We can actually start with 1 question: If electricity demand from PoW mining spurs new renewable plants to be built, is that bad for the environment?
I (and many electricity companies) actually think PoW mining is good for the grid/renewable adoption in the long term. Let me explain why:
Some indisputable facts to get us started:
1. Most renewable electricity has unpredictable supply
2. Introducing marginal capacity of the same type gives diminishing returns. Eg: you're producing more during high supply times where electricity rate is low. During lower production periods all of the same type of renewable will be producing less so you can't even take advantage of the higher rates.
3. Rational bitcoin miners will turn off their machines when cost of power is greater than marginal return.
As a result, PoW mining will help the economics of building new wind/solar plants. Eg, currently it may not be profitable to build a new wind plant because base load is too low that the excess power generated would need to be sold off at 0 or even negative prices. However if bitcoin mining could be turned on during these times and off during periods of high demand, there will need to be fewer peaker plants in operation and it would positively affect the economics of opening a new wind plant.
Bitcoin mining only cares about the cost of electricity at a given time, it is not like most other electricity demands that are very time based. With the large variance of electricity generation by renewables, I think bitcoin can in the future help smooth demand according to the real supply/demand curve.
It's kind of like a different implementation of the Tesla utility grid batteries. Instead of deploying batteries, you force the grid to build more renewable capacity (that the miners are paying for) that miners use except in peak periods, where you turn off and effectively provide the grid with more power.
