Dresden Bitcoin Mining Plant Angers Environmentalists

One obstacle to large-scale bitcoin mining is finding enough cheap power to run the massive, power-hungry computer networks that create and process the cryptocurrency. A mining operation in central New York has proposed a new solution that has environmentalists alarmed. It uses its own power plant.

Greenidge Generation operates a once mothballed plant near the shore of Seneca Lake in the Finger Lakes region to produce approximately 44 megawatts to run 15,300 computer servers, plus additional electricity it sends into the power grid of the state. The megawatts dedicated to Bitcoin could be enough to power more than 35,000 homes.

Proponents call it a competitive way to mine increasingly popular cryptocurrencies, without draining the existing power grid.

Environmentalists see the plant as a climate threat.

They fear a wave of resurrected fossil fuel power plants pumping out greenhouse gases more for private profit than the public good. Viewing Greenidge as a test case, they’re calling on the state to deny the plant’s air quality permit renewal and curb similar projects.

“The current state of our climate demands action on cryptocurrency mining,” said Liz Moran of Earthjustice. “We are undermining the state’s ability to meet our climate goals, and thereby setting the stage for the rest of the country.”

The former coal-fired power plant, in a tourist region known for its glacial lakes and Riesling wines, was converted to natural gas by Greenidge and began generating electricity in 2017. Bitcoin mining at the plant, which has a capacity of 106 megawatts, started in earnest last year. The company said it was “bringing part of the world’s digital future” to upstate New York.

“For decades, this region was told it would see new industries and opportunities,” Greenidge said in a prepared statement. “We actually do it, and do it fully within the state’s high environmental standards.”

Bitcoin miners unlock bitcoins by solving complex and unique puzzles. As the value of Bitcoin increases, the puzzles become more and more difficult and it takes more computer power to solve them. Estimates of how much energy Bitcoin uses vary.

Greenidge said it mined 729 bitcoins in the three months ending September 30. The value of cryptocurrency fluctuates and on Friday, one bitcoin was worth over $59,000.

Opponents of the plant suspect Greenidge of baiting and applying to operate a power plant, but planning to operate a mining operation that consumes more energy from the plant.

Greenidge says mining was not part of the plan when the plant came back online and notes that they continue to supply power to the grid. From January to June, Greenidge said it used 58% of its electricity for mining.

Proponents see it as an economic boon to a part of upstate New York that could use the aid. Douglas Paddock, Speaker of the Yates County Legislature, told a public hearing this week that the plant had created 45 well-paying jobs and made a “significant contribution” to the region through tax payments and investment in capital.

Some opposition to the plant centers on the potential effects of its water withdrawals from Seneca Lake. But air quality issues have taken center stage as the state’s Department of Environmental Conservation reviews the plant’s air emissions permits.

Greenidge said it was in compliance with its permits and the plant was 100% carbon neutral, thanks to the purchase of carbon offsets, such as forestry programs and projects that capture methane from landfills.

Opponents say the plant is undermining state efforts to drastically reduce greenhouse gas emissions over the next few decades under its 2019 climate law.

A broad coalition of environmental groups and other organizations this week called on Governor Kathy Hochul to deny the air permit for Greenidge and take similar action to prevent an existing plant near Buffalo from becoming a mining site. The coalition wants Hochul to set a “national precedent” and enact a statewide moratorium on the energy-intensive “proof of work” cryptocurrency used by bitcoin miners.

Environmentalists estimate that there are 30 factories in New York that could be converted into mining operations.

“I really think that more than anything, this plant is an important test of whether the state’s climate law is really worth anything,” said Judith Enck, who served as the EPA’s regional administrator for the Northeast. of the United States under President Barack Obama.

Senses Chuck Schumer and Kirsten Gillibrand have separately asked the Federal Environmental Protection Agency for oversight.

Throughout the country, other powerhouses are used for cryptocurrency mining under different types of arrangements.

In Venango County, Pennsylvania, a power plant that converts waste coal into electricity is used to mine bitcoins and can supply electricity to the grid when needed. Stronghold Digital Mining plans to replicate this type of operation at two other sites in Pennsylvania.

And in Montana, a coal-fired power plant is now supplying 100% of its power to Marathon Digital Holdings for bitcoin mining under a power purchase agreement.

“We had already done what many miners do, which is you find an industrial building, set it up for mining, and then subscribe to grid power,” said said Marathon CEO Fred Thiel. “And we wanted to flip that model because we knew there are many underutilized sources of power generation in the United States”

Thiel said harmful emissions are low due to the quality of the coal and pollution controls, and the plant will be carbon offset by the end of next year. He said his company is focused on moving towards renewable energy, saying cryptocurrency miners can provide crucial financial incentives to build more clean energy projects.

New York State has yet to make a decision on Greenidge’s permits.

Greenidge said that even if the plant operated at full capacity, its potential emissions would equate to 0.23% of the state’s 2030 greenhouse gas emissions reduction goal.

However, state environmental commissioner Basil Seggos tweeted last month that “Greenidge has not shown compliance with New York’s climate law” based on that law’s goals.

“New York State is at the forefront of climate change,” Seggos said in a prepared statement, “and we have serious concerns about the role cryptocurrency mining may play in generating emissions. additional greenhouse gases”.

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