New York denies air permit to Bitcoin mining power plant

Photo by Silas Stein / Picture Alliance via Getty Images

The state of New York denied air permits for a gas-fired power plant used to mine digital currency. As it tries to meet its goals on climate change, New York has taken a number of steps to crack down on the use of cryptocurrencies.

The Greenidge Generating Station is located in New York. New life was brought to the plant in 2020. Some local residents were concerned about how the plant could affect fish and tourism by releasing hot water into the nearby lake. The revival of Greenidge has led to fears that pollution from the energy intensive process of mining Bitcoins could revive other zombie power plants and derail New York's climate goals.

New York state wants to slash its greenhouse gas emissions by at least 85 percent by the year 2020. The fight over Greenidge is seen as a test of how serious the state is about meeting that goal. It has boomed in New York since China kicked out miners last year. Greenidge's operations would be inconsistent with the statewide greenhouse gas emission limits established in the Climate Act.

Greenidge was a coal fired power plant. The plant was temporarily shut down as coal struggled to compete with cheap natural gas across the country. In 2020, the plant's operators spotted a more lucrative venture and started miningBitcoin, which now makes up the vast majority of the company's revenues.

Not only is it the most popular, but it uses a particularly energy-hungry security mechanism to keep its ledger accurate To verify transactions and earn new token, miners use specialized computers. If a power plant runs on fossil fuels, it will cause greenhouse gas emissions and other pollution.

The air quality permits at Greenidge expired last year, sparking a big battle over whether they should be renewed. Greenidge was supposed to serve as a peaker plant that would start up whenever the grid needed more power. When Greenidge is stressed, it can still send power to the grid, but it also runs around the clock to mine digital currency.

The operators of the plant say they are carbon neutral because they pay for carbon offsets to make up for the impact pollution has on the climate. Carbon offsets have failed to lead to reductions in CO2 heating up the planet in the past.

The state made another decision this month that prioritized climate goals over cryptocurrencies. The state legislature passed a bill earlier this month that imposed a two-year moratorium on new permits for fossil fuel power plants used to mine cryptocurrencies while the state studies their environmental impact. If Governor Kathy Hochul vetoes the bill, that will be the next litmus test of New York's commitment to climate action. Greenidge, which was grandfathered in as long as its permits were renewed, wouldn't be affected by the moratorium.

We are still looking to the governor to sign legislation that will address this issue more broadly. Elizabeth Moran is a policy advocate for Earthjustice.

Today's decision won't shut the plant down immediately. The decision will be appealed and Greenidge will continue to operate. For as long as it takes to successfully challenge the decision, the company can continue to run under the Title V Air Permit.