ITHACA, N.Y.—The New York State Department of Environmental Conservation (DEC) is holding virtual public hearings on Wednesday, Oct. 13, regarding the renewal of Greenidge Generation LLC’s air permits, a natural gas-fired power plant doubling as an industrial scale bitcoin mining operation—a business model that has been called incompatible with New York’s climate goals.
And that argument seems to have the DEC’s attention. On Sept. 8, DEC Commissioner Basil Seggos tweeted that Greenidge “has not shown compliance” with New York’s Climate Leadership and Community Protection Act (CLCPA), and that a final determination has not been made on renewing the plant’s permits.
Greenidge Generation is located on the west shore of Seneca Lake, in the town of Dresden. Since Greendige began burning fossil fuels for cryptocurrency in late 2020, environmental advocates and organizations, like Seneca Lake Guardian, have been pushing the point that bitcoin mining doesn’t adhere to the goals outlined in CLCPA, which aims to reduce New York’s greenhouse gas emissions by 85 percent by 2050.
Although the CLCPA assessments have only modified standards for new state facilities seeking permits. Greenidge is applying to renew their air permits, and believes they are compliant with New York’s climate laws.
Mining bitcoin is complicated
Bitcoin mining is an energy intensive and complicated process.
“Miners” use specialized computers and software to contribute processing power to a blockchain network. It’s a decentralized system in which bitcoin transactions are validated and secured through many individuals, rather than a third party like a bank. Each individual miner participates in authenticating transactions as they compete to unlock new bitcoin. The more miners there are, then the more energy is used in authenticating, and the more energy that’s needed for miners to compete for bitcoin.
This method of securing transactions is known as a proof-of-work blockchain. It is the most energy intensive system of validating cryptocurrency transactions and rewarding miners.
According to estimates from the Digiconomist’s Bitcoin Energy Consumption Index, a single bitcoin transaction uses 1785.670 kWh of electricity, which could power an average U.S. household for over 60 days.
Greenidge Generation LLC aims to have over 41 MWh of mining capacity at its Dresden facility by the end of the year. A megawatt hour (MWh) or a kilowatt hour (kWh) is a unit of energy sustained over an hour. The average annual electricity consumption for a residential utility customer in the U.S. is 10.715 MWh, according to the U.S. Energy Information Administration. If Greenidge’s near-term goal of a 41MWh mining capacity were annualized, it would be enough energy to keep around 33,500 U.S. homes powered for an entire year.
Based on calculations from Earthjustice and Sierra Club, Greenidge’s plant generating that much energy would put around 410,000 tons of CO2eq into the atmosphere a year. The City of Ithaca is estimated to put around 440,000 tons of CO2 into the atmosphere a year.
The air permits under review by the DEC allow Greenidge’s annual emissions to reach up to 641, 878 tons of CO2eq. Before coming online as a bitcoin mining plant, Greenidge was what’s known as a “peaker plant,” serving electricity demands intermittently when demand surged on the grid, although this “peaker” role is not outlined in any of their permits.
As criticisms of Greenidge’s carbon heavy bitcoin mining mounted throughout 2021, the plant has has moved to brand itself as a green energy company. In June, the company said that it achieved carbon neutrality in it’s bitcoin mining operation through the voluntary purchase of carbon offsets.
In a press release from Sept. 9th, Greenidge Generation called the targets outlined in the CLPCA, “…important statewide targets…We support those goals at Greenidge and will continue to do our part to help the state meet them.”
The worry of environmentalists is that Greenidge could serve as a model for others. Earthjustice and the Sierra Club identified 30 other power plants in New York state that could be converted to cryptocurrency mining facilities in the style of Greenidge. The potential carbon emissions motivated Assemblymember Anna Kelles to introduce a bill to the New York state legislature that would put a moratorium on proof-of-work cryptocurrency mining. It passed in the state senate, but it did not make it through the assembly before the legislative session closed.
Greenidge did not immediately respond to a request for comment from The Ithaca Voice. They were asked to provide a response to the DEC Commissioner Basil Seggos comments that their operations were not in compliance with the CLPCA on Twitter.
The opportunity to participate in Wednesday’s period hearing has closed, but the DEC will accept written comments until Oct.22.