Mining Bitcoin Using Nuclear Power Can Be Very Good Actually

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Illustration: Gizmodo (AP, Pixabay)

Last week, the Wall Street Journal published an article on three recent nuclear bitcoin deals that could signal a growing trend in the industry. The Journal article reflects a faint but growing sense of excitement expressed by some crypto fans, including Miami mayor and bitcoin fanboy Francis Suarez, who tried to lure miners to Miami in part by touting a nuclear power plant. nearby on the possibilities of a partnership between the two industries. (There was even a meeting for bitcoin fans and nuclear operators held in Austin this week.)

As its popularity has grown, bitcoin consumes more and more power and relies on dirty sources of electricity that could fry the planet. At the same time, nuclear proponents are calling for more investment and support for America’s largest source of carbon-free energy today. An injection of money from the cryptocurrency industry into nuclear power is probably not the big deal for crypto enthusiasts and technofuturists alike, but there are exciting opportunities for both of these industries to work. together.

Nuclear power currently makes up 20% of the US grid, providing a valuable source of carbon-free baseline energy. But for a myriad of reasons, the country’s nuclear reactors are increasingly on the verge of shutting down. The main one is the high operating costs compared to renewable energies as well as natural gas. Building new nuclear power plants is also an expensive and time-consuming endeavor, which is why there is only one plant currently under construction in the United States (and under construction with cost overruns and delays.)

Nuclear facilities as we have built them previously are among the largest infrastructure projects in the country, said Alex Gilbert, project leader at think tank Nuclear Innovation Alliance. Traditional US nuclear projects tend to be huge, and the costs of delays and mismanagement are hard to overcome when the plant is operational. Although efforts are being made to modernize nuclear technology, the rapid technological innovations benefiting other energy sources simply do not exist for nuclear power.

With wind and solar, when you have a very short construction time, you can then build a second plant using lessons from the first, which leads to relatively quick cost reductions, Gilbert said. If it takes you 15 years to design, license, and build a power plant before it goes live, by the time you go to build a second power plant, the technology has changed so much that you’re simply starting over.

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Of the three partnerships between bitcoin and nuclear power companies mentioned by the Journal, two involve bitcoin miners partnering with existing nuclear sources to power their operations. TeraWulf, a company that has established itself as a next-generation zero-carbon bitcoin mining operation, announced in April that it would build a facility next to the Susquehanna steam power station in Pennsylvania, which began operating in early 1980s. Meanwhile, Standard Mining said in July it would source power for a mining center in Ohio from a nuclear power plant operated by Energy Harbor.

Exploring the history of these two power plants in particular provides a better understanding of the types of nuclear power plant owners who court bitcoin miners. The owner of the Susquehanna facility, Talen Energy, has a history of financial problems, including owning two gas plants that have filed for bankruptcy. The company’s pivot to crypto mining was, according to Bloomberg, bad news for investors this year, many of whom bought bonds last year after Talen announced he would stop burning coal and would pursue a renewable energy strategy instead. (An analyst told Bloomberg the move looked like a Hail Mary.)

Then there is Energy Harbor Corp. The company had a different name: FirstEnergy. The company was the subject of federal charges last year for bribing senior Ohio politicians to pass a billion dollar bailout bill for its two ailing nuclear power plants in the state. FirstEnergy paid a fine of $ 230 million for its role in the scandal earlier this year; the company filed for bankruptcy in 2018 and re-emerged as Energy Harbor, which now owns and operates all of FirstEnergys’ former assets. (Energy Harbor itself has not been charged in the corruption case.)

These are not companies investing in the future, but rather companies looking for anything that will help maintain profits by using existing power plants. It’s pretty safe to say that some cash-strapped nuclear power plant owners will use mining partnerships not to make technological advancements, but rather to simply keep old plants running.

