Hut 8 cryptominer expanding to central Alberta

By COLLIN GALLANT on May 1, 2021.

cgallant@medicinehatnews.com@CollinGallant

Hut 8 will expand its Bitcoin mining operations in central Alberta later this year, the company has said less than two months after it said it was in talks to secure greater power while improving its environmental footprint.

The cryptocurrency miner is also looking to take advantage of booming interest and prices of digital currency, but couched a February announcement in terms of getting on board with efforts in the United States to reduce methane emissions and tackle the issue of greenhouse gas.

At that time, the company signed a memorandum of agreement with Validus Power, which develops mobile power stations – truck-mounted natural gas turbine engines – and Hut 8 would use the massive amount of power to run its blackbox data-mining units.

On April 18, Hut 8 detailed the finalized agreement for a physical off-take agreement saying it would secure up to 100-megawatts of power supply and potentially more from a Validus, which was working to develop a “central Alberta” natural gas plant later this year.

The physical off-take agreement, meaning the power would be used at the site not through the provincial grid, would roughly double Hut 8’s current power buy of 109 megawatts for existing operations in Medicine Hat and Drumheller.

“We are thrilled to have the opportunity to announce this cutting-edge power expansion project,” said Jaime Leverton, Hut 8’s CO. “This project is key to Hut 8’s mining strategy of being a leader in procuring cost effective power and advancing innovative mining practices.”

The use of cryptocurrency and interest in firms that earn fees for completing the complex computations needed to trade digital currency has increased in popularity, but the tech sector has also faced increasing scrutiny for the large amounts of power it requires.

This month, Hut 8 announced it has hired former Bullfrog Power executive Ronnie Yu as its head of sustainability. He is cited as having put together the deal for alternative power retailer Bullfrog to lock up portion of power sales from the Bluearth Renewables’ BurdettBurdett and Yellow Lake projects that went online last month.

Last month, the News revealed that cryptominer pure Digital Power Corp. was seeking out sites in southern Alberta to build a stable gas-fired power plant that would be eventually coupled with renewable energy production to cut total emissions.

Burning waste or flare gas is considered more environmentally friendly as pure methane is a much more potent greenhouse gas compared to carbon dioxide.

The agreement between Hut 8 and Validus is contingent on Validus acquiring land rights, gas supply and regulatory approvals.

The release states that an initial 35-megawatts of power could be available in the last quarter of 2021.

That amount of energy is about half the size of power agreements the firm holds with the City of Medicine Hat’s power division. Under the contract with Validus, Hut 8 would hold options to lock in power supply above the initial 100 megawatts.

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