Two Pennsylvania nuclear companies launch bitcoin mining units

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Could bitcoin mining be the salvation of America’s struggling nuclear power industry?

The owners of several nuclear power plants, including two in Pennsylvania, have formed businesses with cryptocurrency companies to provide the electricity needed to run the data centers that mine bitcoin. Since nuclear power does not emit greenhouse gases, according to project investors, zero-carbon bitcoin would address climate concerns that have tarnished the energy-intensive cryptocurrency industry.

Talen Energy, the owner of the Susquehanna steam power station near Berwick, Pa., Announced this week that it has signed a deal with TeraWulf Inc., a cryptocurrency mining company in Easton, Md. , to build a giant bitcoin factory next to its twin. reactors in northern Pennsylvania. The company’s first phase, dubbed Nautilus Cryptomine, could cost as much as $ 400 million.

The Talens project could eventually use up to 300 megawatts or 12% of the 2,500 MW capacity at Susquehannas. It is the second bitcoin mining venture in the past month that involves owners of nuclear facilities in Pennsylvania.

Last month, Energy Harbor Corp., the former power generation subsidiary of First Energy Corp., announced that it had signed a five-year agreement to provide carbon-free electricity to a new bitcoin mining center operated by Standard Power in Coshocton, Ohio. Energy Harbor has two nuclear units in Ohio and the two-unit Beaver Valley Power Plant in western Pennsylvania.

A nuclear fission start-up, Oklo, also announced last month that it had signed a 20-year deal with a bitcoin miner to provide it with electricity, although the company has yet to build a power plant.

In recent years, commercial nuclear operators have struggled to compete in competitive electricity markets against natural gas power plants and renewable sources such as wind and solar. Unfavorable market conditions have accelerated the decommissioning of several single-unit reactors, such as Three Mile Island Unit 1 in Pennsylvania. Lawmakers in New Jersey, New York and Illinois have enacted nuclear bailouts, paid for by electricity customers, to avoid early retirement from other power plants.

Cryptocurrency deals would provide nuclear generators with reliable outlets for their energy, and bitcoin miners with predictable energy sources at cheap prices, as well as a zero-carbon cachet.

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

The nuclear industry sees the crypto craze not only as a crutch, but also as a launching pad for expansion. U.S. nuclear power plants are ready and capable of providing abundant and reliable carbon-free power to miners while opening new business avenues for nuclear developers and utilities, increasing their operating profits and potentially accelerating the deployment of the next generation of nuclear power plants. reactors, Kotek mentioned.

Nuclear generators are not the only electricity producers following the trend. Stronghold Digital Mining, a bitcoin miner who registered for an initial $ 100 million stock offering last month, plans to build its bitcoin mining operation in northwestern Pennsylvania, powered from residual coal from Venango County. Although its litcoin is not zero carbon, it would reduce the piles of waste coal that is harmful to the environment.

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

In May, Chinese regulators announced new measures to limit bitcoin mining in several regions that have not met Beijing’s energy consumption targets. Bitcoin production levels have fallen since then, forcing bitcoin producers to relocate to locations with low operating costs and cool climates to reduce the costs of cooling bitcoin data centers. Washington State, which has a lot of cheap hydroelectric power, has seen a huge boom in bitcoin mining.

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

Bitcoin mining is built around blockchain technology and involves generating a chain of code 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 of which nearly 90% have already been mined. Thus, the remaining bitcoins are becoming increasingly rare and more difficult to mine.

Data centers operated by bitcoin miners randomly generate strings of code, called hashes, to solve the puzzle and earn new coins. Globally, bitcoin network miners generate more than 100 quintillion hashes per second, or 100,000,000,000,000,000,000 guesses per second, according to Blockchain.com. The first phase of the Nautilus project in Pennsylvania would generate five quintillion hashes per second.

Such guesses require massive computing power, robust internet connections, and a lot of electricity. Smaller bitcoin miners have joined together in consortia to pool their computing power. The biggest players have built huge data centers devoted exclusively to producing lines of random code.

Mining cryptocurrency is an international, profitable and energy-intensive business, ScottMadden, a management consulting firm, said in an article published last year. Bitcoin mining consumes around 0.5% of the electricity produced globally, which is roughly as much as the country of Greece.

Some lawmakers have called for greater regulation of cryptocurrency, citing the enormous amount of resources required to produce it. There are currently computers all over the world spitting out random numbers around the clock, in a competition to try and solve an unnecessary puzzle and win the bitcoin reward, said Senator Elizabeth Warren (D., Mass. ) in June, calling for a crackdown on environmentally damaging cryptocurrencies.

But as a business proposition, bitcoin has an appeal. ScottMadden, the consultancy, suggested last year that nuclear operators in some states were in a unique position to profit from cryptocurrency firms.

According to ScottMadden, diverting 1 megawatt of electricity to efficient mining could generate revenues of $ 900,000 per year and profits of $ 650,000, without considering cooling, repairs or technicians. His analysis predicts that a project could break even in about 15 months.

The consulting firms concept project was based on a bitcoin price of $ 9,275. The price of a bitcoin last week ranged between $ 38,000 and $ 42,000.

Numbers like this have undoubtedly caught the attention of Talen Energy, which plans to divert around 180 MW to the first phase of the Nautilus Cryptomine, which would produce bitcoin at the Susquehanna plant in Luzerne County.

I think this is a great opportunity for our plant, said Dustin Wertheimer, vice president and divisional chief financial officer of Talen Energy. He is based in Allentown, where Talens’ former owner, PPL Corp was located. Talen is now based in Woodlands, Texas.

Unlike other crypto projects where the power generator is an independent power supplier, the Nautilus Cryptomine is a 50-50 venture between Talen and TeraWulf. The project would be directly connected to the Susquehanna plant behind the meter, in industry jargon, and would avoid grid transmission costs.

The direct connection also ensures that the operation comes exclusively from carbon-free energy, Wertheimer said.

You’ve seen some of the press and the negative publicity bitcoin has received recently and the impact of fossil fuels, Wertheimer said. So it’s a good thing for us to have a direct connection to a carbon-free power source.

The cryptomine would be located inside a 200,000 square foot building about four football fields. The mining operation would be built on a data center campus that Talen is developing next to the Susquehanna plant. The data center would generate around 1,000 construction jobs, Wertheimer said. Cryptomine is said to employ around 50 people to operate.

The first phase of the project would cost between 350 and 400 million dollars. The Nautilus company is negotiating with fiber optic providers to put in place the overloaded internet connections needed to transmit and receive the massive amounts of code it generates, Wertheimer said.

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

The Future of Work is produced with support from the William Penn Foundation and the Lenfest Institute for Journalism. Editorial content is created independently of project funders.

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