Former coal power plant on Seneca Lake being used for mining cryptocurrency

(WHAM) — A former coal power plant in Dresden, on Seneca Lake, is being used for something that most people don’t even understand; mining cryptocurrency. Some see it as a much-needed boost for the region’s economy and a chance to be part of something big. But others say it poses a serious threat to the environment, and their way of life.

The Greenidge Generation plant has more than 15,000 computers, buzzing 24/7, to verify bitcoin transactions.

The company has been welcomed by some local politicians, and groups including the Yates County Farm Bureau and I.B.E.W., an electrical workers union.

But those who oppose the operation, have been passionate and vocal.

"This is an exclusive, private enterprise. Hunger game. Devoted to purely private wealth," said Ken Camera, a Geneva City Councilman.

To understand the debate, it’s important to have a basic understanding of bitcoin mining.

Bitcoin is a digital currency. There is no physical coin. Its own users take the place of banks, validating transactions on computers with specialized chips that compete to be the first to solve a mathematical puzzle. Every successful validation comes with a payoff, a bit of bitcoin. According to company filings, the Greenidge plant mined 729 bitcoins last quarter. A single bitcoin today is worth about $57,000.

But more and more, the only way to succeed is to use a lot of computers, that require massive amounts of energy. And that’s where the environmental concerns arise.

"Greenidge's efforts might not be as obvious as a landfill,” explained Rich Swinehart, CEO of Waterloo Container. “But even subtle erosion of our environment, of our natural resources, is just as threatening and just as deadly."

About 45 people work at the facility in Dresden, mostly to maintain and keep watch over the 15,300 computers there. Greenidge Generation plans to double the number of mining computers to 30,000 by the end of 2021.

Opponents are concerned that the Finger Lakes region and Western New York could become a hub for “proof of work,” the kind of crypto currency mining that they say is most dangerous to the environment.

At the Dresden facility, water from Seneca Lake is used to cool the plant, then returned back to the lake at a warmer temperature. Further, the natural gas used to power the plant emits greenhouse gases that opponents say are doing irreparable harm to air quality.

They are asking that the New York State Department of Environmental Conservation deny renewal of the plant's air emissions permit. They are also asking for a moratorium on future crypto mining until its environmental impact can be studied.

"We are hearing publicly that New York State is a target since China banned it,” said Assemblymember Dr. Anna Kelles. “Iraq banned it. Turkey banned it. Sweden just publicly asked for the EU to ban it. There's a reason that everyone is getting on board across the world to ban this."

Opponents say they are concerned that the Greenidge operation flies in the face of the Climate Leadership and Community Protection Act, passed by New York lawmakers, and signed by Governor Cuomo in 2019. Among its goals is to reduce the release of greenhouse gases by 40% by 2030, compared to 1990 levels.

Greenidge insists the company is an upstate success story, and refutes many of the claims of environmentalists, including that its use of water is raising the temperature of Seneca Lake.

A statement from Greenidge Generation to 13 WHAM News says, in part:

"Every ecological impact is carefully tracked, measured, and publicly cataloged – yet our critics cannot point to a single piece of data to support their claims of damage to the region."

The DEC is reviewing the plant's air emission permit renewal.

Statement issued Friday by DEC Commissioner Basil Seggos:

“New York State is leading on climate change and we have some major concerns about the role cryptocurrency mining may play in generating additional greenhouse gas emissions and consistency with the State’s Climate Leadership and Community Protection Act. We will carefully review the comments we’ve received on the draft permits and continue to work with the U.S. EPA, the State’s Climate Action Council, other state agencies, local government officials, and the public as we thoroughly evaluate the complex issues involved.”

Full statement from Greenidge Generation:

"The State of New York has deemed our application for renewal of our existing Title V air permit complete and the process of finalizing a renewed permit is underway. Our current permit remains in effect and our operation in Dresden will continue without interruption during this regular renewal process. Greenidge is an upstate success story. We have spent years building an unequivocal record of environmental stewardship in the Finger Lakes, eliminating coal forever, complying fully with strict air and water permits, protecting aquatic life and launching what is believed to be the nation's first and only 100 percent carbon-neutral cryptocurrency mining operation. Our critics make a lot of claims of negative impacts that do not hold up after scrutiny. This is New York; we have incredibly tight environmental regulations. Every ecological impact is carefully tracked, measured, and publicly cataloged – yet our critics cannot point to a single piece of data to support their claims of damage to the region. For decades, Upstate New Yorkers have been told they would see new industries and opportunities. We are actually making it happen, partnering with the IBEW to serve as a backbone for our local community and a new economic engine bringing a piece of the world's digital future to Upstate New York, creating high-paying jobs with more than double the average earnings of workers in Yates County and millions in new local and state tax revenue. We can pretend Bitcoin is just going to go away or accept the reality that it is here to stay and be a solution. Most mining operations drain power from the grid; we produce the power for mining ourselves pursuant to the State’s Behind the Meter Net Generation Program. That program helps strengthen system resiliency and improve grid reliability. We do it 100% carbon neutral while supplying power to the grid. In fact, 60 percent of power generated at Greenidge last year went to the energy grid. We have already reduced greenhouse gas emissions by approximately 70% at our facility thanks to permanently eliminating coal fired operations and, as part of our permit application, identified new investments with the potential to provide an additional 40% reduction in GHG emissions from our current operation. Our environmental record is indisputably strong. We look forward to working with the Department of Environmental Conservation to complete this process and continue to operate fully within the strict guidelines the Department requires.”