This Solar Crypto Mine Plan Is Stranger Than Fiction

This Solar Crypto Mine Plan Is Stranger Than Fiction

A Montana crypto empire wants to build out one of the nation’s largest solar projects, promising it will power a technological revolution in the state. But some residents are worried about the impact the project could have on their community–and it brings up a question of whether installing huge renewable energy projects is worth it when they come in tandem with energy-sucking industries rather than decarbonizing what’s already there.

Madison River Equity LLC, a company associated with a cryptocurrency mine, is looking to install a 647.50 ha, 12-foot (3.7-metre) tall solar array outside the city of Butte, the Montana Standard reported this week. In June, the project’s developers will take the proposal before the county’s zoning board to get approval for the $US250 ($321) million array.

This is a really, really big project. The Montana Standard reported that the installation would generate 300 megawatts a year — enough to power more than 40,000 homes in a county with only around 14,000. The entire state, according to the Solar Energy Industries Association, only had 116.8 megawatts of solar installed at the end of 2020. If built, the project would rank among some of the largest in the entire country.

Madison River Equity is a subsidiary of a company called FX Solutions, which manages a crypto mining company called Atlas Power (yes, there are a lot of layers here). The end game for the project would be for Atlas Power to buy the solar array to power its mining operations, for which it has a 75 megawatt permit from the state.

Matt Vincent, a spokesperson for the solar project, said that the Atlas Power operation has been switching from mining bitcoin, which uses power-hungry ASIC machines, to GPU processors in order to mine ethereum. Replacing their older machines with updated GPUs, Vincent said, has substantially reduced the centre’s energy rates down to 25 megawatts. The company wants to build eight new buildings filled with GPUs to get the centre back up to its full permit operating rate.

“We’re focused on the expansion of the eight buildings in the short term,” Vincent said. “There is some opportunity for additional expansion [of the facility] beyond that, but that’s not our focus.”

The hope, Vincent said, is to power the mining facility completely with the energy from the solar array, and put the remaining power on the grid, which it would work to sell to interested parties, including utilities out-of-state.

Building out one of the country’s largest solar projects in order to meet the needs of one crypto operation seems, at best, ambitious. I asked if they’d ever thought about starting smaller with the solar project.

“Obviously there’s not a decreasing demand for green energy,” he said. “We’ll be working with anyone that’s interested in selling that additional power. This project is being done to obviously allow us to expand the data centre, but it’s something that’s going to allow us to put more green energy onto the grid.”

It’s unclear exactly where the extra 225 megawatts of capacity will go, though. Vincent listed an array of possibilities from utilities with more stringent climate goals to local businesses, but it’s a lot of excess capacity that would be, for now, unspoken for. Locals have said they’re worried about the impact of the project on the view and quality of life, and they’ve also complained about the noise from fans at the mining operation.

The feasibility of the Butte project “borders on the ridiculous,” said Anne Hedges, the director of policy at the Montana Environmental Information Centre. “It’s a typical developer: They’re telling everyone what they want to hear, this is going to be all wonderful things for all people. I don’t think that that is true in any way shape or form. In communities that really need economic development, you often have this pie-in-the-sky stuff, especially from crypto miners.”

Crypto mining’s energy use problem has been well documented. If bitcoin mining were a country, an analysis by Digiconomist shows its current annual energy use would rank between the Netherlands and Pakistan (ethereum, meanwhile, sits between Peru and Portugal). Mining operations seek out cheap energy, and that often means fossil fuels.

In comparison, a crypto mine pushing a big renewable project forward doesn’t seem all that bad. But Hedges said the scale of this proposed project seems absurd in a state where utilities haven’t approved many utility-scale solar projects at all to replace fossil fuel generation for everyday energy needs. The state legislature is also currently debating eliminating portions of Montana’s renewable energy standards, including one that mandates utilities purchase renewables from local companies.

“We can’t even get renewable energy for people’s everyday lives in this state — what the hell are we doing trying to move forward with renewable energy for cryptocurrency, which is just an industry designed to enrich a very few number of people?” said Hedges.

It could also usurp any goodwill toward other renewables projects. In other states, renewable projects that would power people’s homes have faced pushed back due to NIMBY-like concerns about wind and solar blocking the view to how renewables may interfere with local industries like tourism and fishing.

Hedges’s “pie-in-the-sky” descriptor seems pretty fitting the further you dig into the wild backstory of this project. The manager of the Atlas Power facility and owner of FX Solutions, Rick Tabish, was convicted in the early 2000s for the murder of a Las Vegas casino magnate. He was acquitted after his original conviction was overturned, but served time in federal prison for related charges.

A 2019 Montana Standard profile of Tabish describes how he landed back on his feet after being released in 2010 by selling Carhartts out of the back of his truck to oil drillers in the Bakken oil fields. He switched over to crypto by 2018 when the mining operation fired up at the Atlas Power project (which was initially called CryptoWatt). A couple months after Tabish’s Montana Standard profile, he and the minority owner of the CryptoWatt mine, Kevin Washington, sued the majority owner, who had been indicted in New Jersey on charges of drumming up a $US720 ($923) million crypto Ponzi scheme with a separate company. After the case was moved to federal court, the ownership of CryptoWatt was transferred to Washington — who had to pay several million dollars to take over the mine and went $US100 ($128) million into debt installing new servers. Helped by a huge bull run on cryptocurrency in 2020 and 2021, they pressed forward, renaming the project Atlas Power.

Crypto mining has been floated by some as a new boom industry for states that are experiencing economic downturn as other jobs move away, especially places where real mining once dominated. But crypto mining isn’t physical mining; the heavy lifting is done by computer processors, not people. Bitcoin mining is also a very new and very unpredictable industry that has, to put it mildly, a pretty unreliable track record in terms of enriching communities around it. (Atlas Power only provided around 32 jobs at the beginning of 2020.)

Building out renewable energy for an industry that benefits only a few people is a tricky proposition. It becomes even more complicated when you consider what a tough sell big clean energy projects are across the country at a time when we need to be building them out to decarbonize whole existing industries that millions rely on, from commercial real estate to charging stations for electric vehicles.

“We’re using up all our goodwill towards solar on a project that doesn’t serve the needs of Montanans today,” said Hedges.

Editor’s Note: Release dates within this article are based in the U.S., but will be updated with local Australian dates as soon as we know more.

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