Unless it's in a grid in which a 100% of all energy is renewable that's not that relevant because lowering total energy consumption would it make possible to decrease production in fossil fuel power plants.
It's more of an observation on how markets tend to work in general.
Unless we're only talking about Iceland or similar countries, which are not connected to any continental grid and have a surplus of cheap/free energy they have no where to put, increased demand for electricity will lead to increased production. This demand might be fulfilled by building new powerplants using renewable sources (since currently that's cheaper than fossil or nuclear. However as long as these new sources are connected to a grid which still has non-renewable power plants mining bitcoin will produce as much CO2 as using a washing machine, smelting aluminum or driving a tesla per kWh.
Now if (assuming everything else stays constant) for some reason all bitcoin mining stopped the decrease in demand would lead to decrease in production from more expensive (possibly due to regulatory overhead and/or subsidies to renewables) more fossil-fuel based energy sources
Whether it can be used for other production or not, if mining runs on renewables, that's just it. How do you deliver energy for other production? Just send it across the country?
What proportion of bitcoin mining is done in places which have either built new renewable power plants specifically for mining bitcoin or already have a surplus of energy and have no options to sell it to anyone else?
The only example I know is Iceland, but according to https://cbeci.org/mining_map it's not even in the top 10. Over 85% of all bitcoins are mined in these countries:
- 65% is mined in China with 721.2 g/kWh
- 7.2% in US: 417.305 g/kWh
- 6.9% in Russia: 517 g/kWh
- 6.17% in Kazakhstan (couldn't fine specific figure but around 80% produced power comes from Coal plants so gCO2/kWh must be very high)
The only country in the list which close to 0g/kWh is Norway at 0.48%.
China has history of building hydroelectric power plants with excess power and you need only a few instances of surplus energy as they can be bought at a discount, which makes mining more profitable. Fossil fuel can't provide surplus energy in principle and can't be attractive for mining.