A New Threat to New York’s Clean Energy Goals: Bitcoin Mining
Greenidge power plant in Dresden, New York. | Greenidge

A New Threat to New York’s Clean Energy Goals: Bitcoin Mining

A Finger Lakes power plant plans to ramp up energy-intensive Bitcoin mining. If the state allows it to proceed, environmentalists warn dozens of fossil-fueled plants could follow.

A decade ago, the bankrupt owner of the Greenidge power plant in Dresden, New York, sold the uncompetitive coal-fired relic for scrap and surrendered its operating permits.

For the next seven years, the plant sat idle on the western shore of Seneca Lake, a monument to the apparent dead end reached by the state’s fossil fuel infrastructure.

But today, Greenidge is back up and running as a Bitcoin mining operation. The facility hums with energy-hungry computers that confirm and record Bitcoin transactions, drawing power from the plant’s 106-megawatt generator now fueled by natural gas.

The mining activity is exceptionally profitable, thanks to an 800 percent rise in Bitcoin’s price since last April. Seeking to ride the boom, the plant’s new owners plan to quadruple the power used to process Bitcoin transactions by late next year.

Environmental advocates view Greenidge’s ambitions, if left unchecked, as an air emissions nightmare.

And they fear that dozens of other retired or retiring fossil-fueled power plants across New York could follow Greenidge’s example, gaining new life by repurposing as Bitcoin miners or other types of energy-intense data centers.

Greenidge’s pending applications to renew its air emissions permits promise to bring the issue to a head. 

Judith Enck, a former regional administrator for the U.S. Environmental Protection Agency, believes the state’s stance on those permits will reflect how committed the administration of Gov. Andrew Cuomo is to the Climate Leadership and Community Protection Act, a landmark 2019 law requiring the state to dramatically slash air pollution.

“Greenidge is a test for the Cuomo Administration as to how serious they are or are not about achieving greenhouse gas reduction goals,” Enck said.

In a letter sent to Governor Cuomo last week, the environmental law group EarthJustice and the Atlantic Chapter of the Sierra Club warned that nearly 30 other upstate New York power plants could be converted to run full-time as data centers, with catastrophic consequences for statewide CO2-equivalent emissions.

Michael McKeon, a spokesman for Greenidge, dismissed those concerns. 

“This group has flailed around trying to find anything to oppose our environmentally-sound operation for years; nothing has worked because their claims have no legal or factual basis,” McKeon said in reference to the Sierra Club’s previous unsuccessful efforts to overturn Greenidge permits in court.

“No room for a massive expansion”

Atlas Holdings, a Greenwich, Conn. private equity firm, bought the plant in 2014 and converted it to burn natural gas rather than coal before restarting it in 2017. Over the next two years, the plant’s focus gradually shifted from providing intermittent power to the grid to processing Bitcoin transactions.

Bitcoin is a digital currency without a central storage location, like a bank, where transactions are recorded. Instead, the data ledger is distributed to a network of computers worldwide. Miners are rewarded with Bitcoin when their computers validate and record network transactions.

While Bitcoin processing is extremely power intensive, it has also become immensely profitable as its price has risen from $3,729 in December 2018 to more than $62,000 this week.

Now Atlas sees a chance to capitalize on Bitcoin’s soaring value by taking the operation public. In a planned reverse merger announced last month, Greenidge Generation Holdings LLC expects to be trading as a NASDAQ stock by September, with Atlas retaining a majority interest.

In touting the deal to potential investors, the Greenidge team described the plant as a national model. Their stated plan was to expand it 25-fold — using at least 500 megawatts of power in Dresden and elsewhere — by 2025.

Cornell University biochemist Robert Howarth—one of 22 members on the state’s Climate Action Council, which is charged with developing the plan to meet CLCPA targets—said the planned expansion isn’t compatible with New York’s clean energy goals.

“There really is no room for a massive expansion of fossil fuel use in any sector, let alone one with so little true value to New York as represented by a cryptocurrency,” Howarth said.

Howarth noted that the law requires a 40 percent reduction in greenhouse gas (GHG) emissions by 2030, a difficult target to meet even without the data center threat.

