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NY gas plant adds cryptocurrency mining units

A gas-fired power plant in upstate New York has a new feature — the ability to mine digital currencies such as bitcoin.

Atlas Holdings LLC subsidiary Greenidge Generation LLC said it has successfully added to the 106-MW Greenidge power plant 7,000 units of cryptocurrency mining hardware. The site is a "unique and ideal" location to mine digital currencies, as it comes with a team of cryptocurrency experts and power plant operators, along with access to cheap natural gas, Greenidge Generation said in a March 5 news release.

"A power plant generating electricity behind the meter to energize its very own mining operation allows investors to tap the profitability of not only cryptocurrency markets but also energy markets," Kevin Zhang, director of blockchain strategies at Greenidge Generation, said in a statement. The mining units use about 14 MW of the plant's capacity, according to the company.

The Greenidge facility is one of several coal plants idled in 2011, after which it was sold to Atlas Holdings. The plant came back online in 2017 following its conversion to natural gas. The facility uses biomass as a secondary fuel and operates as a merchant plant with no power purchase agreement.

According to S&P Global Market Intelligence data, the plant in 2018 had a capacity factor of 20.43%

Dale Irwin, CEO of Greenidge Generation, told S&P Global Market Intelligence in an e-mailed statement that with its conversion to natural gas, the plant has the capability to run throughout the year.

"However, given current and projected demand levels from the state's energy grid, we believed there may be additional opportunity to utilize the facility's unique attributes to strengthen the company and the regional grid, and create a more valuable economic driver for our region," he said. "After running some test pilots, we identified cryptocurrency mining as a unique pathway for growth. We are now able to run profitably and generate value for our workforce and investors throughout the year."

Because mining digital currencies comes with high electricity demand, cryptocurrency operators look for low-cost electricity to help them survive in the competitive industry. In recent years, operators have looked to utilities in North America with access to cheap hydropower. That high level of interest has prompted some utilities to temporarily hold off on connecting cryptocurrency miners to the system or set new rate structures for those customers.

Some see an opportunity with this new demand, including Canadian utility Hydro-Québec, which has started on an incentive strategy to attract data centers and cryptocurrency operators to the province.