A US power plant has found a novel way to hedge against fluctuations in energy prices – by mining Bitcoin on the side. As Bloomberg reports, the Greenidge Generation plant in New York’s Finger Lakes region has recently upgraded its Bitcoin mining enterprise following a successful trial, to the point where it now has 7,000 ASIC miners working away at its 65,000-square-foot facility in Dresden.
From Coal to Gas to Bitcoin
Greenidge, a former coal power station built in 1937, was decommissioned in 2011 but converted to a natural gas plant and reopened in 2016, once more supplying electricity to the region.
The owners, Atlas Holding LLC, realized that some of the electricity they generated could be made more profitable by using it to mine Bitcoin and Bitcoin Cash, with 15 megawatts of the 106 generated daily going towards the enterprise.
Low Cost Mining
Greenidge uses so-called ‘behind-the-meter’ power, which simply means power the site is generating by itself and not paying for, allowing the company to mine at a very low cost. The plant now runs 24/7 after initially only operating at peak times, with its mining equipment now able to generate ₿5.5 per day, currently worth $50,000, or over $18 million a year at current prices.
Greenidge’s Chief Financial Officer, Tim Rainey, told Bloomberg that the plant is well placed to take advantage of a reduction in more traditional mining operations following the halving, which will see miner’s profits cut in half:
We are in a favorable market position regardless of how the halving materializes. Due to our unique position as a co-generation facility, we are able to make money in down markets so that we’re available to catch the upside of volatile price swings.
Diversity is the Future of Bitcoin Mining
Low cost, energy-efficient Bitcoin mining is becoming increasingly common, as new entrants into the mining game use natural resources to their advantage to reduce their overheads.
Greenidge is in the enviable position of not just having state of the art equipment and low overheads but also not being reliant Bitcoin mining as their chief revenue source. This will likely see them outlive more established mining farms that, following the halving in May, will suddenly be struggling to make ends meet.