Last year, Greenidge’s GHG emissions were far below the plant’s annual allowance of 641,000 tons of CO2-equivalent gasses. But as Greenidge ramped up Bitcoin transaction processing throughout 2020, its rolling 12-month GHG emissions average soared nearly tenfold, from 28,000 tons in January to 243,000 tons in December.

Greenidge told potential investors on  March 22 that its mining machines were drawing 19 megawatts of power — less than one-fifth of the plant’s permitted output capacity. The company told potential investors that would rise to 41 megawatts by June 30 and to 85 megawatts by the end of next year.

The more energy generated, the more emissions rise. EarthJustice has estimated that if the plant runs near its full capacity, its CO2-equivalent emissions will soar to 1.063 million tons a year, 65 percent above its current permit.

Greenidge applied last month to renew its current air permits, which expire in September. Conor McMahon, the governor’s Finger Lakes representative, said the state Department of Environmental Conservation (DEC) is reviewing the applications for completeness before developing drafts for public consideration.

In a statement to New York Focus this week, a DEC spokesperson said: “DEC strictly oversees Greenidge Generation’s operations and its compliance with requirements to protect public health and the environment.  This facility is currently operating in compliance with its DEC permits.”

 

Former regional EPA administrator Judith Enck

Enck, who as a federal EPA administrator skirmished with the DEC for months over Greenidge’s current Title V air permit, said the DEC often takes a year or more to consider an application for a permit renewal.

DEC is under little pressure to complete its review and formally renew the Title V permit by September. State administrative law allows a company to operate under an expired permit if its renewal application is filed on time and is under agency consideration. 

“So, the question is,” Enck said, “would DEC allow them to emit more while they consider a modification to the Title V permit?”

Howarth said the DEC is in an awkward spot because the Climate Action Council hasn’t yet delivered its draft plan for meeting CLCPA requirements. That’s due later this year. 

“But I believe they should do all they can in the meantime to make decisions that are consistent with CLCPA,” Howarth added.

A Regulatory Helping Hand

The Cuomo administration hasn’t allowed expired permits to slow Atlas in the past. Four years ago, the DEC gave Greenidge the green light to restart nearly a year before it formally approved up-to-date water discharge and intake permits.

That relaxed approach to water regulation was one of a series of accommodations the Cuomo Administration made to enable Atlas to rescue, convert, restart and repurpose the Greenidge plant.

The DEC waived an environmental impact statement for the plant’s restart; excluded the plant’s coal ash landfill from its environmental review of the restart; and granted the plant five years to fully comply with federal Clean Water Act regulations on water intake screens to protect aquatic life in the lake.

During the months these concessions were being hammered out, Atlas Holdings and its co-managing partners, Andrew Bursky and Timothy Fazio, contributed $120,000 to Gov. Cuomo’s re-election campaigns. Meanwhile, Greenidge paid a Cuomo-friendly lobbyist’s firm more than $500,000.

A spokesman for Cuomo did not return emailed questions about whether those expenditures by Atlas influenced regulatory decisions.

Efforts by Atlas representatives to influence state and local officials date back to 2013—nine months before Atlas bought Greenidge—when an attorney asked the DEC to allow Greenidge to avoid regulation under EPA’s strict “new source review” standard. 

The DEC flirted with that softer stance until Enck sent a letter in 2015, demanding “new source” treatment.

Atlas had hired Mercury Public Relations, McKeon’s firm, in March 2014. McKeon, who had served as executive director of Republicans for Cuomo in his 2010 campaign, took the lead role on the Greenidge account.

During the nearly two-year period that Mercury collected $20,000 a month from Atlas, the firm achieved several wins for its client, including a consent agreement for the plant’s coal ash landfill and a pair of  Favorable PILOT (payment-in-lieu of taxes) deals with the Yates County Industrial Development Agency for the plant and a new 4.6-mile natural gas line pipeline that serves it. 

In 2020, Greenidge paid a total of $146,150 to Yates County, the Town of Torrey and the Penn Yan School District on the plant and pipeline PILOTs. That was only 15 percent of the total $968,006 paid to the same entities by AES Greenidge in 2010 before it closed the plant and filed for bankruptcy. 

