrid, a group of leading microgrid and energy companies that supports the microgrid sector in critical policy, legislative and regulatory discussions currently underway.

What We Want to See Improve

Publish ESG Reports

CLSK’s 2020 Annual Report states (p. 8) that “no significant pollution or other types of hazardous emission result from the Company’s operations.” But because CLSK doesn’t track and publish environmental and sustainability metrics, we can’t evaluate these claims. Most importantly, we want to see the company tracking their GHG emissions so that investors can assess their climate impact.

Set Sustainability Targets

Once CleanSpark begins tracking sustainability metrics, they can start setting targets for the company to achieve in the next several years. These should be precise quantitative targets regarding reducing emissions and waste, with concrete timelines for achieving those targets. Ultimately, we want to see Cleanspark achieving zero scope 1, 2, and 3 GHG emissions in the near future.

Completely Base Bitcoin Mining to Renewable Energy

CleanSpark owns and operates CleanBlok, a bitcoin mining operation, and recently acquired ATL Data Centers LLC (p. 17), which runs thousands of Bitcoin mining units. While CleanBlok is advertised as being run on 95% carbon-free energy mix, we worry that bitcoin mining is still an energy-intensive activity. We urge CleanSpark to switch completely to renewable energy sources before expanding their bitcoin mining activity.

Related Microgrid Stocks in the Climate Index

View All Climate Index Stocks →

Allocated		Company	Description
0.05%		Cleanspark (CLSK)	Cleanspark makes microgrids & software that help organizations gain energy resiliency. Microgrids can integrate renewables and improve energy independence