By COLLIN GALLANT on February 23, 2021.
Looking to capitalize on the rocketing price of Bitcoin, Hut 8 will explore adding its own power production at sites in Alberta.
The dataprocessing company, which is already the biggest power buyer in the City of Medicine Hat, announced Monday it was in talks with Validus Power Systems to potentially add on-site, cleaner power production.
That will likely combine captured heat from equipment with a gas-fired mobile generation system that sits on the back of two tractor trailers and comes with a whopping capacity of 35 megawatts.
That’s enough power to either provide a one-third production capacity boost across the company, or supplant one-third of power purchased by the company to operate in the Hat and a smaller site in Drumheller.
Company officials told the News that more information would be made available on Tuesday morning.
“The future of our industry and our commitment to our investors is to continuously push new, creative ways of thinking which drive our competitive advantage,” stated CEO Jaime Leverton in a release. “Just like we invest in hardware and get ahead of the supply constraints, the same thoughtful approach needs to be applied to our energy and ESG (environmental, social and governance) objectives.”
Hut 8’s social media accounts promoted the deal and said “Innovation is Key: Wheel-in the 35 megawatts, clean up dirty gas and output the Bitcoin.”
Validus advertises scalable co-generation units that fit on tractor trailer beds and can be configured to produce 35 megawatts of electricity.
Heat is a major challenge in data centres, in which stacks of processors work by performing complex computations. Cooling those systems takes power, while tweaking power use to achieve maximum optimization of equipment is a hallmark in the sector.
Hut 8’s stock rose from $10.62 at the beginning of trading on Monday in Toronto to as high as near $15, before settling at $13.18.
Bitcoin, which was already trading at all-time highs in late January, has risen almost 80 per cent in value over three weeks. It was trading near $54,000 on Monday.
The data processing company earns a fee in Bitcoin for handling the complex transaction, and it also holds Bitcoin reserves for revenue purposes.
The company currently states its power buy at 109 megawatts, about 40 per cent of which is located at a site in Drumheller.
A local 10-year supply agreement to buy 44 megawatts of city-produced power will expire in 2028, and last year that was expanded to have the city bring in another 23 megawatts from the provincial grid.
That amount is already 10 times the next largest contract held by the municipal power company.
City of Medicine Hat officials told the News they had no previous knowledge of the deal, but would comment after Tuesday’s comments from the company.
The city is also readying for major construction activity on its expansion of the north-end power station. Adding a second GE LM6000 generator there in sequence with an existing turbine would double the output at the station to about 90 megawatts.
That is to be completed and commissioned in early 2022.
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