Records show Mercury’s McKeon and Cassie Prugh, a former Cuomo aide, had lobbied Yates officials in the fall of 2015 as the PILOTs were being negotiated.

In December 2015, the final month of Greenidge’s $20,000-per-month retainer agreement with Mercury, the Cuomo Administration announced a $2 million grant in support of Atlas’ restart of the plant.

That gift of state taxpayer money was sufficient to cover all campaign contributions from Atlas officials, all Greenidge lobbying payments to Mercury and roughly a decade of plant and pipeline PILOT payments to local entities.

$50,000 Profit Per Coin

Keeping expenses in check was particularly important to Greenidge after the market for the energy it offered for sale on the grid began to dry up. The plant’s capacity factor—a measure of how much energy it generates as a proportion of the maximum amount it could produce—dropped from 17.8 percent in 2017 to just 6 percent in 2019, according to NYISO Gold Book data.

If the expansion is allowed to proceed, that number could rise dramatically.

“Clearly, under the Greenidge cryptocurrency proposal, this inefficient fossil fuel plant will be operating at a significantly higher capacity factor, resulting in a marked increase in greenhouse gas emissions,” Irene Weiser, coordinator of Fossil Free Tompkins, wrote to the PSC last June.

Weiser warned that Greenidge could be the first of host of new air emission threats, given that “multiple data center projects are being proposed at old power plant sites in upstate New York, each with significant load projections.” 

Data centers are needed by multiple industries and do not necessarily involve Bitcoin. But mining the cryptocurrency is especially attractive today, given its skyrocketing price.

The Greenidge team told potential investors last month that the plant had mined 1,186 bitcoins at an average net cost of about $2,869 for the 12 months ending in February. At this week’s Bitcoin price, that would translate into a profit margin of about $60,000 per mined coin.

Greenidge is currently seeking local approval to build four buildings adjacent to the plant, which would house new mining machines.

When the trustees of the Village of Watkins Glen considered a resolution in support of a moratorium on expanding the Bitcoin operation in Dresden last week, the manager of the plant, Dale Irwin, told them that the authors of the resolution had “zero credibility” and that “there is zero evidence that the facility affects the air quality in the region.”

In Albany’s Times-Union newspaper, Greenidge recently won notice as “a model for innovation” in an opinion column by Gavin Donohue, executive director of the Independent Power Producers of New York.

Donohue, another of the 22 members of the state’s policy-shaping Climate Action Council, noted that the plant will continue to supply some power to the grid even as an increasing share of its generated power goes to process Bitcoin. He wrote that the plant has “demonstrated to other generators the possibilities that exist for them in the 21st-century economy.”

Donohue declined to respond to emailed questions.

Whether Greenidge’s model can be reproduced at other fossil fuel plants in New York may depend not only on DEC air emission decisions, but also on how the Public Service Commission regulates “behind-the-meter” energy produced by power plants.

The PSC granted Greenidge a certificate of public convenience and necessity to sell generated power on the grid in 2016. Last summer, the PSC voted unanimously to rule that Greenidge’s Bitcoin operation was outside its jurisdiction because the energy it used never reached the grid. 

John B. Howard, interim chair of the PSC and another member of the Climate Action Council, voted for the 2020 ruling but also offered a warning that the case may set a dangerous precedent. “High-load data servers running on fossil generation, I don’t think is a very good long-term play,” he said at the time.

Turning a Blind Eye

As Greenidge seeks a local permit to add four new buildings to house Bitcoin processing servers, the DEC has allowed the Planning Board of the Town of Torrey, population 1,241, to conduct the environmental review.

By declining to exercise its legal right to step in as lead agency in the environmental review, it acquiesced to the decision by Torrey officials to skip an environmental impact statement—again.

Meanwhile, the Committee to Preserve the Finger Lakes has sent letters to Cuomo signed by several hundred businesses and individuals protesting Greenidge’s “reckless” Bitcoin mining operation.

