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Local weather Regulation Weblog » Weblog Archive » The New York Division of Environmental Conservation Denies an Air High quality Allow to a Cryptocurrency Mining Facility, Citing Sabin Middle White Paper

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By Jacob Elkin

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On June 30, 2022, the New York Division of Environmental Conservation denied Greenidge Technology LLC’s utility to resume a Title V air high quality allow for the Greenidge Producing Station. The power, beforehand permitted as a pure gas-fired “peaker” plant, has just lately ramped up its energy era to supply behind-the-meter energy to Greenidge’s proof-of-work cryptocurrency mining operations.

The denial cites a Sabin Middle white paper printed in March 2022 that argues that the New York Government Department has the authorized authority to implement a moratorium on the allowing of fossil gas energy vegetation which might be offering behind-the-meter power to proof-of-work cryptocurrency miners. Because the paper discusses in additional element, proof-of-work cryptocurrency mining requires important power consumption and thus produces giant portions of greenhouse fuel (GHG) emissions. Researchers have recently estimated that Bitcoin mining is liable for 65.4 megatonnes of carbon dioxide emissions per 12 months. Different estimates put Bitcoin’s annualized carbon footprint at 72.05 megatonnes of carbon dioxide, comparable with that of Greece, with a single Bitcoin transaction producing 805.77 kilograms of carbon dioxide, equal to the emissions generated by 1,785,864 VISA transactions.

So as to energy such operations, a trend has arisen of former coal energy vegetation transitioning to pure fuel era to ship behind-the-meter energy to mining amenities. Greenidge Technology is one such facility, working as a coal-fired energy plant within the 1930’s earlier than ceasing operations in 2011, then receiving a brand new allow to restart operations as a pure gas-fired plant in 2016. When making use of for that 2016 allow, Greenidge indicated that it could function solely to supply energy to the grid in a “peaking” capability, however since 2020, Greenidge has begun using the power it produces to energy an on-site cryptocurrency mining operation. Because of this variation in operate, Greenidge’s GHG emissions have increased considerably, with Greenidge predicting its emissions to proceed to extend going ahead. Greenidge’s allow renewal utility has thus drawn a major quantity of consideration state- and nation-wide.

DEC’s denial rests totally on the allow utility’s incompatibility with the local weather targets enshrined in New York’s Local weather Management and Neighborhood Safety Act (CLCPA). In a separate statement on the denial, DEC summarized the choice as follows:

“Based mostly on DEC’s assessment of the particular information and circumstances introduced, this pure gas-fired facility’s continued operations can be inconsistent with the statewide greenhouse fuel emission limits established within the Local weather Act. Among the many elements thought of was the dramatic enhance in greenhouse fuel emissions from the power because the passage of the Local weather Act, pushed by the change within the main goal of its operations. Reasonably than solely offering power to the state’s electrical energy grid, the ability plant now primarily gives power behind-the-meter to help the calls for of Greenidge’s energy-intensive proof of labor cryptocurrency mining operations.”

Whereas a lot of DEC’s denial letter pertains to the specifics of Greenidge’s allow utility and facility emissions, the letter additionally incorporates a number of key takeaways pertaining to the which means and impact of the CLCPA extra broadly. These takeaways primarily apply to Section 7(2) of the CLCPA, which gives that every one state companies should take into account whether or not allow selections and different administrative approvals are inconsistent with or will intervene with statewide GHG emissions limits and, the place such selections are deemed inconsistent, present an in depth assertion of justification for the approval and require alternate options or emissions mitigation measures for the venture. The primary takeaways from the denial are as follows.

  • First, DEC made clear within the denial letter that Part 7(2) applies to allow renewal functions in addition to functions for brand new permits. That is essential, because the state’s GHG emission discount targets would require mitigating emissions from present sources.
  • Second, DEC rejected Greenidge’s argument that Part 7(2) doesn’t apply to allow renewal functions previous to DEC’s promulgation of CLCPA-implementing rules, which is essential in guaranteeing that the CLCPA has a significant influence on company motion previous to the promulgation of such rules.
  • Third, DEC rejected a number of arguments associated to a single supply’s potential inconsistency with the CLCPA’s emissions limits. Greenidge had argued that its facility couldn’t be inconsistent with these limits, as its emissions solely symbolize a small portion of the state’s total emissions. Greenidge had additionally centered on the truth that it at present emits lower than it did when it burned coal within the 1990’s. Lastly, Greenidge had argued that, since DEC renews its allow in five-year intervals, this present allow renewal couldn’t battle with emissions limits that the CLCPA has set for 2030. Any of those arguments, if profitable, would danger severely limiting the energy of the CLCPA as a instrument for mitigating emissions from particular person sources.
  • Fourth, DEC said that, a minimum of on this occasion, the CLCPA is a cloth change in relevant regulation that DEC was required to contemplate when reviewing the allow renewal utility. As outlined within the Sabin Middle’s March 2022 white paper, the existence of a cloth change in utility regulation grants DEC authority to deal with a renewal utility as an utility for a brand new allow and grants all companies authority to require a brand new environmental assessment of a venture below the State Environmental High quality Assessment Act. This part of the choice letter could show related to different allow renewal functions when the reviewing company issued or most just lately renewed a allow earlier than the CLCPA’s enactment.
  • Lastly, DEC indicated that it’ll stringently assessment proposed emissions mitigation measures earlier than approving a allow that’s in any other case inconsistent with the state’s GHG emissions discount targets. As DEC said within the denial letter, “[w]hile Greenidge did suggest restricted GHG mitigation measures in a supplemental submission to DEC after the shut of the general public remark interval, these measures are additionally inadequate,” since “they might solely present minimal GHG mitigation and never absolutely account for the substantial enhance in GHG emissions as a result of Facility’s change in its main goal of operation.”

Greenidge has stated that it’ll attraction DEC’s choice and can “proceed operating uninterrupted below [its] present Title V Air Allow” within the meantime.

Separate from this particular allow utility, the New York Legislature just lately passed a bill that will put in place a moratorium on the approval of recent or renewed allow functions for amenities fossil gas energy vegetation that offer behind-the-meter power to proof-of-work mining operations. Whereas the moratorium would apply to all new allow functions, it could solely apply to renewal functions when the appliance seeks to extend or will enable or lead to a rise within the quantity of power {that a} cryptocurrency mining operation consumes or makes use of. That invoice is currently awaiting Governor Hochul’s signature.

You may learn extra concerning the Greenidge Technology Station’s allow renewal utility and New York State’s authority to determine a moratorium on the allowing of such amenities within the Sabin Middle’s March 2022 white paper, A Pause on Proof-of-Work: The New York: The New York State Executive Branch’s Authority to Enact a Moratorium on the Permitting of Consolidated Proof-of-Work Cryptocurrency Mining Facilities.

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