World's Oldest Working Hydro Plant Now Mining Bitcoin
Will this 1897 Hudson River plant spark a new wave?
An upstate New York hydroelectric plant, built in 1897, is now being used solely to mine Bitcoin. The Mechanicville Hydroelectric Plant sits along the western shore of the Hudson River in the Town of Halfmoon in Saratoga County, much of its original structure and equipment intact. Despite nearly facing a wrecking ball in the 1970’s, and enduring a flood, a fire and massive damage over the years, the plant is operating today with much of the original transmission equipment.
The site was designed by General Electric engineer Charles Steinmetz and developed by Dayton businessman Robert King. Construction began in 1897 under the company Hudson River Power Transmission and was up and running by July of 1898. For the next sixty years, much of the power produced was transmitted to the General Electric plant in Schenectady, originally founded by Thomas Edison.
In the 1960’s, the Niagara Mohawk Power Corp. was in the process of shuttering several older hydro facilities, citing the inefficient machinery and prohibitive costs to maintain the plants. Preservation efforts kept the plant open, however, and eventually Albany Engineering Corp. committed to a $3 million renovation project. The engineering firm had refurbished over a dozen hydroelectric plants across the country. Niagara Mohawk had committed to buying power from the Mechanicville plant for 40 years, but reneged on the deal in 1993. A decade of litigation ensued, and Albany Engineering took control in 2003.
“We think this is the oldest renewable energy facility in the world that’s still running,” said Jim Besha, Sr., CEO of Albany Engineering Corp.
Why not try Bitcoin mining?
National Grid, formerly Niagara Mohawk, recently offered only $.03 per kilowatt hour for the power from the plant, so the owners of Albany Engineering turned to Bitcoin mining for the time being. Jim Besha, Sr., CEO of Albany Engineering, stated that the company can make three times as much mining Bitcoin as it can by selling the power. He won’t say exactly how much they make, only that they mine “thousandths of a Bitcoin each week,” employing second-hand computer servers. (Now, a thousandth would be about $30, but say, fifty one-thousandths would be more like $1,500.) Whatever they’re making, the Bitcoin is sold each week for cash, as Besha says he’s skeptical on Bitcoin as a long-term investment. He won’t be donning the “Laser Eyes” any time soon. Still, Besha is clearly proud that his firm has kept the 124 year-old facility running.
Bitcoin Mining and Green Energy
“It’s the best type of Bitcoin mining, because we’re using renewable energy. We’re just doing it on the side, experimenting with it. We’re buying used servers.” - Besha
With China’s recent ban on Bitcoin Mining, despite much of it having been done with hydro power, miners are relocating to venues offering cheap renewable energy. Hydroelectric plants such as the Mechanicville plant could become surprisingly profitable operations once again. Remarkably, however, the New York State Senate has passed a bill prohibiting mining in the state, even by renewable energy means. That bill’s fate is still to be determined in the state Assembly.
Converting an outdated hydro plant into a Bitcoin mining is still quite a story, and the local Albany Times Union article from two weeks ago was picked up by Bitcoin publications around the country. Kathleen Moore, who wrote the story on the plant, told me,
“It’s something they’ve been experimenting with - they want to use their power for green uses like charging electric cars. But for now, their choices are limited. So they’re adding some Bitcoin mining.” - Kathleen Moore
Note: I visited the plant along the Hudson River last Monday, and it’s quite a sight, with many of the original Queen Anne architectural features still intact. In 1989 it was named to the National Register of Historic Places. Additionally, the Mechanicville hydroelectric plant has now been nominated for landmark status in three different types of engineering: civil, electrical, and mechanical. Said Kathleen Moore, the Times Union reporter, “It’s small, but it’s mighty.”
Tweet of the Week:
Follow Scott Melker on Twitter if you want to learn more about Bitcoin. When Scott says, “Probably nothing,” his sarcasm tells you it’s a pretty big story:
Bitcoin Magazine @BitcoinMagazineJUST IN – Ark Invest increased its #Bitcoin exposure again Tuesday buying 140,000 Grayscale shares worth $3.3 million. That's over $10 million in shares so far this week 🔥 https://t.co/3Nnh1T3XoN
Bitcoin Price versus one year ago:
Despite Bitcoin’s steep drop off its all time high of around $64,000, the price of one Bitcoin is currently about three and half times higher than it was just one year ago. Approximately $32,000 versus $9,617 a year ago. Zoom out. Keep perspective.
Issue No. 13, July 23, 2021
Rick Mulvey is a CPA, forensic accountant and crypto consultant. He writes about all things Bitcoin, runs marathons, yells at the Yankees and Giants, and is getting better at making homemade wine.
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