The factories themselves are pretty well run and they know what they’re doing, Gilbert said. It is really a question of economy. There is a certain point where you are definitely not profitable, and you are probably going to close because you are not getting enough money in the electricity markets. But if a bitcoin transaction takes 10 to 15 to 30% of your power at a reasonable price, it tilts you towards profitability.

This profitability means factories can stay open, providing miners with some carbon-free energy while keeping the United States’ largest zero-emission energy source operational. This is particularly a good idea while waiting for more renewables and policies that promote them to come online, in what could be the first real proof that bitcoin is doing good for society instead of being a bad thing. waste of energy and resources.

If bitcoiners are just going to mine magic money from the internet, they’d better do it without fossil fuels. If mining centers can do that, then that’s great news in terms of emissions. But these examples are not exactly the techno-futuristic dream of guiding the next generation of nuclear technology; it’s more like giving chemo to a patient with stage 4 cancer.

And there is a valid question as to how many miners will voluntarily sign up to get electricity from nuclear power plants and provide those much-needed tipping points for struggling plants across the country, especially when it’s almost certainly more expensive than the other options. Bitcoin enthusiasts love to brag about the fact that miners go where energy is cheapest. Nuclear is, quite simply, not that: The State of the World Nuclear Industry 2019 report found nuclear to be one of the most expensive forms of energy in the United States.

While some mining operations may think the value of harnessing carbon-free nuclear power is worth the PR, many are sure they will continue to choose cheaper energy sources, including fossil fuels and renewables. Neither TeraWulf nor Standard Mining answered questions about the tariffs they were paying for nuclear power, whether they had a discount, and whether they had toured different power plants or considered other forms. carbon-free technology.

The third example from the Journal is a little different, but almost more interesting, it’s not about keeping old and dying plants alive, but rather helping to develop new technologies. Hardware and hosting company Compass Mining announced in July that it had signed a 20-year supply agreement. with Oklo, a startup that develops what are called fast nuclear reactors. Oklo is one of a myriad of small companies and startups that say they are on the verge of deploying these small types of nuclear reactors, which theoretically would not have the magnitude of the construction and cost issues of large plants.

Much of it is a greenwashing PR victory for Compass in the present. Oklos’ technology won’t be ready for at least a few years, and the company can continue to use who knows what to power its mining operations in the interim while winning kudos for the nuclear deal. Nuclear critics point out that the industry has promised fast reactor technology before and has never been able to deliver on its promises, and that there are many safety hurdles for designs like Oklos.

But Gilbert said technology could finally be on the horizon. A few small to medium-sized reactors are expected to be ready for licensing in a few years and some over the next decade, he said, helped by private and federal funding. To actually get to a point where smaller types of reactors could be developed that would be competitive with the (rapidly declining) price of renewables, Gilbert said, would require a much larger increase in private capital as well as more customers.

Providing early demand for advanced reactors, especially microreactors, is how bitcoin can help the nuclear industry the most, he said. The biggest thing [about the Oklo deal] shows that there is a potential demand for which you can then go to investors and get funding.

I’m not a technofuturist who dreams of a libertarian paradise, but I have to admit that there is a kind of cool idea here. If the Bitcoin community truly believes cryptocurrencies are the money of the future, let them be the first to invest in emerging technology that could be the energy of the future. In the meantime, however, they should not be allowed to rest on their laurels of greenwashing while continuing to produce emissions while waiting for fast reactor technology to become feasible in 10 years. Government regulations are, of course, anathema to true believers in crypto. But a mandate that all new mining facilities source power from nearby nuclear power plants could go a long way in cleaning up bitcoins and ensuring that the carbon-free emissions we desperately need remain on the grid while fast reactors. sophisticated are put online.

I don’t particularly like bitcoin, but it’s here, and it’s going to have a huge energy impact, so I don’t want that energy impact being served by coal, Gilbert said. If that can be served by nuclear which keeps more nuclear around which prevents us from using natural gas, that’s great.

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