Why is Illinois’ largest electric utility mining Bitcoin near one of its coal-fired power plants?
WEST ALTON, Illinois — In farmland near the banks of the Mississippi River, the state’s largest electric utility has stuffed a shipping container full of high-powered computers, in the shadow of one of its coal-fired power plants.
The project, launched quietly this year at Ameren Corp.’s Sioux Energy Center here, is a controversial experiment: Ameren built the data center to guzzle energy from the electric grid and help its power plants avoid ramping their production down and back up again, which wastes energy and stresses the plants.
But the company needed something for the computers to work on. So Ameren devised a task for the servers: “Mine” for Bitcoin, the polarizing digital currency now on a Wall Street tear.
The work is novel. Experts are unaware of other regulated U.S. utilities mining cryptocurrencies. Ameren said the company believes it is “one of, if not the first in the country” to perform the activity.
If successful, the experiment could cut power plants’ carbon emissions and make Ameren millions, both from more efficient operations and from the bitcoins themselves. The company has already collected more than 20 bitcoins, valued, as of Friday, at more than $60,000 apiece.
But critics are disconcerted. They worry the data center is a ploy to artificially heighten demand for struggling coal plants, allowing them to run more than is justified. They argue that the venture will burn more coal and pollute more, not less, all while missing opportunities to use that same energy to power other technologies, such as battery storage or electric vehicle charging stations.
Meanwhile, state watchdogs who police utility spending and consumer impacts want to ensure that ratepayers remain off the hook for costs tied to “speculative commodities, like virtual currencies.”
“Should a public utility be dabbling in cryptocurrency?” asked local Sierra Club official Andy Knott. “This seems like a bizarre activity for a monopoly public utility.”
Bitcoins — which only exist digitally, and have no physical backing, like an actual coin or bill — make up the original and most valuable set of cryptocurrencies that are acquired and exchanged using an electronic ledger on a shared network, known as a blockchain, that tracks each transaction and addition of new “coins.”
Since Bitcoin’s perceived value relies largely on scarcity, mining individual bitcoins is difficult by design. It requires that high-powered computers grind out giant numbers of math problems, or hashes, in the hope of receiving newly available coins. Globally, billions of gigahashes — meaning billions of billions of the problems — are computed every second, according to academic experts who have testified before Congress.
All that computing devours enormous amounts of energy. And it’s not just the mining for new currency: Bitcoin transactions alone can each require twice as much electricity as the average U.S. home uses in an entire month, experts say. Meanwhile, cooling the computers can create a need for even more energy, particularly in warm climates.
Bitcoin consumes more electricity than all the televisions in the U.S., according to a University of Cambridge website dedicated to Bitcoin’s energy consumption, and more energy than entire countries — even big ones, like Argentina.
‘Fill in the valleys’
Ameren says it has not increased peak power production, and that mining Bitcoin was never its original intention. It set out to use high-powered computers as a flexible and controllable electrical load. It’s not efficient, officials say, to have power plants make sudden and dramatic changes to their output. They compared it to the improved fuel efficiency that motorists see during steady highway driving, as opposed to the more demanding, stop-and-go miles in a city.