Regulation
Indiana promises reliable energy to attract crypto miners
Indiana lawmakers pledged to provide substantial low-cost electricity and water resources to large businesses, aiming to attract data centers and cryptocurrency mining operations to the state .
The lure of the many utilities has already attracted the attention of tech giants such as Meta, Amazon, Google and Microsoft, as well as cryptocurrency mining company AboutBit, all of which have invested in or are considering building facilities in the ‘Indiana.
Incentives for tech giants, innovation for crypto miners
Although Indiana offers financial incentives to various organizations, these benefits do not extend to AboutBit and other cryptocurrency miners.
This distinction has not deterred AboutBit, which innovatively converted a 50-year-old power plant into a sustainable, liquid-cooled cryptocurrency mining facility adjacent to the Merom Power Plant.
Notably, last May, Amazon declared an $11 billion investment in Indiana. Gov. Eric Holcomb highlighted the state’s ability to meet the substantial needs of such a project, noting that Amazon’s decision was influenced by ensuring sufficient electricity and water supplies.
Echoing that sentiment, David Rosenberg, Commerce Secretary and head of the Indiana Economic Development Corp., confirmed that the state is prepared to provide these critical resources.
Crypto miners are joining the growing list of Indiana data center tenants. Source: Indiana Capital Chronicle
The cryptocurrency sector, particularly Bitcoin mining, has demonstrated significant energy demand. Analyst Paul Hoffman of Best Brokers reported that as of May 28, 2024, Bitcoin miners in the United States have spent $2.7 billion on electricity.
Since the start of the year, the industry has consumed 20,822.62 GWh of electrical energy. With the average commercial electricity rate standing at $0.1281 per kWh in February, this consumption translates into a massive financial outlay.
Putting Bitcoin’s Energy Consumption into Perspective
Energy requirements for Bitcoin mining increased following the halving event in April. Before the halving, mining one Bitcoin required 407,059.01 kilowatt hours (kWh), which cost approximately $52,144.26.
After the halving, the energy needed almost doubled to 862,635.55 kWh, with the cost climbing to about $110,503.61 at current rates.
Hoffman further illustrated the scale of this energy consumption, noting that it could charge every electric vehicle in the United States 87.52 times or power nearly two million homes for a year, or 1.51% of all American homes.
Additionally, the January Bitcoin ESG forecast revealed that sustainable energy use in Bitcoin mining reached a new high of 54.5%, with a 3.6% increase in sustainable mining practices throughout of 2023.