Going Nuclear: Bitcoin Mining’s Potential Energy Future

Miners Marathon Digital and TeraWulf could look to use more nuclear energy going forward — if the power industry cooperates


TTstudio/Shutterstock.com modified by Blockworks


Though the prevalence of bitcoin miners using nuclear energy at scale could take years to materialize, several players in the space are bullish on the prospect. 

Volatility around bitcoin and the general slow pace of movement in an often risk-averse power industry could serve as barriers though, industry participants said. 

Bitcoin miner TeraWulf recently revealed it is setting up operations at a nuclear energy-powered data center in Susquehanna, Pennsylvania, as part of a partnership with Talen Energy forged in 2021.

The company is targeting 50 megawatts (MW) of mining capacity at the site, with a hashrate capacity of about 1.6 exahashes per second (EH/s). 

TeraWulf began operations at its other site in upstate New York last March, using hydro and solar power at the facility. It is now set to commence mining at the nuclear plant by the end of the quarter. 

Nuclear, natural gas and coal provide base load — a minimum level of power on a grid over a period of time. Renewable energy, such wind and solar sources, have intermittent load, meaning they are not continuous. 

“Given the significant penetration of renewables, what’s been happening with a lot of these base-load facilities is they’re not running at base load anymore,” Nazar Khan, TeraWulf’s co-founder and chief operating officer, told Blockworks. “They were looking and saying the optimal way to run a nuclear facility is for it to just run.”

Khan added that the set-up allows for a bitcoin miner to be an asset to a system that rarely uses peak demand. While TeraWulf gets a reliable and carbon-free energy source to mine bitcoin, the nuclear plant can guarantee a number of megawatts coming off their generators each day. 

“If we could do five more deals like Talen, we would,” he said. “We’ve had discussions with the largest nuclear operators in the country down to folks who have a couple of sites.”

Khan said the conversations are ongoing, declining to share the specific nuclear operators TeraWulf is in talks with. 

How do other miners view nuclear energy sources?

TeraWulf is not the only miner bullish on using nuclear power.

While Marathon Digital has not yet made nuclear power a major part of its strategy, it sees the energy source as a potential key part of the future. The company doubled its hashrate in 2022 to 7 EH/s and expects to have 23 EH/s of capacity installed near the middle of 2023. 

“When we, and I think a lot of other bitcoin miners, realized how much stranded or wasted wind and solar [energy] there was…that became a pretty good target for bitcoin miners,” said Charlie Schumacher, Marathon’s vice president of corporate communications. “Because you’re looking for stranded, wasted energy; you don’t want to compete with consumers for electricity.

“So I think that was low-hanging fruit initially, but long-term nuclear makes a ton of sense,” he told Blockworks. 

UK-based Lake Parime, a company focused on transforming energy into zero-carbon computing power, revealed in November that it launched a site in Ohio using 100% nuclear energy.

The 20 megawatt (MW) site’s hosting clients are Marathon and TAAL, a company that offers blockchain services and infrastructure.  

Schumacher said the Ohio site is a good way for Marathon to “test the waters” about potentially using nuclear energy on a larger scale.

“We’re definitely interested if we can find a site that works for us,” he said. “If you just think of the nuclear sites that exist today, we would be happy to co-locate next to one and serve as a base-load customer for them.”

Lili Rhodes, a senior mining analyst at Compass Mining, called nuclear power an ideal power source for bitcoin miners in a September 2021 blog post — noting that it is energy efficient and cheap.

William Foxley, Compass Mining’s director of media and strategy, told Blockworks that Compass Mining has a few mines connected to larger grids partially run on nuclear energy. 

The company secured a 20-year partnership with Oklo, a fission company that had a proposed power plant being reviewed by the US Nuclear Regulatory Commission. But Foxley said Compass Mining’s deal with Oklo is on pause until its partner receives more regulatory clarity. 

The current power strategy of Riot Blockchain, meanwhile, focuses on having a large, flexible load in Texas’s ERCOT grid, according to CEO Jason Les. This includes various emission-free energy sources, including wind, solar and nuclear.

Les did not return a request for further comment. 

Hive Blockchain, another publicly traded miner, does not use nuclear energy, CEO Aydin Kilic said.

“Our focus has been hydro and geothermal, which do not produce waste,” he told Blockworks. “Nuclear is treated as non-emitting but it is not a renewable green energy source like hydro and geothermal.”

Barriers to overcome

Schumacher called the nuclear energy industry an “intensely regulated space” with few new sites. 

Rhodes wrote in the 2021 blog post that nuclear power is demonized by the mainstream media and feared by the general public. Many people associate the word nuclear with bomb, Schumacher added, further slowing the pace of adoption.

The newest reactor to enter service is Tennessee’s Watts Bar Unit 2, which began operation in 2016, according to the US Energy Information Administration (EIA). The next-youngest operating reactor is Watts Bar Unit 1, also in Tennessee, which opened in 1996. 

Overall, there were 92 nuclear reactors operating at 54 nuclear power plants in 28 states, as of July 2022, EIA data shows. Nuclear power plants have supplied about 20% of total annual electricity used in the US since 1990.

While nuclear energy is a great source of power for bitcoin miners in theory, Schumacher said, it takes two sides to form a partnership.

“I think like many folks in the power industry, they’re risk-averse,” he added. “They think in terms of decades and bitcoin thinks in terms of months or days sometimes.”

Jonathan Cobb, senior communication manager at the World Nuclear Association, told Blockworks that bitcoin’s volatility in recent months could pose an issue. 

Bitcoin’s price is down 66% from its all-time high reached in November 2021, and various miners have struggled to pay back debt it took on to expand during the bull run. Compute North and Core Scientific have filed for bankruptcy in recent months, and industry watchers have said they expect more casualties in the space this year.

“Will bitcoin miners be in a position to agree to supply contracts that would be mutually beneficial?” Cobb said. “This would be less of an issue for other types of data centers with more certain business models.”

Khan said the drastic fluctuating margins of the bitcoin mining industry through market cycles has turned off some nuclear power executives. Others in the power industry aren’t sold on bitcoin as an asset more generally, he added. 

Still, Khan said he believes as the bitcoin mining space consolidates and matures, it has a place in the nuclear energy segment. 

“We would love for it to be the majority,” he said of nuclear energy as a power source for TeraWulf long term. “It’s a zero-carbon base-load resource, so in terms of how it fits into what we’re doing, it’s a wonderful resource to have.”

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