A Bitcoin mining company plans to build a new 50-megawatt data center in Polson, according to an announcement made Friday by Gov. Greg Gianforte and Confederate Salish and Kootenai Tribes Secretary Martin Charlo.
The data center will be powered by hydroelectricity from the Salish-Kootenai Dam (formerly Kerr Dam) which blocks the Flathead River at the south end of Flathead Lake.
According to Energy Keepers, Inc., the CSKT-owned company that operates the dam, the structure has the capacity to generate 208 megawatts of electricity, meaning the new bitcoin mine will absorb about a quarter of the plant’s output.
The announcement was made at the Montana “On the Rise” economic summit hosted by Sen. Steve Daines in Bozeman.
“We are thrilled to announce this new opportunity today at Senator Daines’ Economic Summit, which will benefit the nation and connect clean baseload energy to next-generation computing,” Charlo said in a statement.
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The data center will be built by Bitzero, according to company CEO Akbar Shamji, who was in Bozeman this week for the summit.
Bitzero made waves on Thursday when it announced it would invest up to $500 million in bitcoin mining operations in North Dakota. Bitcoin requires large amounts of energy for the computer processing that creates cryptocurrency.
There has been growing scrutiny of the huge amounts of energy consumed by cryptocurrency data centers around the world due to fears that this is leading to increased greenhouse gases. As a result, many businesses are opting for renewable energy sources. But some researchers have pointed out that the depletion of renewable energy sources creates an economic incentive to create or continue coal-fired power plants.
Missoula County has had a strained relationship with Bitcoin mining companies. After one such company, Hyperblock, moved into a warehouse in Bonner, concerns about noise and energy consumption led county commissioners to pass zoning bylaws that regulate where such operations can to exist. The county also passed emergency “green” regulations that required bitcoin mining companies to purchase or build new renewable energy sources to offset 100% of their energy needs. At one point, Hyperblock used as much electricity as a third of all homes in the county. This power also came from the Salish-Kootenai dam.
However, Missoula County commissioners said the energy consumption has displaced other potential buyers of renewable energy who must then purchase greenhouse-gas-emitting coal-fired electricity.
“That water wouldn’t just spill over the dam (if Hyperblock didn’t buy it),” Commissioner Dave Strohmaier said at the time. “There are buyers for electricity, so it’s not like it’s renewable energy that would otherwise be wasted. As far as I know, cryptocurrency uses exponentially more energy; this is a preposterous amount of energy and we need to take steps to address it.
Hyperblock ceased operations in Bonner in the spring of 2020.
One of the investors in Bitzero, the company building the Polson data center, is Kevin O’Leary, a Canadian businessman who rose to fame on the TV show “Shark Tank.”
“There’s a healthy competition developing between states to attract capital,” O’Leary said. “Some states excel at crafting business-friendly policies, regulations, and taxes and have leaders who have actually run businesses in their careers. Montana has all of that and more. To me, as a investor, the state is one of the top five destinations for long-term capital investment.”
Gianforte and Daines also welcomed the announcement, saying the data center will create well-paying jobs.
“Montana is open for business globally, and we are excited about this investment in Montana,” Governor Gianforte said. “Our continued focus on lowering taxes, cutting red tape, and attracting and training workers in critical industries to fuel future job creation, growth and prosperity.
Daines hosted the summit with the Montana Chamber of Commerce.
“This new investment in CSKT will support well-paying jobs in Montana, boost Montana’s economy, and keep Montana at the forefront of the energy and technology sector,” Daines said. “I am pleased to announce this lucrative project. I look forward to the new and exciting opportunities this will bring to Montana.”