Bitcoin mining operation to add flexible load to NPPD’s area
March 17, 2021
by Peter Maloney
March 17, 2021
Compute North is expanding its operations in Kearney, Nebraska, potentially adding as much as 70 megawatts (MW) to Nebraska Public Power District’s (NPPD) load.
The Eden Prairie, Minn.-based company, which provides energy-intensive computing capacity for blockchain, cryptocurrency mining, and other clients with high-performance computing needs, already has a 30-MW computing facility in Kearney’s Tech oNE Crossing technology park.
The expansion deal has been in the works for a little over a year, and “it’s finally coming to fruition,” Pat Hanrahan, general manager of NPPD’s retail division, said. “It is pretty exciting.”
Compute North said it chose the Kearney location for its “direct access to a variety of primarily renewable energy sources.” Nebraska, the only state in the union that is served entirely by public power, gets about 61 percent of its electric power from carbon dioxide free sources.
Another part of the attraction are the electric rates NPPD can offer, Hanrahan said. Nebraska has below average electric rates, ranking 15 in the nation, according to government data. NPPD also has economic development rates for new customers and other rate products that make the area “pretty attractive,” Hanrahan said.
The deal to expand Compute North’s operations was also facilitated by support from the Economic Development Council of Buffalo County – Kearney is the county seat – and the City of Kearney, and the Nebraska Department of Economic Development.
Bitcoin, or cryptocurrency, consumes huge amounts of energy to run specialized computers that perform complex calculations that are used to generate new bitcoins for “miners,” making energy costs a key consideration is deciding where to locate a mining operation.
Interest in cryptocurrencies, like bitcoin, and the mining operations that expand the supply of cryptocurrencies often surges when prices rise. Bitcoin prices right now are booming, recently hitting about $56,700 for a single bitcoin and marking a quadrupling of prices since late 2020.
Compute North, which also has data processing centers in Texas and South Dakota, said it anticipates the expanded Kearney facility will “fill up quickly,” and noted several new customers for its services, including Foundry Digital LLC, Bit Digital Inc., and “several other emerging players in the bitcoin mining space.”
The volatility of cryptocurrencies was a concern initially, said Hanrahan, but Compute North is “putting in a significant investment to be here. It really is a partnership.”
Hanrahan said NPPD would have to build a new substation to serve the expanded load from the industrial park, but the utility has worked out commitments from Compute North to cover those costs.
In addition to the shear size of the planned expansion, another attraction of the new Compute North is that the load is interruptible. Cryptocurrency mining is usually an around-the-clock operation, but miners have the ability to suspend operations depending on prices and conditions on the electric grid.
An increase in renewable generation on the grid is creating a desire to have more flexible generation, but another way of looking at it is having load that is flexible on the other side, Hanrahan said. “It offers more opportunities to respond and to take advantage of market conditions,” he said.
“NPPD is pleased to see Compute North grow in Kearney, where they can take advantage of our low costs and reliable service. “We too look forward to working with Compute North in meeting their needs for renewable energy, while also looking at how we can both benefit from their flexible demand for power,” Tom Kent, president and CEO of NPPD, said in a statement.