The Greenidge plant currently runs at 30 megawatts during low-demand hours and 106 megawatts at peak, so there is plenty of untapped capacity around the clock. Bitcoin mining is seen as a win-win situation. It allows the peaking power plant turn a profit at times of low electricity demand and helps create more tax revenue for the town of Dresden, NY.
Betting on both bitcoin and energy markets
Kevin Zhang, director of Greenidge's blockchain strategies, said in a statement the initiative would provide potential investors with “unique exposure to both the crypto-currency and energy markets.” Adding the bitcoin mining rigs is part of a $65 million upgrade of the power plant, including its fuel conversion from coal to natural gas.
The global bitcoin network operates around the clock and Dale Irwin, CEO of Greenidge, stressed the plant is used to such commitments. “As a power plant operator, running assets reliably 24/7, on 365 days per year is in our DNA,” he said. “By partnering with crypto-currency experts, we’ve created a truly ‘one of a kind’ project and we’re excited to continue to grow.”
Though mining works for gas-fired plants, the operator cautioned that it might not make sense for renewable energy sources where it’s best to store excess electricity for later. Should the Greenidge plant face more electricity offtake, the bitcoin mining would quickly loose attractiveness.
Technicalities around Bitcoin mining mean it gets more and more difficult to generate the crypto-currency over times. So the windfalls, Atlas enjoys today might be much more difficult to reap in the years ahead.
IEA warns of Bicoins’ massive energy use
Concern is mounting after media reports claimed that bitcoin is on track to consume as much electricity as the United States in 2019 and all of the world’s energy by 2020. In contrast, academic estimates put bitcoin’s electricity consumption at just between 0.1% and 0.3% of global electricity use.
Blockhain removes the need for banks as a central authority to verify and log transactions and replaces this with a computers network, running some particular blockchain software. The lack of a centralised, trusted authority means that blockchain needs a “consensus mechanism” to ensure trust across the network. In the case of bitcoin, consensus is achieved by a method called “Proof-of-Work” (PoW), where computers on the network – “miners” – compete with each other to solve a complex math puzzle. This process of Bitcoin mining is highly energy-intensive.
Looking ahead, IEA analysts point out that bitcoin mining is a “highly mobile industry” which can migrate quickly to areas with cheap electricity. Hereby, localized hotspots could prompt electricity shortages and spikes in power prices which may prompt a strong backlash from regulators and the wider public.
