CO2-free bitcoins? The owner of a nuclear power plant in Pennsylvania thinks it could hit gold | news

Could Bitcoin Mining Save America’s Competitive Atomic Energy Industry?

The owners of several nuclear power plants, including two in Pennsylvania, have partnered with cryptocurrency companies to provide the electricity needed to run data centers that “mine” Bitcoin. With nuclear energy not emitting greenhouse gases, the project’s investors say, the carbon-free Bitcoin would address climate concerns that have tarnished the energy-intensive cryptocurrency industry.

Talen Energy, the owner of the Susquehanna Steam Electric Station near Berwick, Pennsylvania, announced this week that it has signed a contract with TeraWulf Inc., a cryptocurrency mining company in Easton, Md., To build a giant bitcoin -Factory next to its twin has signed reactors in northern Pennsylvania. The company’s first phase, called Nautilus Cryptomine, could cost up to $ 400 million.

Talen’s project could end up using up to 300 megawatts – or 12% of Susquehanna’s 2,500 MW capacity. It is the second bitcoin mining company in the last month to include nuclear plant owners in Pennsylvania.

Last month, Energy Harbor Corp., the former power generation subsidiary of First Energy Corp., announced that it had signed a five-year carbon-free power supply contract for Standard Power’s new Bitcoin mining center in Coshocton, Ohio. Energy Harbor owns two nuclear power plants in Ohio and the Beaver Valley Power Station dual power plant in western Pennsylvania.

A nuclear fission start-up, Oklo, also announced last month that it had signed a 20-year contract with a Bitcoin miner to power it, even though the company has not yet built a power plant.

In recent years, commercial nuclear operators have struggled to compete in the competitive electricity markets against natural gas power plants and emerging renewable energy sources such as wind and solar. Unfavorable market conditions have accelerated the decommissioning of several individual reactors, such as the Three Mile Island Unit 1 in Pennsylvania. Legislators in New Jersey, New York, and Illinois have passed nuclear bailout packages paid for by electricity customers to prevent the early retirement of other power plants.

The cryptocurrency deals would offer atomic generators with reliable sockets for their electricity and Bitcoin miners with predictable power sources at affordable prices along with a carbon-free seal of approval.

“Nuclear power is uniquely positioned to power crypto-miners and other large energy users who are committed to a carbon-free future,” said John Kotek, senior vice president of policy development and government affairs at the Nuclear Energy Institute. in an email.

The nuclear industry sees the crypto craze not as a crutch, but as a launch pad for expansion. “US nuclear power plants are ready and able to provide abundant, reliable, carbon-free electricity to miners while opening new business opportunities for nuclear developers and utilities, increasing their operating profits and potentially accelerating the deployment of the next generation of reactors . “Said Kotek.

Nuclear producers aren’t the only power producers joining the trend. Stronghold Digital Mining, a bitcoin miner who signed up for an initial spending of $ 100 million last month, plans to build its bitcoin mining operation in northwestern Pennsylvania, powered by waste coal from Venango County. Although its Bitcoin wouldn’t be carbon-free, it would reduce polluting piles of waste coal.

Energy and cryptocurrency experts say several trends are shifting the market in favor of U.S. nuclear power producers.

In May, Chinese regulators announced new measures to limit bitcoin mining in several regions that failed to meet Beijing’s energy consumption targets. Since then, bitcoin production has declined, forcing bitcoin producers to relocate to places with low operating costs and cool climates in order to reduce the cost of cooling bitcoin data centers. Washington state, which has plenty of cheap hydropower, has seen a huge boom in bitcoin mining.

This is how mining is done

Bitcoin is a virtual peer-to-peer currency that operates without central authority and can be exchanged for traditional currencies such as the US dollar. It is the most successful of hundreds of attempts to create virtual money through the use of cryptography, the science of creating and breaking codes – hence they are called cryptocurrency.

Bitcoin mining is based on blockchain technology and involves generating a code sequence that decrypts a collection of previously executed Bitcoin transactions. Successful decryption is rewarded with a new bitcoin. The supply of bitcoins is limited to 21 million – almost 90% have already been mined. The remaining bitcoins are becoming increasingly scarce and difficult to extract.

Data centers operated by Bitcoin miners generate random strings of code, so-called “hashes”, in order to solve the puzzle and earn new coins. Worldwide, miners in the Bitcoin network generate more than 100 trillion hashes per second – according to Blockchain.com, that’s 100,000,000,000,000,000,000 estimates per second. The first phase of the Nautilus project in Pennsylvania would generate five trillion hashes per second.

Such assumptions require muscular computing power, robust internet connections and lots of electricity. Smaller Bitcoin miners have come together in consortia to bundle their computing power. Bigger players have built huge data centers devoted solely to producing random lines of code.

“Mining cryptocurrency is an international, profitable and energy-intensive business,” said ScottMadden, a management consultancy, in a paper published last year. Bitcoin mining uses an estimated 0.5% of the electricity produced worldwide, or about as much as the country of Greece.

Some lawmakers have called for more regulation of cryptocurrency, citing the enormous resources required to produce it. “Right now there are computers all over the world spitting out random numbers around the clock in an attempt to solve a useless puzzle and win the Bitcoin reward,” Senator Elizabeth Warren (D., Mass.) Said in June : calls for a crackdown on “environmentally wasting cryptocurrencies”.

Why possible numbers look good

But as a business proposition, Bitcoin has appeal. ScottMadden, the consulting firm, suggested last year that nuclear operators in some states are in a unique position to benefit from cryptocurrency companies.

Redirecting 1 megawatt of power to an efficient mining operation could conservatively generate $ 900,000 in annual sales and $ 650,000 in profit without considering refrigeration, repairs, or technicians, according to ScottMadden. His analysis predicts that a project could break even in about 15 months.

The consulting firm’s conceptual project was based on a Bitcoin price of $ 9,275. The price of a bitcoin fluctuated between $ 38,000 and $ 42,000 last week.

Such numbers have undoubtedly caught the attention of Talen Energy, which plans to divert about 180 MW to the first phase of the Nautilus cryptomine, which would produce bitcoin at the Susquehanna plant in Lucerne County.

“I think it’s a great opportunity for our plant,” said Dustin Wertheimer, vice president and divisional chief financial officer, Talen Energy. It is based in Allentown, the home of Talen’s previous owner, PPL Corp. Talen is now based in Woodlands, Texas.

In contrast to other crypto projects in which the power generator is a standard electricity supplier, the Nautilus Cryptomine is a 50-50 company between Talen and TeraWulf. The project would be connected directly to the plant in Susquehanna – “behind the meter”, in industry jargon – and would avoid transmission costs from the network.

The direct connection also guarantees that the company is fed exclusively with carbon-free energy, said Wertheimer.

“You’ve seen some of the press and negative publicity Bitcoin has received lately and the impact of fossil fuels,” Wertheimer said. “So it’s great for us to have a direct connection to a CO2-free power source.”

The crypto mine would be located in a 200,000-square-foot building – about four soccer fields. The mining operation would be built on a data center campus that Talen is developing alongside the Susquehanna facility. The data center would create around 1,000 construction jobs, Wertheimer said. The crypto mine would employ around 50 people.

The first phase of the project would cost approximately $ 350 to $ 400 million. The Nautilus company is negotiating with fiber optic providers to introduce uploaded Internet connections necessary to send and receive the huge amounts of code, Wertheimer said.

“When you look at the United States and look at the challenges nuclear power plants are facing, I think this is a great opportunity to extend the life of many power plants,” he said.

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