How Crypto Is Keeping Coal Power Plants Alive
How Crypto Is Keeping Coal Power Plants Alive
According to a recent report, crypto mining is responsible for 25-50 millions tons of CO2 emissions in America
In 2020, Scrubgrass Generating Plant, a power plant in Pennsylvania, was about to close. Like many coal power plants in America, Scrubgrass was struggling to compete with the influx of cheap solar and wind power. Then Stronghold Digital Mining, a publicly-traded cryptocurrency company, came to town. Within a year, its annual emissions rose from 12,000 to 500,000 tons of carbon dioxide, a staggering 3805% increase.
Scrubgrass isn’t the only coal power plant that has been saved by the crypto industry recently either.
In North Dakota, Coal Creek Station — one of the biggest coal power plants in the country — was set to close by 2022. As the Washington Post’s Joshua Partlow wrote earlier this year:
Coal Creek Station had lost $170 million in 2019 as abundant natural gas and proliferating wind projects had cut revenue far below what it cost to run the plant. After four decades sending electricity over the border to Minnesota, Coal Creek would be closing in 2022, Saggau said, and nobody was clamoring to buy it.
In 2019, the same year that Coal Creek Station lost $170 million, it produced roughly 10 million tons of carbon pollution. Coal Creek’s closure would be bring that number to zero. But then, Rainbow Energy cut a deal to buy the struggling plant and mine cryptocurrency. Instead of closing in 2022, the plant will continue to emit 10 million tons of CO2 per year.
In Montana, Hardin Generating Station was set to close in 2020. Then Marathon Digital came along and its CO2 emissions went from ~80,000 tons to ~750,000 tons.
Last year, in Kentucky, two of the biggest coal plants — Robert D. Green Station and D. B. Wilson Station — were rescued by a crypto mining company. According to the EPA, the two plants' combined emissions totaled roughly 6.5 million tons of CO2 in 2021. Earlier this year, the crypto mining company, Blockware, signed a 20 year power purchase agreement with the power plant’s owner.
In Indiana, Merom Generating Station was on track to close by 2023. But then AboutBit signed a deal with its owner to use the plant’s electricity to mine crypto. The plant will continue to emit 6 million tons of CO2 per year indefinitely.
So how much pollution are all these mines putting into the atmosphere? According to a recent report by Earth Justice and Sierra Club, a lot:
Top-down estimates of the electricity consumption of cryptocurrency mining in the United States imply that the industry was responsible for an excess 27.4 million tons of carbon dioxide (CO2) between mid-2021 and 2022 — or three times as much as emitted by the largest coal plant in the U.S. in 2021.
The Biden administration puts that figure even higher. According to their estimates, crypto mining is responsible for 25-50 millions tons of CO2 emissions across the country. Globally, it's responsible for 110-170 millions tons. To put that in perspective, all the countries in Central America combined emitted about 170 million tons of CO2 last year.
There are a lot of people out there that will tell you crypto doesn't have any practical use cases. This is nonsense. It has been remarkably effective at keeping America's coal power plants alive and pumping carbon into the atmosphere.