Socar wanted to use Delimara for energy-hungry Bitcoin mining, Electrogas email shows

Nationalist MP tables leaked email in Parliament showing Electrogas directors discussing how to use Delimara plant for Bitcoin mining

The faster the machines are plugged in, the sooner they can begin gulping down electricity and turning it into money. Racks of bitcoin mining rigs run the length of seven warehouses at Bitmain’s Ordos facility, which is in a constant state of upgrade.
The faster the machines are plugged in, the sooner they can begin gulping down electricity and turning it into money. Racks of bitcoin mining rigs run the length of seven warehouses at Bitmain’s Ordos facility, which is in a constant state of upgrade.

The Azerbaijani state oil company Socar was planning to use land inside the Delimara power station so that it could start mining cryptocurrencies, a very energy-intensive activity.  

According to emails that were leaked to the late Daphne Caruana Galizia, in August 2017 a Socar representative asked Electrogas – the company that provides LNG to Malta’s power plant, and which includes Socar as a shareholder – the Azeris wanted to learn whether a space at Delimara could be used for “Bitcoin mining”.  

The email was tabled in the House by Nationalist MP Jason Azzopardi during a motion in the House discussing the National Audit Office’s investigation of the Delimara gas plant’s tendering and commissioning. 

Bitcoin is one of the world’s cryptocurrencies. It is mined using high-powered computers that solve complex computational math problems. Since mining can provide a solid stream of revenue, the power-hungry machines are constantly running to provide revenue, causing the energy consumption of the Bitcoin network to grow to epic proportions: over 42 TeraWatt hours of electricity in a year, placing it ahead of New Zealand and Hungary and just behind Peru, according to estimates from Digiconomist. That’s akin to carbon emissions from around 1 million transatlantic flights.  

In the Socar email to Electrogas, Turab Musayev, who is also an Elecrtogas director, asks Catherine Halpin whether a small plant would be required to generate the power for the Bitcoin mining enterprise at Delimara. 

“I think in general these installations are a difficult business case and usually built in much colder climates,” Halpin said, forecasting a possible 2020 installation date. 

She also said getting a permit for a cryptocurrency mining centre would require a “tidy-up exercise on the Electrogas permits” with both Enemalta and lenders about using gas for reasons outside the generation of energy. “The biggest key in all this (assuming the financials make sense) will be Enemalta – for lease of land, support in permits and approval of the installation.” 

She listed various options for leasing the land, among them a lease to Electrogas, which is currently leasing the land at Delimara for just €11.65 per square metre. “Our EGM lease arrangement is quite favourable at €11.65/m2 per annum. Commercially you would expect to pay a multiple of that.” 

An alternative would be to locate the data site anywhere in Malta, but install the new turbine at Delimara and negotiate with Enemalta to export the electricity to the data warehouse. 

But that would lose the potential benefit of having access to glycol cooling to keep the mining computers from overheating. The glycol line to the regasification plant would have to be ‘broken’ so that it could be also fed to the cryptomining engines which Halpin said would impact Electrogas’s warranty. “Seawater could also be used. This would be helpful in the use of a completely different site to Enemalta. However Malta is very touchy about seawater usage and tends to hold up applications for any new CW intakes,” Halpin said. 

Halpin also proposed to rent or acquire the Delimara power station car park. “Being inside Delimara Power Station grounds makes the permitting and construction activities more difficult, and we would need Enemalta buy-in. As such they would need to either be party to the whole thing, or compensated somehow so they work with us (especially if we want this up and running quickly).” 

According to Halpin, a 1,100 square metre room would draw in as much as 6 MegaWatts in power, for 2,500 servers. “We know we have some spare output from D4 [the gas plant] which we could use if it was a small-scale implementation (1 or 2 MWs).” 

A dedicated engine would certainly need gas, Halpin said. “It would appear we have ample capacity on the gas side. However I need to check how much of that is contractually is Enemalta’s, how much is due to the efficiency of D4 (i.e. EGM’s spare capacity) and how much is over-design.”

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