Cryptocurrency mining, which relies on abundant power, expanding in Iowa

MiningStore, which opened its flagship mining site in Grundy County in 2019, is petitioning Hardin County in north-central Iowa to rezone two farm-to-manufacturing parcels to allow for mining sites adjacent to substations utilities owned by the Midland Power Cooperative.

"This is something new, not like a restaurant or a commercial facility," Hardin County Supervisor BJ Hoffman said.

The Grundy County site has a large Quonset hut filled with fans that cool more than 1,000 computers that run around the clock to solve math problems that create bitcoin, the world's best-known cryptocurrency. As each new bitcoin block is solved, mining operations like this get paid.

The Hardin County sites, if approved, would be smaller with ventilated boxes containing servers.

MiningStore founder and CEO JP Baric, 25, of North Carolina, spoke earlier this month with the Hardin County Board of Supervisors. The county Planning and Zoning Commission will consider his proposal on January 24 and then make a recommendation to supervisors.

Cryptocurrency mining has raised concerns in Iowa and elsewhere because of the amount of electricity it uses. The White House reported in August that global electricity use for crypto mining was between 120 billion and 240 billion kilowatt-hours per year, which is more than the total annual electricity use of some countries, including Argentina and Australia. This increase in demand comes as the world tries to reduce electricity consumption due to climate change.

Each of the proposed sites in Hardin County would use 5 megawatts, the equivalent of powering 4,000 to 9,000 homes, according to the US Nuclear Regulatory Commission.

But supporters of crypto mining say they are adding resiliency to the power grid by using surplus wind and solar power that often goes to waste if utilities don't have battery storage. At times of peak power need, mining sites would halt operations, giving the utility more capacity for other customers.

"They have signed an agreement with the Midland Power Cooperative to shut down their operation to a minimum during peak hours, either in July in Iowa when everyone is using AC or in mid-December when power consumption is also high," Hoffman said.

Cedar Falls Utilities signed 2021 leases with two companies, Simple Mining and Energy Conversation Group, to place crypto mining crates at its utility site, the Waterloo-Cedar Falls Courier reported in June.

The utility is testing the arrangement because mine developers pay for infrastructure and help with demand response, the city-owned utility said in a PowerPoint presentation Baric shared with The Gazette.

But these local utilities are still heavily dependent on coal and natural gas.

Midland Power Cooperative, which provides electric service to 17 Iowa counties, gets at least 46 percent of its power from coal, according to its website. As of 2021, Cedar Falls Utilities was getting about 60 percent of its power from nonrenewable sources, including coal and natural gas.

MiningStore has also opened a crypto mining site in Marshall County near St. Anthony, Hoffman said.

The Black Hawk County Board of Supervisors decided in August against rezoning to allow for a crypto farm, citing noise and energy use. Grundy County also voted against a second proposed MiningStore location.