2019 NWHA Annual Conference Cryptocurrency Mining

Transcription

1 2019 NWHA Annual Conference Cryptocurrency Mining Lesson s learned from one utility John Stoll Managing Director, Chelan County Public Utility District, Wenatchee Washington 1

2 Today s Discussion Why the interest in North Central Washington as a cryptocurrency hub What issues does cryptocurrency mining present to the load serving utility Both authorized and unauthorized Actions utilities should consider

3 Public Utility District for 75+ years 50,000 Customers, 5 Elected Commissioners Electric-Water-Wastewater-Fiber Optics, Parks Average retail rate 3.2 cents per KWh Energy Resources: Three major hydro-electric projects 2,000 Megawatts of Hydro Generation 9.3 million MWHs of Generation (2017) Small investments in wind & solar generation 3

4 The Crypto Mining Capital of the USA Other favorable attributes: Climate Commercial space Broadband

5 Not like other loads» Significant risks associated with new infrastructure, pricing, cost recovery, reliability, safety» Mismatch of business models, reliance on volatile commodity» Distributed computing allows morphing of loads between big and small ( take what I can get )» Wholesale marketing program impacts» Transmission and distribution capacity availability» Staff resources are over-allocated across the District to address these issues delaying District Performance Plan goals In addition, many miners have chosen to avoid making application with the utility and have rogue operations

6 Cryptocurrency Mining Usage - Residential > (10) ASIC Miner 24 x7 Monthly Usage = (720 Hours) 8,640 Kilowatt-hours or (8,640 KWhs) (10) X (1,200 Watts) = 12,000 Watts 5 x (Typical residential home usage)

7 (EUI) Energy Use Intensity - Commercial Measured in KWh/Ft 2 /Yr. Large Grocery Store Public School K-12 General Hospital KWh/Ft 2 KWh/Ft 2 KWh/Ft 2 Residential Home Hotel Cryptocurrency Mining Operation 12 KWh/Ft 2 18 KWh/Ft 2 >2500 KWh/Ft 2

8 Photo taken April 6, 2015 Transient Load Cryptocurrency Mining Operations in cargo containers April 15 Wenatchee Each container is approx. 150KW to 250KW Photo taken December 2, 2015 Cryptocurrency Mining Operations in cargo containers December Wenatchee Each container is approx. 150KW to 250KW

9 Challenges of Unauthorized Cryptocurrency Miners Examples of Mixed Use Avoid consulting with utility provider Ignore State or local electrical code Avoid permitting & local building codes Avoid proper business Licenses Exceed electrical supply equipment rating Operate in rented or leased space Not inform landlord or property owner of activities 9

10 Unauthorized Mining Can Result In Fires Residential home within incorporated City Unauthorized Bitcoin mining operation of (56 KW- Demand) August 28 th, supply cable failed resulting in a fire igniting inside utilities fiberglass handhold Customer claimed arson

11 A massive wave of Cryptocurrency Applications > 75 HDL inquiries between October to December 2017 Inquiries in form of walk-ins, phone calls, s, letters Range from 5KW up to 100 MWs > 95% are in leased space Majority of inquiries from out of county and out of state the

12 Rate Classification Original definition KWh/sq. ft. Revised definition - Connection to volatile commodity price

13 How To Serve It Energy» From existing inventory; how much / how long» Market purchase retail vs. wholesale load» Build generation

14 Transmission Considerations Transmission Capacity» Exclusion zones» Extreme cost zones Pricing» Average vs. marginal» Proportional vs. all Timing» Difficult to meet expectations Rate vs. Contract System Expansion Infeasible North of Leavenworth Extreme High Cost for System Expansion North of Rocky Reach Potential Capacity* Available for System Expansion in Monitor/Wenatchee/Malaga area - further studies are underway (provided zoning supports load type)

15 Other Considerations Capacity» Build zones» Organic load reservation» Substation capacity single location capability Pricing» Average vs. marginal» Proportional vs. all Timing» Difficult to meet expectations Rate vs. Contract

16 Consider Utility Policy Changes Establish a Cryptocurrency Rate and Customer Class Strengthen Service Regulations & Policies Cover Capital Infrastructure Risks (fees & Charges) Advanced metering requirements Align with Municipal Planning and Zoning

17 Questions? 1/8/