Last September, the group asked DEC to suspend, revise or revoke Greenidge’s permits. The DEC rejected the request a month later, stating that “the facility is in compliance with the terms and conditions in all permits.”

The DEC has never analyzed for a Greenidge permit whether the plant’s daily discharges of tens or millions of gallons of warmed water tend to promote toxic algal blooms.

Several blooms within two miles of Dresden since 2015 have exceeded the DEC’s threshold for “high toxin.” 

Irwin, the plant manager, has repeatedly denied any link. But Gregory Boyer, a biochemist at SUNY-ESF and an expert in algal blooms, has stated in sworn affidavits that warmed waters from the plant are likely to increase the chance of blooms in Seneca Lake around Dresden.

The DEC argued in legal briefs that a judge should discount Boyer’s affidavit on the grounds that it was not filed on time. Last year, DEC discontinued its funding of toxicity tests for suspected algal blooms.

Gas plant in Newburgh tests limits of NY’s landmark climate law
Gas plant in Newburgh tests limits of NY’s landmark climate law
Can New York meet its emissions goals if it green-lights more fossil fuel infrastructure? A proposal to rebuild a fracked-gas plant will set the precedent....

By

Health Care Costs for Retired City Workers Could Dramatically Increase Under City Plan
Health Care Costs for Retired City Workers Could Dramatically Increase Under City Plan
A quarter million retired city workers could be left with bigger health insurance bills and fewer doctor choices under a city plan to change their health insurance....

By

A New Threat to New York’s Clean Energy Goals: Bitcoin Mining
A New Threat to New York’s Clean Energy Goals: Bitcoin Mining
A Finger Lakes power plant plans to ramp up energy-intensive Bitcoin mining. If the state allows it to proceed, environmentalists warn dozens of fossil-fueled plants could follow....

By

Thousands of New Yorkers are in Prison for Life. These D.A. Candidates Want to Change That
Thousands of New Yorkers are in Prison for Life. These D.A. Candidates Want to Change That
Manhattan D.A. candidates vow to reduce lengthy sentences—but sharp differences between their approaches remain...

By

What Made It Into The Budget – And What Was Left Out
What Made It Into The Budget – And What Was Left Out
The major provisions of New York's 2021 budget....

By , and

Homelessness Priorities Won’t Make the State Budget, Lawmakers and Advocates Say
Homelessness Priorities Won’t Make the State Budget, Lawmakers and Advocates Say
“A year from now, this money will still be in the hands of Governor Cuomo, unused - and that’s exactly what he wants.”...

By

“A byzantine and high-bar system”: Governor pushes to saddle undocumented workers fund with documentation requirements
“A byzantine and high-bar system”: Governor pushes to saddle undocumented workers fund with documentation requirements
State lawmakers and workers' rights advocates warned that burdensome proof-of-employment requirements may mean the funds go unspent....

By

Will New York’s Rent Relief Program Address The Problems that Hobbled The Last One?
Will New York’s Rent Relief Program Address The Problems that Hobbled The Last One?
Governor Andrew Cuomo is pushing to impose stringent requirements, according to lawmakers and tenant advocates, that could delay and decrease aid....

By

Where are the Safe Injection Facilities Cuomo Promised for New York?
Where are the Safe Injection Facilities Cuomo Promised for New York?
He committed three years ago to supporting safe injection sites for drug users — then reversed course, activists say. Now, they see a new chance to pressure the embattled governor....

By

Legislature Seeks to End “Arbitrary Limit” on Medicaid Spending
Legislature Seeks to End “Arbitrary Limit” on Medicaid Spending
A 2011 rule prevents New York from adequately funding Medicaid, advocates say. This year’s budget could see it repealed. ...

By

Will Rental Vouchers to Prevent Homelessness Make the State Budget?
Will Rental Vouchers to Prevent Homelessness Make the State Budget?
The legislature is pushing for a statewide rental assistance program that advocates say would be one the largest efforts to combat homelessness in recent memory....

By

New York’s biggest climate problem—and opportunity
New York’s biggest climate problem—and opportunity
Buildings may be New York’s top source of emissions. The state should follow the city’s lead in cleaning them up....

