The bitcoin power plant is angering environmentalists

The barrier to large-scale bitcoin mining is to find enough cheap energy to run the huge, energy-absorbing computer fields that create and trade cryptocurrencies. One mining operation in downtown New York came up with a new solution that worried environmentalists. It uses its own power plant.

Greenidge Generation operates a once-preserved power plant near the shores of Lake Seneca in the Finger Lakes region to produce approximately 44 megawatts to operate 15,300 computer servers, plus additional electricity to the state grid. Bitcoin-dedicated megawatts could power more than 35,000 households.

Proponents call this a competitive way of extracting the increasingly popular cryptocurrencies without burdening the existing electricity grid.

Ecologists consider the plant a climate threat.

They fear waves of resurrected fossil fuel plants that drain greenhouse gases for private gain rather than the public good. Given that Greenidge is a test case, they are asking the state to refuse to renew the power plant’s air quality permit and to curb similar projects.

“The current state of our climate requires measures in the field of cryptocurrency mining,” said Liz Moran of Earthjustice. “We are jeopardizing the state’s ability to meet our climate goals and, as a result, we are preparing the ground for the rest of the country.”

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

“For decades, the region has been told to see new industries and opportunities,” Greenidge said in a statement. “In fact, we are doing it and we are doing it in full compliance with the highest national environmental standards.”

Bitcoin miners unlock bitcoins by solving complex, unique puzzles. As the value of bitcoin grows, puzzles become more difficult and solve more computer power. Estimates of how much Bitcoin consumes vary.

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

Opponents are frustrated that Greenidge has asked for the plant’s operation, but is now operating a mine that takes up more of the plant’s energy.

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

Proponents see this as an economic benefit in a part of northern New York that could benefit from the aid. Douglas Paddock, chairman of the Yates County Legislature, said in a public hearing this week that the plant created 45 high-paying jobs and “made a significant contribution” to the area through tax payments and capital investment.

Some opposition to the power plant is focused on the potential effects of its water abstraction from Lake Seneca. However, air quality problems came to the fore when the State Ministry of Environmental Protection reviewed the plant’s emissions permits.

Greenidge said it complied with its permits and that the plant was 100% carbon neutral through the purchase of carbon offsets, such as forestry programs and landfill methane capture projects.

Opponents say the power plant is undermining the state’s efforts to dramatically reduce greenhouse gas emissions in the coming decades under the 2019 climate law.

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

Environmentalists estimate that there are 30 plants in New York that could be turned into mining operations.

“I really think, more than anything else, this power plant is a significant test of whether state climate law is really worthwhile,” said Judith Enck, who served as the EPA’s regional administrator in the northeastern United States under President Barack Obama.

Senators Chuck Schumer and Kirsten Gillibrand have independently asked the Federal Environmental Protection Agency to conduct oversight.

There are other power plants throughout the country that are used to mine cryptocurrencies according to different types of measures.

In the district of Venango in Pennsylvania, a power plant is used to extract bitcoins, which converts coal waste into energy and can supply electricity to the grid if necessary. Stronghold Digital Mining plans to replicate this type of operation at two other locations in Pennsylvania.

And in Montana, the coal-fired power plant now provides 100% of its energy to Marathon Digital Holdings for bitcoin mining under an energy purchase agreement.

“We’ve done what a lot of miners do before, that is, you’ll find an industrial building, set it up for mining, and then get electricity from the grid,” said Fred Thiel, CEO of Marathon. “And we wanted to turn this model upside down because we knew there was a lot of underutilized energy in the United States.”

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

The state of New York has yet to decide on Greenidge’s permits.

Greenidge said that even if the plant was running at full capacity, its potential emissions would equal 0.23% of the state’s greenhouse gas reduction target by 2030.

However, State Commissioner for the Environment Basil Seggos said on Twitter last month that “Greenidge has not demonstrated compliance with the NY Climate Act” based on its goals.

“The state of New York is leading the way in climate change,” Seggos said in a statement, “and we have some major concerns about the role that cryptocurrency mining can play in generating additional greenhouse gas emissions.”