The owner of the nuclear power plant near Berwick is betting hundreds of millions of dollars that bitcoin digital currency is a good investment for the future and for the environment.
Talen Energy Corp., owner of the Susquehanna Steam Electric Station nuclear power plant in Salem Township, Luzerne County, is teaming up with TeraWulf Inc., a Maryland-based bitcoin mining company, to build a 200,000-square-foot bitcoin mining facility near the plant.
Talen also plans to construct an adjacent 400,000-square-foot data processing and storage facility next to the bitcoin mining facility.
The new complex is expected to utilize 12% of the electricity generated by the nuclear plant.
Bitcoin mining is done by creating strings of codes called “hashes” to solve, or decrypt, complex mathematics equations using computers known as mining rigs. Solving the puzzle is rewarded with a bitcoin. Because only 21 million bitcoins were available, and nearly 90 percent have been mined, the remaining bitcoins will grow more scarce and difficult to find. As of late August, the market price of one bitcoin was just over $48,700.
Bitcoin miners around the world generate more than 100 quintillion (that’s 100 with 20 zeroes) hashes per second, according to Blockchain.com.
Bitcoin, a digital currency not controlled by any central bank or government, is bought and sold among private investors in a bitcoin network without the need for brokers or other intermediaries.
Because the nuclear plant will power the expanse of computers creating bitcoins, the companies are promoting the venture as zero-carbon operation. The Susquehanna bitcoin mining operation will require 12 percent of the power that the nuclear plant produces.
Revenue for nuke plants
The project, and others like it around the country, also will help a sliding nuclear power industry regain some of its financial footing as it competes with natural gas, wind and solar power producers. One of the main criticisms of creating cryptocurrency concerns the carbon emissions produced by fossil fuel plants powering the operations.
“Susquehanna will provide the power to the facilities via a direct interconnection, which offers another stable source of revenue for the plant, apart from the market,” said Dustin Wertheimer, divisional chief financial officer for Susquehanna Nuclear, a division of Talen. “This is important because the current market where we sell our power, is oversupplied, leading to persistently low energy prices. Because of the oversupply in the market, we do not anticipate our project having an adverse impact to consumers or the grid, in terms of adequate supply.”
Phase 1 of the so-called Nautilus Cryptomine facility will be the construction of the 180-megawatt bitcoin mining facility on Talen’s digital infrastructure campus adjacent to its Susquehanna nuclear power plant.
Nautilus Cryptomine will be powered via a direct interconnection to Susquehanna “behind the meter,” providing the bitcoin mining operation with one of the lowest electricity costs among publicly traded bitcoin mining peers in the United States, according to Talen.
The companies plan to invest approximately $350 million to $400 million in Phase 1 of the zero-carbon bitcoin mining operation. Phase 1 will utilize 180 megawatts (MW) of power, and the terms of the joint venture with TeraWulf Inc. provides for up to 300MW of power. The Susquehanna station currently has a capacity of approximately 2,500MW.
A megawatt is a unit of electric capacity equal to 1,000 kilowatts (KW).
The data center cost will be driven by the customer, size and design of the building, Talen spokeswoman Taryne Williams said.
Talen announced the joint venture in early August.
Jobs, economic benefits
The cryptomine facility and the data center are expected to create approximately 1,000 construction jobs and 50 permanent jobs each. The companies expect the facilities will be operational as early as mid-2022.
Williams also promoted the economic benefits of the facilities.
“While we don’t know with certainty how these buildings will be assessed, based upon some research we have done, we believe that the local tax benefit for each building could be in the $1 million to $3 million range,” she said.
She added that the campus would hook up to the public water and sewer, construction crews and visiting tenants would patronize local restaurants, hotels and other businesses, and the venture is providing more revenue for the nuclear plant, which employs about 900 people. Also, there will be only minimal truck traffic to the facilities.
The data center will house data processing and storage components for cloud computing and other data applications with target tenants including Google, Microsoft, Amazon, according to Talen, which is in talks with potential tenants for the facility, Williams noted.
“The world’s increasing adoption of technology creates additional demand for energy to power these applications,” Wertheimer said. “Our data center will meet this demand by being directly connected to a 24/7 carbon-free source of power, offering one of the lowest total costs of ownership to data center tenants.”
Talen has obtained preliminary permits to develop the land for the data center and submitted land development, conditional use and building permit applications for the bitcoin facility to Salem Township. Those are pending, Williams said.
Talen is betting on the success of the bitcoin, which originally was worth just a fraction of a penny in early 2010 and currently is the most profitable of the hundreds of cryptocurrencies.
Dana Harris, associate professor of business at Keystone College in LaPlume, said the bitcoin’s market value increased 300 percent in just the past year.
However, “It’ is very, very volatile,” said Harris, who teaches economics and finance.
“A lot more companies are starting to accept it,” she said. “It’s very expensive to mine. Some don’t accept it because of using fossil fuels.”
Harris said connecting the bitcoin mining facility to a nuclear power plant is more sustainable, better for the environment and costs the company less money.
She noted, though, that the bitcoin currency is not as secure.
“The SEC (Securities and Exchange Commission) needs to control it,” she said. “It needs more regulation to get more companies to accept it.”
Harris doesn’t see bitcoin replacing the dollar, though.
“So many countries based their currency on the U.S. dollar,” she said. “I don’t see the dollar going away in my lifetime.”
If the bitcoin currency should fail, Wertheimer said the bitcoin mining facility could adapt.
“Both the data center and bitcoin mining facilities will have flexibility to adapt to their tenants’ needs,” he said. “As technologies evolve, we will be positioned to meet the changing demands and requirements.”
It’s the second bitcoin-mining venture planned to use power from a Pennsylvania nuclear power plant, The Philadelphia Inquirer reported.
Energy Harbor Corp., the former power-generation subsidiary of First Energy Corp., announced in July a five-year agreement to provide electricity to a new bitcoin mining facility operated by Standard Power in Coshocton, Ohio, according to report. Energy Harbor owns two nuclear units in Ohio and the twin-unit Beaver Valley Power Station in Western Pennsylvania, the newspaper said.