By

In an Upstate Jail, Incarcerated People Struggle to Access Promised Addiction Treatment
In an Upstate Jail, Incarcerated People Struggle to Access Promised Addiction Treatment
In 2019, Broome County promised an addiction treatment program in its jail. Two years later, the program is a “farce,” one advocate said. ...

By

Records Reveal New York’s Growing Mountain of Water Debt
Records Reveal New York’s Growing Mountain of Water Debt
Advocates are pushing the legislature to extend and strengthen a moratorium on water shutoffs set to expire at the end of the month....

By

Legislative Leadership to Propose $7 Billion in New Taxes, Sources Say
Legislative Leadership to Propose $7 Billion in New Taxes, Sources Say
Tax-the-rich advocates critiqued the figure as too low, and also said the Assembly is significantly behind the Senate on key progressive spending priorities....

By

Queens Public Defenders Win Unionization Vote
Queens Public Defenders Win Unionization Vote
After months of conflict involving alleged intimidation and potentially illegal firings, workers at Queens Defenders voted overwhelmingly to unionize....

By

“It Damages Democracy:” Watchdogs, Reporters, Slam “Non-Functional” Board of Elections Campaign Finance Website
“It Damages Democracy:” Watchdogs, Reporters, Slam “Non-Functional” Board of Elections Campaign Finance Website
Flaws in an updated website make it extremely difficult to track who is funding campaigns, journalists and watchdogs say, but the BOE insists that “the site is fully functioning.” ...

By

Will New York allow incarcerated people to access treatment for drug addiction?
Will New York allow incarcerated people to access treatment for drug addiction?
"People in prison deserve healthcare, and this is healthcare.” Legislators push to offer treatment for drug addiction in jails and prisons...

By

“Mired in Incrementalism”: Climate Action Council Proceedings Alarm Climate Advocates
“Mired in Incrementalism”: Climate Action Council Proceedings Alarm Climate Advocates
Under New York's climate law, the Climate Action Council is tasked with devising a plan to zero out emissions. Environmentalists on the Council say it's not on track....

By

In Manhattan D.A. Race, Momentum Builds to Decriminalize Sex Work
In Manhattan D.A. Race, Momentum Builds to Decriminalize Sex Work
In a striking sign of activists' success, most candidates running in the June election for DA say they would not prosecute cases involving consensual sex work....

By

“We Need to Hold Him Accountable”: After Sexual Harassment Allegations, Legislators Search for Ways to Respond
“We Need to Hold Him Accountable”: After Sexual Harassment Allegations, Legislators Search for Ways to Respond
With the state ethics commission widely seen as controlled by the governor, legislators are looking for other ways to investigate the allegations....

By

Top state lawmakers oppose Cuomo’s push to override NYC’s landmark climate law
Top state lawmakers oppose Cuomo’s push to override NYC’s landmark climate law
A new analysis finds that the governor’s proposal would “completely undermine” New York City’s climate law, setting the stage for a clash with the newly emboldened legislature....

By

As State Support Dwindles, New York’s Overdose Crisis is Only Getting Worse
As State Support Dwindles, New York’s Overdose Crisis is Only Getting Worse
State withholds have left harm reduction providers undersupplied, and informal overdose prevention networks are struggling to fill the gap....

By

Queens Defenders Fires Two Pro-Union Employees
Queens Defenders Fires Two Pro-Union Employees
Amid an ongoing union election at the Queens indigent defense law firm, two outspoken union supporters were fired without warning....

By

“It’s a life or death situation out here”: a brutal winter for unsheltered New Yorkers
“It’s a life or death situation out here”: a brutal winter for unsheltered New Yorkers
“We sleep together like chickens”: Street homeless New Yorkers describe the struggle to endure the pandemic-era winter....

By

Will Manhattan’s Next D.A. Break Ranks With Tough-on-Crime Colleagues?
Will Manhattan’s Next D.A. Break Ranks With Tough-on-Crime Colleagues?
Three candidates in the June election say they would not join the association of state DAs, which has fought measures such as bail reform....

