A financial investor bought an old power plant. Now it’s running at full load and running a server farm. The residents are outraged – because of the climate effect and because the cooling water warms their lake.
Bitcoins are very harmful to the climate because their production uses so much energy. But what has previously been considered a global problem is becoming a very specific and local problem around Seneca Lake near New York. The idyllic lake is known as an excursion destination, small boats and swimmers populate it. But gradually the water is cozy and warm – like a bathtub, the residents tell the TV station NBC News. And that has nothing to do with climate change, but with the new owner of the gas-fired power plant near the lake.
Cheap electricity is the key
The plant was sold to financial investor Atlas Holdings, who had special plans. The system now not only feeds the public power grid, it runs around the clock at full load to operate around 8,000 Bitcoin mining computers. The idea behind it: In order for mining to be worthwhile, electricity must be obtained cheaply. At 30 cents for the KWH as well as for Germany’s private consumers, mining is not worthwhile. With your own power plant, which to a certain extent only produces for your own consumption, you save costs and state taxes – this makes electricity much cheaper. “These crypto firms are looking everywhere to get relatively cheap power in a relatively cool climate,” said Yvonne Taylor, vice president of the Seneca Lake Guardian, the broadcaster. “It’s a terrible business model for all of New York State, the United States, and the planet.”
Private equity without scruples
An estimate by the University of Cambridge says that the bitcoin miners of the world use more energy in one year than the country of Chile. According to NBC News, listed companies are pulling out of climate-damaging industries because they fear public criticism. But that doesn’t help, because private equity firms are available as buyers for the bargains.
When it was taken over, the power plant was only running at a fraction of its capacity. Atlas Holdings not only bought it, but also brought a business model for the gas-fired power plant with it. A model that does not stand alone. Systems are often purchased that are no longer worth converting to meet new environmental standards. Tyson Slocum, director of energy programs at Public Citizen, a not-for-profit consumer protection organization, told NBC, “Private equity firms think they can be squeezed out a few more years of operation.”
Booming industry
The operating company Greenidge pumps 511 million liters of heated cooling water into the lake every day. The NGO Earth Justice claims that carbon dioxide emissions increased almost tenfold from January to December 2020. Because the power plant burns gas to generate the energy for mining. If the boom continues, the Bitcoin power plant will overturn the climate targets for the entire state of New York.
Greenidge plans to significantly enlarge the computer farm, so more electricity would have to be produced accordingly. In addition, more power plants are to be purchased so that the Bitcoin mining capacity can be increased from 19 megawatts to up to 500 megawatts in 2025. The operating license will probably be renewed. Because the power plant is no more harmful to the climate than others, and the licensing authorities do not have to decide on the sense or nonsense of mining.
The US rival China has also recognized the climate effect of mining. Because the KP does not want the miners to destroy its climate targets, Beijing pulled the plug on the Bitcoin miners. Mining was banned out of hand in May. And the ban has been enforced for a few weeks.
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