Hut 8, a well-known Bitcoin mining firm, has secured a deal to acquire 205 megawatts of power in West Texas, as well as the land needed to set up its data center. This move takes the miner’s energy capacity up to 1,300 megawatts. Hut 8’s power purchase agreement (PPA) with Texas will place it next to a wind farm. This deal will also have Hut 8 channel into a reliable power source, as the location is connected to the Electric Reliability Council of Texas (ERCOT), supplying 90% of Texas’ power needs. “This is the first time a large data center load has been approved under the complex regulatory framework in this particular market,” Hut 8 CEO Asher Genoot said in a press release. “It is a testament to the expertise, diligence, and creativity of our corporate development organization, who
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Hut 8, a well-known Bitcoin mining firm, has secured a deal to acquire 205 megawatts of power in West Texas, as well as the land needed to set up its data center. This move takes the miner’s energy capacity up to 1,300 megawatts.
Hut 8’s power purchase agreement (PPA) with Texas will place it next to a wind farm. This deal will also have Hut 8 channel into a reliable power source, as the location is connected to the Electric Reliability Council of Texas (ERCOT), supplying 90% of Texas’ power needs.
“This is the first time a large data center load has been approved under the complex regulatory framework in this particular market,” Hut 8 CEO Asher Genoot said in a press release.
“It is a testament to the expertise, diligence, and creativity of our corporate development organization, who negotiated a bespoke structure to address the nuanced commercial, legal, and regulatory challenges of each stakeholder in the project,” Genoot added regarding Hut 8’s efforts in securing this deal and what it means to their expanding operations.
Bitcoin miners are actively increasing their capacities by striking deals with governments to acquire power at scale at attractive prices. Hut 8’s partnership with Texas allowed it to “access to some of the lowest locational wholesale power pricing in North America.”
Several miners are also turning to mergers and acquisitions (M&A), swallowing up numerous data centers to increase their hashrates in the hopes of mining more Bitcoin blocks. Block rewards have been reduced by half since the Bitcoin halving, and miners’ revenues have dropped significantly. Mining more blocks at reduced costs by striking wholesale power deals helps them increase revenues.
Many miners are also signing deals with AI companies to supply power for their massive computational needs. That helps them diversify their operations and add revenues by reducing block rewards. Hut 8’s deal will help it supply power at higher profits to AI companies as it navigates operations after this year’s halving.
“The site is well-positioned to support a variety of high-density compute applications, including Bitcoin mining and AI,” the press release read.