By

“What am I to do?” An oral history of mothering children in online school
“What am I to do?” An oral history of mothering children in online school
“I’m the security guard, a mother, a father, a teacher, I’m everything." Parents and children reflect on a year of remote learning and its impact on their finances, mental health, and family....

By

Will New York Decriminalize Syringe Possession in 2021?
Will New York Decriminalize Syringe Possession in 2021?
Amid dramatic spikes in drug overdoses and HIV cases, legislators and public health professionals push for New York to decriminalize sterile syringes. ...

By

Cuomo’s Tax Hike Friendlier to the Rich Than Advertised, Budget Experts and Legislators Say
Cuomo’s Tax Hike Friendlier to the Rich Than Advertised, Budget Experts and Legislators Say
"The governor’s twisting himself in knots to not offend rich people,” the number two Democrat in the state Senate said....

By

Tali Farhadian Weinstein’s Run for Manhattan D.A. Fueled By Wall St Megadonors, Filings Show
Tali Farhadian Weinstein’s Run for Manhattan D.A. Fueled By Wall St Megadonors, Filings Show
A leading candidate for Manhattan DA has raked in two thirds of her campaign funds from five-figure donations—many from financial industries she would be in charge of prosecuting....

By

NYC Plans to Import Canadian Hydropower. Who Really Benefits?
NYC Plans to Import Canadian Hydropower. Who Really Benefits?
A planned transmission line from Canada is meant to reduce NYC's fossil fuel dependence. But First Nations say the project ignores them - and New York environmental advocates say it won't even benefit...

By

Progressives Slam State Senate Finance Secretary Pick
Progressives Slam State Senate Finance Secretary Pick
Democratic leadership appointed David Friedfel, the top state policy analyst at the Citizens Budget Commission, to a key staff position in budget negotiations....

By and

The Next Mayor Must Launch a Green New Deal for NYC
The Next Mayor Must Launch a Green New Deal for NYC
Here are the policies candidates for Mayor and Council must commit to enacting if they're serious about a Green New Deal for New York City....

By

Queens Public Defenders Push to Unionize. Management Calls Them a ‘Mob.’
Queens Public Defenders Push to Unionize. Management Calls Them a ‘Mob.’
A wave of legal aid attorneys are joining the labor movement. But bosses say it’s bad for business and the unions just want to collect their dues....

By

Tenants Can’t Pay Rent. Landlords Won’t Pay Bills. What Happens Next?
Tenants Can’t Pay Rent. Landlords Won’t Pay Bills. What Happens Next?
New York’s looming foreclosure crisis could lead to massive corporate windfalls - or to large-scale social housing conversions. The choice is ours....

By

New York Must Stop All Evictions. It’s a Matter of Life and Death.
New York Must Stop All Evictions. It’s a Matter of Life and Death.
New York must immediately reinstate a complete eviction moratorium, incoming DSA legislators argue, because you can’t stay at home if you’re forced out of it....

By and

Senate Proposes $4 Billion December Revenue Package, but Assembly Won’t Go That High, Sources Say
Senate Proposes $4 Billion December Revenue Package, but Assembly Won’t Go That High, Sources Say
The Senate has proposed raising $4 billion in revenue before the end of the year, but the Assembly is unwilling go much higher than $2 billion, sources say....

By

Assembly Speaker Heastie May be Holding Up Blanket Eviction Moratorium, Despite Senate Consensus
Assembly Speaker Heastie May be Holding Up Blanket Eviction Moratorium, Despite Senate Consensus
Sources both inside and outside the legislature say Assembly Speaker Carl Heastie is pushing back against the Senate Democrats' proposal for a blanket moratorium....

By

The D.A. Election That Could Reshape New York City’s War On Drugs
The D.A. Election That Could Reshape New York City’s War On Drugs
The office of the Special Narcotics Prosecutor is on the chopping block in Manhattan's 2021 DA race....

By

Inside Upstate New York’s Lead Poisoning Crisis
Inside Upstate New York’s Lead Poisoning Crisis
Many upstate cities don't test old houses for lead poisoning until after children have already tested positive. A new bill would change that....

By

Subscribe to our Newsletter!

Be the first to hear about our stories - and get a nugget of NY history each week!