Menu Menu

Bitcoin miners are reviving dying coal plants in the US

As the US strives to decarbonise the energy industry, Bitcoin miners are becoming a thorn in its side. The enormous electricity consumption needed to sustain crypto is now fuelling a partial resurrection of coal.

Coal is no longer fashionable, but Bitcoin definitely is. The two, unfortunately, are now becoming intrinsically linked.

As investment throughout the energy sector transitions to renewables, the shutters are being pulled down on coal plants throughout the US. The continued growth of cryptocurrency, however, appears to be throwing fossil fuels something of a lifeline.

Many coal plants on the verge of closing – with some having shut down completely – are being incentivised to power the furnaces on once again, in the name of crypto mining and its insane energy consumption.

With fossil fuel plants being revived in New York, Pennsylvania, Kentucky, and Montana in the last two years solely for this reason, environmentalists are concerned digital trading may be fuelling a partial resurrection of coal.

Why is this happening now?

Up until last year, China was largely regarded as the epicentre of cryptocurrency and certainly of Bitcoin. Upon deciding to banish half the world’s crypto miners in one fell swoop, the resulting search for cheap power has seen crypto firms target struggling US power stations.

As you’ve probably heard by now, the energy required to facilitate round the clock crypto transactions is frankly ridiculous. Supercomputers running autonomous processes reportedly use 91 terawatt-hours of electricity annually, which is more than the whole of Finland gets through in a year, and encompasses 0.5% of all energy consumption worldwide.

In the context of just one reclaimed coal plant in Montana, 30,000 supercomputers are constantly running at ‘near full capacity.’ This saw 187,000 tons of carbon dioxide emitted in the second quarter of 2021 alone – 5,000% more than was expelled in the same period of 2020.

In any case, it’s not dramatic to say that in the goal of meeting global net zero targets, crypto is something of a menace. Having firmly transcended the novelty phase, a single Bitcoin is now trading at $38,059 USD and the demand for mining continues to grow year on year.

Ongoing disputes

Even early champions of Bitcoin are now starting to baulk at its energy use, including the still crypto-obsessed tech tycoon Elon Musk. Last year, he announced that his flagship company Tesla will no longer accept Bitcoin payments whilst it continues to burn coal.

Specifically, he’s waiting on ‘confirmation of reasonable (50%) clean energy usage by miners with positive future trend,’ before re-evaluating his stance.

Elsewhere, the ubiquitous ride hailing service Uber now refuses all crypto payments until the exchange’s climate impacts are reduced.

Despite regular reports showing the continued outlay of emissions, certain crypto firms argue that climate activists are blowing their environmental impact out of proportion, and the aspect of generating local jobs is being overlooked.

Fred Thiel, the chief executive of Marathon (a crypto coal plant in Montana) believes it’s become trendy to point to crypto mining as ‘the big bad boy’ and argues that the movement of physical goods is far worse. He is, nonetheless, planning to make Marathon entirely renewable by 2023.

As for the bigger picture, it remains to be seen if Bitcoin will make a conscious move away from fossil fuels on a widescale. For as long as it continues to utilise coal though, you can guarantee the business will be panned by activists.

‘We simply don’t know how emissions from Bitcoin mining will look in five to 10 years,’ says natural resource specialist Benjamin Jones. ‘It seems likely, though, it will continue to be a major consumer of energy going forward.’