The Uncertain Fate of Upstate’s Most Controversial Bitcoin Mining Site

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First opened in 1937, the coal-fired power plant located outside the village of Dresden in the Finger Lakes region is one of several upstate power plants that have been taken out of service in the past few years. decades due to its inefficiency and excessive greenhouse gas emissions. But the plant was given a new lease of life in 2014, when Atlas Holdings acquired it and upgraded it to burn natural gas rather than coal.

Greenidge Generation, a subsidiary of Atlas Holdings, applied to the state Department of Environmental Conservation for a Title V aerial permit that would allow them to restart power generation. In that application, Greenidge said the plant would operate only part-time, supplying bulk electricity to the state’s power grid during peak hours. The Greenidges Air Permit was issued in 2016, with renewal scheduled for September 2021.

The Dresden power plant restarted operations in 2017. At first, it only operated when the demand on the grid and the price of electricity were particularly high.

It served the grid and supplied electricity only to the grid, said Mandy DeRoche, associate general counsel for Earthjustice’s clean energy program, which represents environmental groups opposed to Greenidge. So we can see from the emissions profile and the days of operation, the hours of operation, that they were only online a few days a year. Each of these years corresponds to heat waves and cold waves.

But Greenidge soon discovered a way to monetize its year-round power generation.

A lucrative opportunity

In the years since the Dresden factory restarted, a growing number of cryptocurrency mining companies have set up operations in upstate New York, lured by higher electricity prices. relatively cheap. Greenidge realized he had access to a particularly cheap source of energy, as he owned his own power plant, and began investing in bitcoin mining.

As of 2020, Greenidge began operating the Dresden factory almost full-time, using most of the power generated to power its own Bitcoin mining rigs rather than selling it to the network.

As cryptocurrency markets and electricity markets are constantly fluctuating, we are doing what is most profitable at any given time, either selling the energy generated or mining crypto with that power, the director said. Greenidge financier Tim Rainey to Forbes in 2020.

On becoming a leading cryptocurrency mining company, Greenidge went public on the Nasdaq stock exchange through a reverse merger and took on significant debt to fund the purchase of several rigs. mining forms and a second powerhouse/crypto mining facility in South Carolina.

Emissions create an inconvenience

As the Dresden plant now operated around the clock, its total greenhouse gas emissions soared from around 40,000 tonnes of carbon dioxide in 2019 to over 200,000 tonnes in 2020.

Conservationists protested, arguing that the state Department of Environmental Conservation had only permitted the operation of a part-time power plant, not a carbon extraction facility. full time cryptocurrency.

The department ultimately rejected this argument. But the agency has been more receptive to advocates saying Greenidges’ operation of the Dresden plant could violate the Climate Leadership and Community Protection Act, a landmark climate law the state signed into law in 2019. .

This is the big change between the 2016 permit and the 2021 renewal application is that the groundbreaking climate law passed does not allow emissions increases to interfere or be inconsistent with emission reductions in New York State, DeRoche said.

After a month-long public comment hearing and repeated delays, the department’s Environmental Permitting Division denied Greenidges’ aerial permit renewal on June 30, 2022.

Based on the information contained in the application as prepared and submitted by Greenidge, as well as public comments and other relevant information, the Department hereby determines that continued operation of the facilities in the current manner would be inconsistent with or would interfere with achieving the state’s GHG emissions limits, the agency wrote in a letter explaining its decision.

fate uncertain

Greenidge immediately appealed the decision, and it is currently being reviewed by an administrative law judge. If the judge upholds the denial of the state Department of Environmental Protection permit, then Greenidge will likely appeal the decision in state court. Until Greenidge exhausts all of its appeals, which could take a year or more, the Dresden plant will be allowed to continue using the expired air permit.

But its eventual mining operations at the Dresden plant could end long before that. Like other crypto mining companies, Greenidge has been hit hard by the bitcoin price crash.

On Dec. 20, the company agreed to sell most of its mining hardware to NYDIG, a creditor to whom it owes $74 million, and warned investors that it may soon have to file for voluntary bankruptcy. . Greenidge did not respond to a request for comment on this article.

The company’s stock, which was worth around $15 per share at the start of 2022, is now worth less than $1 per share, putting it at risk of being delisted from the Nasdaq.

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